11/08/2016 - 14:07

A proposal and sale are miles apart

11/08/2016 - 14:07


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When it comes to sales proposals, the first thing you need to do is determine if it’s a price proposal or a value proposal.

A proposal and sale are miles apart
THAT’S A WRAP: Video presentations provide a validation of your claims.

When it comes to sales proposals, the first thing you need to do is determine if it’s a price proposal or a value proposal.

How many times has a prospective client said ‘Sounds good, send me a proposal’.

So what do you do? Most times you’ll run back to your office, put together a proposal, send it to the prospect, and start the follow-up process.

Or do you?

Reality: The sale should be solidified 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 did you lose? If you lose way more proposals than you win, it’s much more than just the proposal. It’s the proposal process.

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’?

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 whether you can 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 are buying your price only – taking the lowest bid?

When someone asks me for a proposal, the first thing I say to them is ‘no’. That always shocks people.

I ask the person if they were taking notes. If they say ‘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 per cent of the time the prospect will agree with me.

The other 70 per cent of the time the prospect will insist on a proposal. But I’ve just won 30 per cent 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 that 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 your customer knows what your product or service will be like after it has 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.

Make sure you offer (up to) five video testimonials that show what you’re presenting is not just a sales pitch or a proposal, but validation of your claims.

The video testimonial is a powerful piece of support, and depending on the quality can be the difference between sale and no sale.

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.

Jeffrey Gitomer is an American author, professional speaker and business trainer, who writes and lectures internationally on sales, customer loyalty and personal development. © 2016 All rights reserved. Don’t reproduce this document without written permission from Jeffrey H. Gitomer and Buy Gitomer.



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