5 Psychological Pricing Mistakes When Quoting a Prospect.

Whether you’re a young startup or mature business, pricing is still one of the most difficult components of the proposal writing process. You don’t want to set your price too low and miss out on profits, but you also want to avoid overpricing your services and missing out on the contract altogether. And while hitting the sweet spot is challenging, it’s not impossible.

The Psychology of Pricing

For most business owners and CEOs, pricing is something that gets a lot of attention. You’re always thinking about cost, revenue, and margins. However, it’s imperative that you look beyond these surface-level measurements. Pricing is as much about buyer psychology as it is about spreadsheets and budgets.

“Pricing is a concept that transcends profit margins,” marketers Neil Patel and Ritka Puri explain in their guide to understanding consumer psychology. “It’s also a marketing tactic that can help your business boost sales volume. When you think about pricing, you need to focus on more than what will cover your company’s operating expenses and pay the bills. You need to choose numbers that will compel your audiences to buy.”

While Patel and Puri are specifically speaking to B2C businesses that directly target the end consumer – and how marketing and pricing work together to attract customers – the truths in the previous statement can be applied to proposal writing in B2B situations. You have to consistently produce quotes that compel audiences to say yes.

There are many different facets of pricing psychology, but if we’re going to hone in on just one, it would have to be the importance of value over cost. “Instead of showing prospects what they should expect to spend, show them what they are going [to] earn,” Patel and Puri suggest.

While the cost does matter, you have to dig deeper than dollar signs and decimal points. Why do businesses spend money on your services? Well, because they expect to receive some sort of value in return. If you can convince a prospect that the value you’re providing them is a worthy return on investment, then you can charge a higher price and produce better response rates.

5 Mistakes You Must Avoid

In order to consistently develop quotes that are enticing to targets and profitable for your business, you must avoid making debilitating mistakes that will set you back. In particular, you’ll want to avoid the following:

1. Trying to be the Lowest Price

There’s a common misconception in the business world that the lowest price equals the highest volume. While this relationship does exist in certain industries, it’s more of a cliché than a rule. This principle only holds true in industries where products and services are undifferentiated. Assuming that your business offers things that the competition doesn’t, and vice versa, then an attempt to be the lowest price on the block does you no good.

In order to provide the lowest price and benefit from it, you need access to massive amounts of resources. This is why Walmart is successful at being a low-price leader, while the convenience store on the corner of your street would go out of business if it tried to offer the lowest prices on everything.

Most businesses would prefer to have a handful of high-paying contracts than a multitude of low-paying contracts. And if you want to make this happen, you have to focus on value over price.

2. Mixing Pricing Messaging

Many businesses struggle with consistent client onboarding because they don’t have consistent pricing messaging. In other words, they’ll try to provide the lowest quote on one project, the highest quote on the next, and a middle-of-the-road figure on the one after that.

You need to identify an appropriate price point and own that number. You’ll quickly learn how people respond to your price point and can then adjust your value proposition accordingly. Clients want to see consistency – so avoid the temptation to try everything.

3. Underestimating Project Cost

It’s easy to get so caught up in market prices that you don’t take the time to carefully consider the real project costs. In other words, what’s it going to cost you to complete the project? This should be one of the first things you figure out. This gives you a bottom line figure and prevents you from undercutting yourself.

Also, don’t be conservative with these estimates. How many times does a project end up costing you the exact amount you budgeted? Very rarely. In most cases, something unpredictable pops up and increases the cost. Err on the side of caution and your pricing strategy will be much sounder.

4. Focusing on Comparative Pricing

Be very careful with comparative pricing. As soon as you position your pricing up against a competitor, the client you’re pitching takes on a totally different mindset. Typically, it’s a much more conservative mindset.

According to research published by the Stanford Graduate School of Business, asking consumers to relate your pricing to another company’s pricing can easily backfire by making them perceive a heightened risk. In other words, they suddenly become fearful that they either aren’t getting (a) the best quality or (b) the lowest price.

5. Not Using a CPQ Tool

Tools exist for a reason. They produce added value, speed up a process, or establish more consistency. When it comes to quoting and proposal writing, CPQ tools do all of these things. If you aren’t currently leveraging the value of a CPQ tool, you’re missing out on an opportunity to automate many of the time-consuming steps you’re currently dealing with.

Start Using iQuoteXpress Today

If you aren’t currently using a configure price quote (CPQ) tool, then you’re clearly not maximizing your proposal writing. In fact, it’s entirely possible that you’re compromising your proposals by using the wrong price points.

At iQuoteXpress, we produce tools that allow businesses like yours to streamline the quotation process and consistently develop accurate, professional, and comprehensive proposals in the least amount of time possible. It’s this convenience that makes our CPQ tool one of the premier solutions in the industry. Contact us today and we’ll be happy to provide you with a free no-obligation online demo.

Presidential Campaign Strategies applied to Business.

This year’s Presidential campaign season has already been full of surprises and twists, and it’s bound to get even more intense as the months roll on. It’s very early, yet candidates are trying their hardest to prove that they’re the best, most experienced, most appropriate leaders for the nation – and, regardless of your political affiliations or personal investments in the outcome of the election, you have to be impressed with the tactics they use to promote themselves.

While the analogy isn’t obvious at first glance, this process of political positioning has a lot to teach us about the best way to structure and write a proposal in a professional environment. Think about your goals as a proposal writer: you’re competing against a group of peers, you have to convince the reviewer that you’re the most authoritative and valuable candidate, and you only get a finite amount of space to pack in all of your persuasive arguments.

Let’s dig into the specifics of how political tactics can help you shape better proposals:

Have a Slogan

Politics and marketing have a lot in common. Perhaps most importantly, you need to be able to communicate large amounts of meaning in a targeted, effective way. This is best demonstrated by the political slogan, a short snippet of text designed to “stick” in a voter’s mind and accurately, concisely sum up the entirety of a candidate’s political platform. For politicians, this might be a value statement or a snappy rebuttal to an opponent’s vision for the future of the country.

For you, this is an opening statement or summary page, where you’ll boil down your main points to only those that are most relevant. If you’re successful here, your arguments are going to “stick” in your readers’ minds, and long after they’ve given the proposals a once-over, yours is the one that’s going to come to mind first. It also serves as an effective summary page: since it’s rare that companies will review entire proposals multiple times over, your summary statements are the best tool that you have to earn bonus points during further reviews.

Create a Plan

There’s something to be said for the value of rational appeal, and there’s no greater rational appeal than a point-by-point plan. For politicians, this means turning a general statement like “improve education” into a series of realistic, actionable items (which is often easier said than done). This must be grounded and convincing, or else nobody will find the plan persuasive.

Proposal writing is no different, except that you have different general statements to flesh out, and you’ll be in complete control of how you eventually execute the steps to get there. For example, you might have a statement like, “We’ll help you to increase your marketing ROI,” but that doesn’t say much unless you have a well-researched, well-documented plan on how you’re going to pull that off. It’s important to back up your plans with research and insights; otherwise, your plan steps will seem as hollow or unimpressive as your general statements. Be specific here!

Ask for Help

It’s almost impossible to create and manage a political campaign on your own. Most modern political candidates have entire teams of people behind the scenes, posting on their behalf on social media, answering press inquiries, scheduling events, and getting them ready for significant turns. The politician may be a visionary for the campaign, but the grunt work is done by, well, grunts.

As a proposal writer, you may have access to your own team, but sometimes even that isn’t enough to get your proposal written in time (or in a proper format). That’s why tools like iQuoteXpress exist – too help you get your proposals written faster and easier without sacrificing the quality of your finished piece. Think of your proposal writing software as a campaign manager, helping you keep everything in order.

Prove That You’re More Than Just Empty Promises

One of the biggest problems politicians face in the modern era is earning voter trust. All of their plans may sound good, and their rhetoric may be persuasive, but what does that actually mean? It doesn’t matter that you have a four-year plan to improve healthcare coverage if, when you get into office, you immediately abandon that plan. Accordingly, politicians are forced to prove that they’re more than just empty promises.

You’ve guessed it already: you do too. Most proposal submitters will talk a big game, so to differentiate yourself, you have to prove that you can back up those words. Some of the most effective ways to do this are through case studies and former client testimonials; show that you’ve done it before! Otherwise, you can show off measurable metrics and your company history (including team member expertise) to close the deal.

Be Unique

To many voters, all candidates look alike. The frontrunners are the ones who’ve managed to stand out from the crowd. In this year’s election, Donald Trump and Bernie Sanders – candidates on both sides of the aisle – have emerged as major contenders because of their unconventional approaches (and, in the former’s case, debatable aptitude). This isn’t to say that standing out instantly makes you a better candidate, but it does get you more attention – and attention is always the first step. Put this to good use in your proposal writing endeavors by including a unique format or position. Break away from the norm!

If you can use these tactics effectively for your proposal, you’ll have a far better chance at standing out among the crowd. Remember, one of the most important elements to successful integration is subtlety: if a voter suspects a politician of being subversive or manipulative, the politician will lose his/her vote. Similarly, if you try too hard to manipulate your readers, your proposal will come off as sales-y and impersonal. Instead, strive to incorporate these means of persuasion without losing the human approachability of your voice. 

Rejected Again? How to Fix a Bad Business Proposal.

Business proposals are tricky to get right. As with any application or pitch, it takes some finesse to create a proposal that will interest the receiving party. Even if you follow all the requirements, a poorly written proposal is unlikely to be taken seriously – let alone accepted.

In theory, a quote should be enough. After all, if you’re trying to land a client, what matters more to them than how much the project costs? As it turns out, a lot matters. Read on to learn more about how you can correct some of the biggest blunders proposal writers commit.

The Problem: Bad Proposals (and What Happens to Them)

Think about your proposal as a product. With this frame of mind, it doesn’t matter what you sell – whether it’s lawn mowers or lab equipment – because the customer always knows what they’re paying for prior to making the purchase. This is especially true in the brick-and-mortar retail world, where customers have the chance to window-shop, compare prices, try on clothes, and taste product samples.

Unfortunately, when a client invests in a service, they don’t have the same opportunities for browsing and perusing. Instead, they have to choose what to buy based on their own research in addition to the (sometimes blind) faith that the business in question will provide it.

You could have a flawless record, excellent samples, a stellar web and social media presence, and tons of positive referrals and testimonials – but that’s not enough. Simply put, your proposal is what’s going to turn them from an interested party into a buyer.

Your proposal isn’t a formality; it’s a sales presentation. If what you send isn’t good enough, the client’s not going to read it – instead, it’s going out with the recycling.

So what should you do instead? Read on for some ways to turn a bad business proposal into something worth reading.

Mistake #1: Failing to Understand the Customer

In a case like this, failure doesn’t come from simple ignorance; it’s a product of failing to do your due diligence and key into the prospect’s precise needs. In writing a business proposal, the first thing you should ask yourself – and your team – is, “Who’s our client?” The second question is, “What does my client want to buy?”

What to do instead:

You already know your company (or, at least, you should). You know your staff, your products, and your business interests. But the purpose of sales is not to show your chops as a great salesperson or to convey the excellence of your product. While those are components of making a sale, it’s up to you to focus – above all else – on the client.

Mistake #2: Rambling On (and On and On and On…)

A business proposal should be concise and to the point. Your company is wonderful, and you do wonderful work, and you’re the best in your industry. But there’s only so much writing about your specifications and accolades a client can read before their eyes glaze over – and they toss your proposal out with tomorrow’s trash.

What to do instead:

Get to the point. Of course you want to set yourself apart from the rest. But, again, the way to do that is to center the client. It’s not about how great you are; it’s about how your business will meet a client’s need – and do so better than your competitors could. Outline the benefits of your service and show what makes you valuable – but keep it down to two pages or less.

Certainly, take a little time to introduce your team and their roles – and include headshots, since these can be a good way to break up large blocks of text in the business proposal. They’re also a way to make your proposal more personal. Make sure everyone smiles!

Don’t get into the gratuitous details, though – like the professional associations that include your teammates as members, for example. This is especially true if you’ve paid to join these associations. These are unlikely to impress the client. The focus should always be on previous projects and accomplishments.

If you’re sending a web-based proposal, don’t write pages and pages about everything you’ve achieved as a company. Instead, insert hyperlinks to preexisting information, so they can see for themselves what you’re capable of. If your submitted proposal is printed, attach that information as an appendix and not in the body of the text.

Mistake #3: Failing the “So What?” Test

Your proposal shouldn’t read like the “About Us” page on your website. Again, you’re not giving a history of your business or explaining; you’re presenting your business as a solution to a problem. Capture Planning calls this the “So What?” test.

When the customer reads your proposal, what are they getting out of it? If you can’t answer this before you send it, you’ve got a problem. You’ve got even more of a problem when the customer doesn’t even know what you’re proposing.

What to do instead:

Literally, ask yourself – “So what?” What are you proposing, and why should they care? The person reading your proposal likely has countless competing proposals, and their job is to select the best one. Yours should express your specific solution and why it’s better than all the others. We already know what you stand to gain from this deal, but what does the customer stand to gain? Include enough information for the customer to make an informed decision – and make it enticing. Do away with everything else.

Contact iQuoteXpress Today

Having great content for your business proposal is just the first step. At iQuoteXpress, we’ve developed software designed to help businesses just like yours deal with the proposal process. Using our software, you can store critical information – such as client data and proposal requirements – to facilitate the process of writing and submitting proposals.

Interested in learning more about how we can help? Contact iQuoteXpress today for more information and to download a free demo of our software - no contract or obligation required. We’re excited to see what we can do for you.

10 Things Your Boss Will Look for on Your Business Proposal.

Being able to write a business proposal is a basic skill every entrepreneur should have.

Unfortunately, that’s not always the case. There’s a lot that goes into drafting an excellent proposal, and your boss likely won’t take the time to outline what that is for you. If you’re tired of having your business proposals rejected, there are some things you should know.

1. You must understand the client.

There’s no way you can help to outline a solution to a problem if you don’t have a clear understanding of the client’s problem and what they want from a good business proposal. It’s rare that you’ll know exactly what the client wants right away if you’ve never worked for them before, but as you continue to draft your proposal, you’ll begin to gain a clearer idea of who they are and what they want.

The best way to come to an understanding of a client and their needs is through conversation. Talk to them about their concerns, operating policies, management philosophies, and anything else that’s relevant to your project. If there have been previous attempts to reach the goal you’re working towards, you can use that information to shape your proposal into something they need before they even realize it.

2. Clearly outlining the solution is the most important part.

The purpose of writing a proposal is to outline a solution to a specific problem. It’s as simple as that, but it’s surprising how much attention is placed on other parts of the proposal, detracting from the solution.

The solution should be clearly stated. It should begin with a concise statement that says what should be done and provide an easy-to-follow plan for accomplishing it. By the end of this section, the client and the stakeholders should have no questions about how the changes will alleviate their problems.

3. Never forget the header testimonial.

This might seem like an extra, but it’s actually a very important part of making a good impression on your clients. Your header testimonial is typically comprised of a quote from a past or existing client who has worked with you and your products and services before. The quote comes near the beginning of the proposal and supports your ability to get the job done, and it functions to grab the attention of your prospects in order to entice them to continue reading.

When it comes to getting good testimonials, Alex Turnbull, CEO of Groove says, “Good testimonials aren’t fluffy; they communicate very specifically the type of person the testimonial writer is and the type of problem they’ve been able to overcome. This helps readers put themselves in the storyteller’s shoes.” This kind of testimonial is exactly what proposals need to get off the ground running.

4. Make sure the scope of work is accurate, even if it’s not impressive.

Every proposal includes a section about the scope of work, namely the time frame it will take to get your solution underway. One mistake many proposal writers make is underestimating the time frame in order to make the proposal look more impressive. They will soon realize that your time frame is off when it takes longer than the stated amount, which won’t impress your client in the least.

Always be realistic about the time frame, even if it looks unimpressive. As long as you thoroughly describe the reasons behind the extended time frame, and the reasons make sense, it will make an impact on your client.

5. Outline the investment for the sake of the stakeholders.

If investors have read through your proposal up to this point, it means you’ve gotten their attention, so it’s now time to give them the details of your business model. They want to make sure the investment they’re about to make is a wise one. Details should include a description of product sales, licensing, services, advertising, salaries, rent, inventory, maintenance, and anything else that applies to your business model. Assumptions should be listed and justifications given.

All in all, these investors want to know how much they stand to make through your proposal and when the money will start. Their biggest concern is going to be cost, so make sure you’ve detailed this section of the proposal very well.

6. It’s a competition.

You’re likely not the only company presenting a proposal. Keep in mind that it’s a competition, and you should treat it as such, particularly if you’re the underdog. “If your competition is a company that is much larger than yours, then you've got to show your strengths,” says Shervin Freed in his book Writing Winning Business Proposals. “Maybe you specialize in the client's field or can focus intensely on solving their problem.” Either way, keeping this perspective in mind is essential to outshining your competitors and securing the deal.

7. Play up the benefits.

Of course, you must outline the weaknesses of your proposal to keep it realistic, but that doesn’t mean you should state the weaknesses only. As a general rule, make the benefits look much stronger than the weaknesses. You can’t hope to win over the client if your proposal makes it sound like the disadvantages far outweigh the advantages.

8. The opening statement is like a first impression at a job interview.

Treat the opening statement as you would the first sentence spoken in a job interview. It should be courteous, intelligent, and show your enthusiasm for working with the client. Take the opportunity to thank the prospect for the opportunity and show your vast interest in providing a solution for their need. It should be concise, polished, and clearly represent what your company does.

9. You need to be qualified to write the proposal and be able to show it.

At some point, your qualifications are going to come up, and you need to be able to show that your company is the best for the job. This should be based on your competitive strengths and the past experiences you’ve had. Highlight your talents, experiences, and other qualifications throughout the proposal so the prospect has no reason to doubt your credibility.

10. Make it shine.

Once the entire report is compiled, it should be polished in order to remove any errors. It should also be attractively formatted with a professional edge for excellent presentation. For every grammar and formatting error the reader finds, you’ll lose points as far as credibility and competency go.

Contact iQuoteXpress for a Free Software Demo

There’s a lot that goes into writing a successful proposal, and it’s not always easy to handle the process on your own. If you start to feel overwhelmed with your responsibilities, it might be time to look into using software that will automate some of your processes. The software at iQuoteXpress can help you automate processes like financial estimations and data collection. Our software can help make proposals hassle-free. Contact us today if you’re interested in more information and a no-obligation, free, online demo of our specialized software.