How to Convert Leads to Proposals and POs: A Step-by-Step Guide for Software Solution Providers – Worklog360

Having a solid process for converting leads into POs is of tremendous importance for any company, including IT/Software service providers. Being skilled at converting leads and prospects into paying clients ensures you’re able to keep your teams busy and your operation profitable. In this step-by-step guide, we are going to share our know-how and give you ideas on how to improve your  prospect-to-PO conversion rates.

As you can imagine, convincing your leads that you’re the one they want to do business with isn’t a straight-forward one-time event but rather a multi-step process that involves having a clear offering, projecting a high level of emotional intelligence and employing a lot of active listening during your conversations with potential clients. Let’s break it down into steps and explore them in more depth below.

Step 1: Know your Value Proposition

Although this may seem a bit out-of-scope for the topic we’re discussing today, let’s take the opportunity to go back to basics for a moment, as the first step to winning a client is having a clear value proposition. What are you offering to your clients? And equally important, what are you not offering? 

As an IT service organisation, you could be providing people to join your client’s team as dedicated agents, or shared agents. Alternatively, you could be offering competence-based value propositions where you are skilled in a niche service and take on specialized projects such as software modernizations, custom software implementations, DevOps services, development services in specific domains like – AI, ERPs, CRMs,  Ecommerce and more.

If you are not entirely clear on what your business model looks like, take a look at our article titled What Business Model to Choose for Your IT Outsourcing Company + Pros and Cons of Each. 

Once you have a clear value proposition, move on to the next step.

Step 2: Find Leads

Knowing what your target customers look like and what you’re offering them, it is time to generate prospects. This is where your marketing department comes in. You need to find the approach that works for you, some ideas include:

1. Digital marketing: social media campaigns, email marketing, paid search ads and more. 
2. Content marketing: investing in the creation of content that adds value to your prospects and educates them on making a good buying decision.
3. Attending industry-specific conferences and networking events.
4. Organise webinars or even full-blown online conferences on topics that address the issue your potential clients have and provide value to them – don’t just use them as a sales pitch, focus on your customers and what matters to them.
5. Checking companies that match your target profile for open vacancies and directly connecting with them about those vacancies, saying you can provide an alternative solution to their problem.
6. Traditional cold calling and cold email outreach.

Through your marketing efforts, it’s always beneficial to try and capture potential prospects’ contact details such as name and email address. This will allow you to contact them and nurture them, even if they’re not ready to do business with you yet. Try to provide value to them with every interaction you have. Move away from talking about yourself and your company, avoid using “we” in your communication. Rather, talk about the problem they’re having, the solutions they can choose from and how to make the best decision for their business. Don’t turn every marketing message into a sales pitch, rather see through the eyes of your customer and help them help their business. 

If this sounds counterintuitive, remember the reciprocity principle in psychology – people are more likely to do business with you if they believe you have provided them with something of value. They would feel psychologically inclined to “return” the favour. 

Once you have your first cold leads, you’d want to warm them up and get to that first meeting. See the next step for tips on how to handle that first interaction.

Step 3: The First Meeting

If you’ve done your job well and have provided your leads with quality content, nurtured them enough to get them to agree to have a meeting with you, it is time to make the most out of this first, hopefully live, interaction. Whether it’s a demo or a consultation they signed up on or just an informal conversation, it’s important to once again take the back seat and before embarking on telling them all about your wonderful services, take the time to really listen to what they have to say.

Here is where that emotional intelligence comes in. You want to show real empathy to your clients when listening about their problems. Focus on them and try to really drill into the root cause of their discomfort. Make sure you learn the full story by asking questions such as:

• Tell me about your background?
• Tell me more about your company?
• What is your responsibility?
• What are your goals?
• What problems do you see?
• What are the main risks?

Once they are speaking, actively listen instead of planning what you will say next and how you will wow them. Make sure they feel heard, seen and understood. Ask follow-up questions to anything that is unclear. A good tip for encouraging people to elaborate on a thought is to repeat the last three words they said, then pause. Try it in the next conversation you have, formal or informal. It makes people feel heard and they naturally tend to give more information about whatever it is they were talking about. For instance, your prospect admits:  “We struggle to retain good people”. You repeat “retain good people?”. They will go on to explain exactly what they mean.

Your goal at the end of this first meeting is to manage to get a first face-to-face meeting with the problem owner and decision makers within your client organisation. See the next step for what to do then.

Step 4: Meeting the Problem Owner / Decision Maker

Congratulations! You’ve made it to a meeting with the actual problem owner or decision maker within your potential client’s organisation. This is a great step forward in the conversion process and is the most important meeting you want to prepare for. 

The tips we discussed previously still apply, as you want to utilise emotional intelligence at every interaction. An additional focus for you at this meeting is to really demonstrate your experience and competence. You want to show beyond a shadow of a doubt that you know what you are talking about and that you are to be trusted. Business-to-business relationships are based on trust and expertise.  

To help you achieve that, you want to ask the right questions and be interactive. For example:

• Confirm their problem again – “So your problem is … [summarise your understanding of their problem], is that correct?”
• What are the implications?
• What does this mean for your company?
• What are the financial consequences?
• What other benefits are there if the problem is solved?

Make sure you ask open-ended questions and that you keep asking follow-ups until the problem is clear. Repeat the problem as a question and so on. When the problem statement is clarified and confirmed, you can even ask:

• What would be the ideal solution? How can we help you?

Step 5: Showcase Your Expertise 

When the problem is clear, it is the time for you to present your solution and approach. This can be done during the same meeting or at a next one. You should be prepared to use a reference case from when you helped resolve a similar problem for a customer to back up your words and capabilities. This showcases and solidifies your expertise. Make sure you hit all of the below points:

• What was the situation of your reference client?
• What was their problem?
• What actions did you take?
• What result did you deliver to your client?

After presenting the case study to your prospect and having explained as clearly as possible the solution you can offer for their problem, give the floor back to them asking for their feedback. Ask questions such as:

• What did you think of this case?
• What is missing for you?

As before, you want to make sure the conversation always revolves around them and their issue. Even when talking about your own accomplishments and results, the focus is still on them and what information will be relevant and useful to their case. With that in mind, let’s move to the next crucial step:

Step 6: The Conversion

You provided value to the interaction with your lead, starting at your marketing messaging at at each subsequent conversation. You have actively listened to your prospect from day one. You have repeatedly clarified and confirmed their problem and know their needs intimately. You asked interactive questions throughout, drilled down to the root cause of their issues and made them feel heard. You made it to a meeting with the problem owner and decision maker where you showcased your expertise brilliantly, in a way that leaves little doubt you are a trustworthy expert in what you do. To nail it down, you presented a clear offering and solution that speaks directly to their needs and backed it with a reference case of a happy former customer. Congratulations, you have really maximised this opportunity!

If your client is happy with what they’ve heard, they will now ask you to create a proposal. When they do, do not forget to ask him about their budget and be transparent that it is important for you to know how big and complex the solution you provide to be. 

In conclusion 

We hope that applying these six steps to a proposal help you in winning more clients. There is a slight shift in mindset in there that really helps you make the most of each conversation you have with a lead. It is important to remember that while getting to a proposal and subsequent PO is fantastic, the real work starts after. Executing on the project and making sure your customer is satisfied is where you prove you’re worth your salt. 
Once you start project execution, you will need the right tools to manage your teams and projects and be transparent with your clients on progress, billing and invoicing. Many software providers use tools such as Jira for this purpose. If you find yourself in need of a reliable time tracking and timesheets solution that enables you to have clear visibility over how team members spend their time, track billable and non-billable hours and much more, check out Worklog360 on Atlassian Marketplace. It was developed with companies like you in mind.