Before making the proposal, you’d better make the sale
“Sounds good. Send me a proposal.” How many times have you heard that? Too many.
So you run back to your office, put together a proposal, send it to the prospect and start the follow-up process (and the prayer vigil).
Or do you?
Reality: Make the sale before the proposal is written. Your proposal should be the essence of what has been decided by you and your prospect. It should solidify the sale.
How many proposals do you win? How many do you lose? If you lose way more proposals than you win, it’s much more than just the proposal. It’s the proposal process.
Count the wins. Count the losses. That’s the scorecard, baby. Your scorecard. Ouch.
And when you win proposals, how profitable are they? Are you telling your boss, “Hey let’s go in real low on this one so we can get the business, and then six months from now, boy we can really lose some money.” Ouch.
Reality: Once you lower the price, customers expect a low price all the time.
Proposals are there because buyers think they’ll get the lowest price or the best deal by pitting one company against the other. Your job is to make yourself a winner before the proposal happens by creating conditions or terms that preclude others from either bidding or winning.
The first thing you need to do is determine if it’s a price proposal or a value proposal. If they’re going to take the lowest price only, you’re going to lose, even if you win. Because the lowest price is the lowest profit. It may even be no profit.
So the challenge is, can you create a profitability formula or a productivity formula, measured against what you do, that sets a standard for the proposal. A formula that your competition must meet or exceed regardless of initial price.
You need to convince your buyer that there’s a long-term cost, not simply a short-term price.
Are they buying your price only — taking the lowest bid? If so, they only need a one-sentence proposal, and you don’t need me.
Try this: Don’t do it ... at first. When someone asks me for a proposal, the first thing I say to them is no. That always shocks people. And besides, proposals are a pain in the butt.
I ask the person, “Were you taking notes?” The person replies, “Yes.” I say, “Well, let me just sign the notes.” I continue by saying all we really need to do is pick a date to begin. And 30 percent of the time, the prospect will say, “You’re right.”
The other 70 percent of the time, the prospect will insist on a proposal. But I’ve just won 30 percent of the business without submitting a paper.
The reason proposals are there is to lower risk to the buyer and, potentially, to lower the cost. But in the final analysis, many proposals can be eliminated if your prospect feels that your price is fair and their risk is low.
If the risk is low and the reward is high, then the answer is always obvious.
Before the decision is made, it’s important that your customer knows what your product or service will be like after it’s been delivered. This will take away all risks and all fear. And it may also take away the price-only decision process.
The key words are: value messages on video testimonials.
Customers only spend an hour or two buying, but they may spend years using. So you say to your customer, “Mr. Jones, I’d like to add a clause to the proposal that insists on proof of salespeople’s claims. And so I am asking you to require five testimonials in video form so that you’ll know any claim a salesperson makes has been validated by a customer, and it’s not just a sales pitch or a proposal.”
The video testimonial is a powerful piece of support. And depending upon the quality, it can be the difference between sale and no sale.
2.5 thoughts on testimonials:
1. Testimonials reduce the risk of purchase.
2. Testimonials are the only proof you’ve got.
2.5 Testimonials must be included in every proposal.
Winning proposals are solidified by dynamic sales presentations. Proposals should be the solidifying factor, not the sales pitch. The proposal should document what has been said and agreed. The proposal should confirm the sale and all the claims you made about it. Does yours?
Your proposal process is not a regurgitation of your price list. It is not a document to see how much of your profit you can give away. It is not something you prepare to beat the competition.
Your proposal is the gateway to earned business. It solidifies a value-driven sales presentation that begins or extends a relationship where everyone profits. The minute you lowball a price, you’ve gone from a relationship sale to transactional sale, and the next person who lowballs your price will beat you. And beat themselves.
Don’t just win the proposal.
Win the value. Win the profit. And win the relationship.
Editor’s note: Jeffery Gitomer is on sabbatical. This column originally appeared in the August 8, 2016, Business Journal.
Jeffrey Gitomer is the author of 13 books. His real-world ideas are also available as online courses at gitomerlearningacademy.com. For information about training and seminars, visit gitomer.com or email Jeffrey at email@example.com.