We propose the concept of doing fewer proposals!
We believe that proposals are an enormous waste of time since, historically, few have made a purchase solely based on a proposal.
Unintentionally, we have conditioned prospects to expect that they can simply request a proposal, and that we will provide all the information they need to solve their problems. Proposals are typically lengthy documents filled with features, benefits, rhetoric, justifications, marketing data, and, of course, your lowest price. In most cases, these documents contain enough information for the prospect to address their issues without your assistance. We refer to them as "unpaid consulting" because they don't result in compensation for your efforts.
In today's economy, we receive an average of five proposal requests per week, most of which are essentially opportunities to provide free consulting. Perhaps these requestors are relying on the "law of large numbers" for success, assuming that if they send out enough requests, someone will be willing to supply the information they need. In many instances, these requestors have no intention of meeting with us or doing business with us; they simply want our recommendation to compare with other providers they are genuinely considering.
One individual even boldly asked for our best training price for their organization of ten salespeople, and in response, we sent a piece of paper with the number $10.2 million written on it—significantly more than our actual training fees. He called us, offended, and when questioned, explained that our price was far too high. We clarified that he likely would have found any number excessive, so we saved ourselves the effort of preparing a detailed proposal. After this exchange, he pondered for a moment and asked if we could teach his team that particular "move," as they were spending substantial time and resources sending out proposals that only closed at an 18 percent rate. During a subsequent meeting, he expressed his frustration with the significant time his estimators wasted on proposals that only closed at an 18 percent rate.
For both salespeople and business owners, it would be beneficial to analyze how much of your company's resources are consumed by proposals that ultimately don't lead to closures. Consider what would happen if prospects interested in doing business with you couldn't access a proposal. How would this change your sales approach?
Nevertheless, if you opt not to follow our recommendation to eliminate proposals altogether, here are some protective measures you can adopt when dealing with those seeking to extract your information:
Focus on building stronger relationships to reduce reliance on proposals, as weak relationships often necessitate lowball pricing to secure a deal.
Avoid submitting proposals when there are more than two other competitors doing the same. Your chances diminish as more proposals are reviewed. Traditionally, the average number of proposals per project was three, but now it often ranges from five to 12.
Secure a commitment for a decision—yes, no, or a clear timeline—before delivering the proposal. Your leverage is highest before the prospect reviews your information, and there's nothing worse than a "think it over" response at the end, which is essentially a concealed NO from a prospect lacking the courage to express it directly or one who wants to explore other options.
Hold a weekly "close the sale or close the file" meeting to determine the next steps for each proposal. Decide whether it should be moved toward a sale or marked as a lost opportunity.
Adopt the mindset that "knowledge is power" and assign a monetary value to your expertise and industry insights. It has taken years to accumulate the knowledge residing in your mind, so make prospects earn it rather than freely surrendering it because they express interest.
