One Question Guaranteed to Boost Your Sales Performance
A Strategy & Storytelling subscriber emailed me this question...
We’re doing a good job of filling our sales pipeline with new prospects and setting up appointments. But when it comes to our sales proposals, that’s where our pipeline breaks down. What can we do to make our proposals more effective?
As I thought about how I would respond, an idea came to mind that I think could add a lot of value to many of you in my audience.
We could talk about how to improve specific elements in the sales proposal to make it more clear and persuasive. And I’ll be dedicating some future posts on how to craft a winning sales proposal.
But what I’ve discovered over the years in my own business and consulting with other entrepreneurs is this: So much of a proposal’s success hinges not on the sales proposal itself but on the questions you ask before you agree to write the proposal in the first place.
That's because you could craft the clearest and most compelling proposal, but if the prospect is not ready or does not have the authority to move forward, you're setting yourself up for failure before you even start. And, depending on how long it takes you to gather all the information you need to put together the proposal, that could be a considerable waste a lot of time (and money).
As a general rule of thumb, the more qualified the prospect, the more likely they will say “Yes” to your proposal.
But how do you determine whether the prospect is really qualified at the time they request a proposal? How do you assess whether you should invest the time into putting together a full-blown proposal?
There are several questions you should be asking when meeting with the prospect to assess whether your company is a good fit to help them. But here is one question I’ve found to be the most important to ask before agreeing to craft a proposal:
Let’s say, after reviewing our proposal, that the project scope (or product spec) and numbers look good to you. When would you be looking to move forward on this?
You’ll likely get one of three responses:
1. We need to make a decision quickly—say, in the next few days (or weeks).
2. [Your product/ service] is something we know that we need, but it may be a couple of months out. Right now, we're looking for pricing for our budget.
3. We’re still in the exploratory phase. We’re not sure if we’re going to do this, but we wanted to get an idea of how much it would cost if we did.
With response #1, you have the clearest path to success. You're working with someone who has an immediate need. And you can expect to receive feedback on your proposal—yes or no—within a relatively short period.
In this case, I would go ahead and invest the time to put together a detailed proposal.
But with responses #2 and #3, I recommend taking a different tack.
Instead of crafting a full-blown proposal, offer to provide a budget range.
For example: After you have gathered a rough scope or product spec, you would get back to the prospect with something like, “The budget for a project like this would be $5,000 to $7,000, depending on materials costs, scope, etc. at the time you’re ready to move forward.”
Why a budget vs. proposal?
Many cost factors could change by the time the customer is ready to make a decision, which would make the pricing obsolete. And sure, if the customer agrees to move forward on your original proposal, you can always go back to them and say that you need to raise the price, but good luck with that. Even if you're covered by the "price is effective until" statement on the quote, you've psychologically anchored them to the original (most likely lower) number.
The budget range gives you the flexibility to price your project/ product accurately and profitably at the time the customer is ready to move forward—without you having to “sell” them on a higher price later.
When you provide a budget range, you keep the customer curious to want to know what the actual number will be when they’re ready to buy. But if you send the full proposal too soon, they assume they have what they need. There’s no need to get back to you unless they decide to engage you.
Since creating a budget range takes a fraction of the time it would for you to put together a full proposal, you’re able to free up bandwidth to focus on prospects who offer the clearest path to success.
How do you propose the idea of a budget range?
You could say something along these lines:
Thank you so much for requesting a price quote. Since it will be a while before you’re ready, why don’t we do this to help you with your budgeting and planning process: We’ll put together a budget range for you.
The challenge with a firm proposal at this point is that a lot can change by the time you’re ready to move forward. But the budget range will give you an idea of about what to expect—so you can plan on what you should budget. And then, when it gets to be closer to time, say, about 30 days out, let us know, and we’ll put together a detailed proposal with firm numbers to help you make a sound business decision. Does that work for you?
But what if that prospect says, “No. I want your best pricing now?”
You would need to decide how you’d like to respond.
My advice: Hold firm. If you agree to putting together a detailed proposal knowing that the prospect is a long way out, just know that you’re likely wasting your time and constraining your ability to serve customers who need your products or services now.
The Bottom Line
When you focus your time on the prospects that give you the highest probability of success, you cannot help but convert more of those proposals into sales.
So, before agreeing to put together the proposal, find out upfront: Is the need now or later?
If later, hold off on the detailed proposal and offer a more flexible budget range instead.
Sean M. Lyden is CEO of Lyden Communications LLC, a Strategy and Storytelling consultancy that helps entrepreneurs tap into the power of story to grow their business.
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