Enterprise consulting pitch - what would you do?

[sbornia]

Let's say you sell enterprise consulting services, and you're talking with a current customer about a new project. The customer is able to sole-source for small projects, but otherwise needs to go to RFP. Imagine you're looking at these two scenarios:

Option 1) Pitch a seven-figure, 18-month project that will either go nowhere or go to RFP. If the latter, it's not clear if you'll win the RFP process. You'd probably make a very compelling bid due to your intimate knowledge of the issues, but you never know. Your gut feeling there is that the biggest risk is the customer choosing to do nothing due to sticker shock, inertia, or a lack of understanding how to write the RFP.

Option 2) Pitch a six figure, 3-month proof of concept project that will very likely be approved. Once you complete the POC successfully, the customer might want the whole enchilada, which would mean bidding on the remaining seven-figure work via RFP (assume you would not be prohibited from doing so). As above, it's not clear if you'd win the RFP process. While your RFP response would likely be even more compelling due to the POC experience, the customer would also be far more knowledgeable and empowered to move forward without you based on their knowledge gained during the POC.

Now, I've built a decision tree in Excel that leads me to conclude one of these options has a higher dollar value, but I do not have a lot of first-hand experience with this kind of scenario to know if my probability assumptions are valid. I think my model's pretty good, but it's admittedly based on speculation.

Maybe some of you have more first-hand experience?

[TMB]

I am almost always willing to take a front end haircut if it avoids the beauty contest.

[Noteddy]

You would be far better served doing the POC at my place of business. Possible outcomes would be:

1) You win the bid for the RFP work and are more likely to make $ because you (and the client) understand each other better.
2) You elect not to bid on the RFP work because you know what a mess you would be avoiding.
3) You bid on the RFP work allowing for the difficulty of working with a difficult client and lose it. - Bullet dodged.

[sbornia]

Thanks guys, that's in line with my thinking as well. Better to embed ourselves in there for a few months.

[theflashunc]

Short-term. RFP at least for me is agony. It must be a deleted chapter in Dante's Inferno.

I'd rather do a small project with an outside team that then greases the skids with supply chain and the higher ups for bigger work.

[swt]

If you will make money on #2 do it. If you won't make money on #2 start over.

[BShow]

You would be far better served doing the POC at my place of business. Possible outcomes would be:

1) You win the bid for the RFP work and are more likely to make $ because you (and the client) understand each other better.
2) You elect not to bid on the RFP work because you know what a mess you would be avoiding.
3) You bid on the RFP work allowing for the difficulty of working with a difficult client and lose it. - Bullet dodged.

If you will make money on #2 do it. If you won't make money on #2 start over.

I agree with these guys.