Writing a proposal for a business is often a “one and done” deal. But there are times when recipients require a little more convincing that what you’re offering is the best option for them. Even though it may require a little more work, having multiple alternative proposal options up your sleeve is a great way to land the bid, no matter what.
We at iQuoteXpress like to call this concept “the magic number three.” It’s a useful strategy to use when mapping out your internal strategy. You’ll draft three different scenarios for your team to review and choose the best one to deliver to the customer.
Here’s a guide to the three ace proposals you should draft in preparation for client delivery.
This is the proposal you’re hoping your client will select. It includes the best price options with the most agreeable conditions for you and the customer. For example, the proposal will include a variety of services you offer at a higher price point, so you can see more profit from the deal.
The optimistic proposal won’t always be the best choice, however. Occasionally, you’ll find the conditions that go with the price point don’t meet the customer’s needs. Some customers may also need a more affordable package that fits in with their budget. In that case, you might want to lead with a more realistic proposal.
Even though this proposal doesn’t include your ideal numbers, it’s still a great option. The content of this document will take a more holistic approach, looking at compromise rather than the best-case scenario.
Typically, this proposal will surface when your client isn’t interested in spending as much money. The customer will be more interested in sacrificing a few key features for a better price on the package. Though the price point is a little lower, it’s worthwhile to remember that this is still a great option because it can help you retain an existing customer … or attract a new one.
For some clients, even the realistic proposal won’t make them stay. That’s when it’s time to move to the third option, which is reserved for when you’re getting just a little desperate for clients. It includes low price points and more services than you would offer on a typical proposal. Sometimes you have to get the bid to protect yourself from the competitors, even if it means bending over backward to please the client.
When your competition for a client bid is tough, this is often the best option. You typically won’t use the pessimistic approach when dealing with an existing client, because they’re more likely to be agreeable to your usual pricing.
Instead, you’ll reserve this approach for when you need to get a new, promising client. After you’ve lured them in with a very attractive, low-priced proposal, you can begin to raise your prices slowly on the next proposals and pose less of a problem.
Using CPQ Software to Draft “The Magic Three”
As you can see, each package details different costs and products to try to best match the clients’ needs and price points.
Using a three-scenario construction of proposals is a common practice among many businesses in order to help them envision both extremes and average gross margins that a company might be subject to in a specific project.
Offering Alternative Proposals to the Customer
In some situations, you might choose to have three completely drafted proposals on hand in case the first one doesn’t work. This is reserved for scenarios in which you desperately need the bid. With three alternatives on hand, you still have a chance of beating the competition and keeping your client if he or she doesn’t bite on your first proposal.
With regard to this option, it’s best to use it sparingly. When you’re faced with a customer who truly doesn’t know what to buy, or they’ve asked for multiple proposals so they can select the best ones themselves, this method can be very effective in giving the customer exactly what they want.
In other situations, though, offering an alternate proposal can cause your company to come across as arrogant and make the customer less inclined to choose any proposal you might offer. It can also dilute your own resources, and lead customers to expect a lower price point every time you offer a proposal because they rejected the first one.
It can also lead to overall confusion for the customer, since you appeared to waffle a little on the ideal proposal. They might sense mixed signals about what services and prices you’re really offering, which could turn into a giant mess someone will have to mop up.
All in all, it’s best to use your best judgment when delivering an alternative proposal to the client, and keep both the company’s and client’s best interest in mind.
Use iQuoteXpress for Your Proposals Today!
If you’re seeking to have your optimistic proposal accepted by the client, you need good CPQ software to run your numbers. Accuracy and efficiency are essential to a good proposal writing process, and you don’t want to settle for less than the best.
Contact iQuoteXpress now for more information. We’d be happy to sign you up for our free, no-obligation online demo of our CPQ software today!