The other day, we conducted a webinar about best practices for submitting B2B Proposals. It’s part of a series of webinars celebrating this, our 35th year in the Sales Training Business. We had more questions than we could answer in the time we had so we decided to respond here on the blog. For the past couple of days, we’ve been posting the questions and our responses.
During the webinar, we suggested holding your price separate from your proposal and presenting it only after you’d shared your recommendations with your prospect. Here’s a question about that strategy:
Q: Can not providing the price early in the proposal presentation/discussion become a distraction? How do you handle a customer who argues that the price provides context for the solution?
Yes, it can. However, by the time you’re presenting your proposal, you should have a good idea of your prospect’s budget and should, ideally, be within that budget.
However, since that’s not always possible, it’s better to avoid the price discussion until you’ve built sufficient value in the minds of your prospects. By itself, price is just a number (and, quite frankly, is a bigger deal in a seller’s mind than it is in a qualified prospect’s mind).
By simply saying something like, “I understand that price is important, but first I’d like to make sure that you understand everything the price includes. In order to do that, let me ensure that our proposal is on target. Then, I’ll give you the price to the penny. Does that make sense?”
A simple statement like that will typically put the pricing discussion off until you’re ready to reveal it.
And revealing it is also important:
- Say your price with confidence. Be as comfortable with the price as you are saying the time of day.
- Don’t modify the price. Saying things like, “Our regular price…” or “Our normal price…” is a mistake because it invites negotiation. Don’t set yourself up for failure. Simply say, “The price is $X.”
Price is only one component of your proposal. Again, it’s probably less of a concern for your prospect as it is for you. Especially if you’re as far along in the sales process as making a formal proposal.
What do you think about the strategy of pushing price presentation to the end of a proposal?
You’ve pointed out a common sales bad practice–diving into price before developing a complete understanding of a prospect’s business problem. Some of this is brought on by prospects themselves. They ask for pricing early when first talking with a salesperson, and the salesperson willingly obliges. That’s often a mistake, but not always.
Some salespeople use price as a discussion carrot: “I’ll talk about price once I’ve spent time with you, and (hopefully) convinced you that what we charge will be worth paying.” But this approach annoys customers who don’t want to spend time sharing information and learning about a solution that’s clearly more than they can afford. I recommend to salespeople to use a price range for qualification. For example, if their average solution sells for not less than $100,000 and could be sold for up to $500,000, mention that up front. It will save everyone time.
As far as having a good idea of a prospect’s budget, I find that budgets are sometimes flexible, so even when they’re known, a salesperson is much better off discovering the magnitude of the business problem or challenge, then determining whether the recommended solution will be congruent with the problem solved. This is preferable to just fitting a solution to a sometimes-arbitrary budget.
You have successfully wasted (how many?) hours presenting to a company that can’t afford the product. Congratulations!
Better option – Tell the entire world how much you charge, and make a sale to everyone who gets a presentation.