Words from Gitomer

What does Gitomer tell us about proposals? Two different posts:

Too many salespeople HAVE WASTED too much time on too many proposals that never amounted to a sale -- and Jeffrey's sick of it.

• 74% or more of all proposals are LOST
• 24% never needed to be created (you could have won without one)

SALES MOVES: The proposal and the sale are miles apart By Jeffrey Gitomer
“Sounds good, send me a pro­posal.”

How many times have you heard that? How many times have you run back to your office, put together a proposal, sent it to the prospect and started the follow-up process (and the prayer vigil)?

Guess what? 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 and be the window on how business is conducted by your company. Is it?

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 to 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—and it may even be no profit.

So the challenge is to 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? Are they 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 is “No.” It always shocks them.

I ask the potential customer if he or she was taking notes. The answer is usually “Yes.” Then I say, “Well, let me just sign the notes. All we really need to do is pick a date to begin.” And 30% of the time the prospect will say, “You’re right.”

The other 70% of the time the prospect will insist on a proposal. But I’ve just won 30% of the business without submitting a paper.

Another reason proposals exist is to lower risk to the buyer and potentially the cost. But many proposals can be eliminated if your prospect feels that your price is fair and the risk is low. If the risk is low and the reward is high, the answer is always obvious.

Before the decision is made, it’s important to your customer to know 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.

Customers only buy for an hour or two, but they may use for years. So you say to your customer, “Ms. Jones, I’d like to add a clause to the proposal that insists on proof of salespeople’s claims. And so I’m 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, not just a sales pitch.”

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

Three thoughts on testimonials:

1. Testimonials reduce the risk of purchase.

2. Testimonials are the only proof you’ve got.

3. Testimonials MUST be included in every proposal.

Effective proposals are a result of effective 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 in order to beat the competition.

A proposal is the gateway to a value driven sale that begins or extends a relationship where everyone profits. The minute you lowball a price you’ve gone from a relationship to transaction and the next person who lowballs will beat you.

Don’t just win the proposal. Win the value. Win the profit. And win the relationship.
Jeffrey Gitomer, author of The Sales Bible and Customer Satisfaction is Worthless, Customer Loyalty is Priceless, can be reached by e-mail at salesman@gitomer.com.

http://www.charlestonbusiness.com/pub/6_26/news/3093-1.html