Ray Collis

The Importance Of Offering Options In Your Sales Proposals

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Choice is good. That is a fundamental principle of western economics. However research now suggests that the choices contained within your sales proposals and quotations can have an important role in determining their success.

What Choice Do You Offer?

You have gathered the client’s requirements, asked lots of questions, including the uncomfortable ones about budget and price. Now it is time to propose a solution and pitch your price.  Based on your historic win rate what you propose has a 60% chance of being accepted.

However it is not a perfect science and as many as 4 out of 10 times the sale is lost. This can be explained by the fact that there is still an element of guesswork required in respect of the proposal. Not all your questions were fully answered and in particular the buyer may have ‘played it coy’ in respect of what he, or she was planning to spend.

In many cases the seller only gets one shot at the proposal and naturally feels compelled to get it right. But in the absence of full information and engagement on the part of the buyer and without being able to read the buyer’s mind, the seller is force to make some choices on the part of the customer. That however is risky and can lead to a situation where the seller proposes and the buyer disposes.

Do You Provide Freedom of Choice?

Many sales proposals don’t present options or choices for the buyer. The formula is limited to ‘here is the product – here is the price’. As a result the decision for the buyer is limited in scope to ‘buy from us’ or ‘don’t buy from us’.

Does the choice you offer your customers go beyond buy from us, or buy from a competitor?

Predicting how the buyer will react, or how competitors will respond is not easy. So why not ensure your proposal provides the buyer with options to chose from? Instead of a single price – solution, it can be advantageous to offer the buyer greater freedom of choice.

As a salesperson you shouldn’t have to choose for the customer. Instead, present him, or her with the choices – ‘this for that price’, ‘this plus that for this fee’ and so on.

Why Offer Only A Single Price Offering?

Many sellers in writing their quotes and proposals end up making their customers choices for them. They present the buyer with a single price offering and few options.

[expand title="Click on the arrow if you would like to see why this happens."]

- A particular product is being pushed by the seller at this time (encouraged by sales targets and incentives).

- The salesperson is only comfortable or familiar with a particular product and does not have the confidence or skill to sell other variations, or to creatively package or bundle a range of solutions.

- There is siloed approach to selling within the sales organization with little cross-selling or up-selling across the different product or brand ranges sold. There may even be competition between different product, or brand teams.

- The seller has interpreted the buyer’s needs and feels confident enough to be able to propose the seller with a single ‘optimal’ solution. Perhaps no interpretation was needed with the buyer setting out in detail what he, or she required.

The proposal contained the usual disclaimer – this proposal is based on our understanding of your requirements at this time. “We would however be delighted to discuss other options or additional requirements at any time”.[/expand]

Are you effectively making the choice for the customer by limiting the options you propose?

Most sellers I know want to keep the dialogue open even after the proposal is submitted (just as the text above suggests). The problem is that when presented with several proposals from different suppliers the buyer may not be willing or able to re-open discussions with a seller.

Do your proposals prematurely restrict the customer’s choices?

To often the proposal is a ‘do or die’ episode for the seller, one that may be foisted on the seller prematurely.

Always Offer Your Customer A Choice

The advice for the seller pitching has long been to ‘offer a choice of something or something else, rather than something or nothing’. Even in respect of a detailed tender specification and an exhaustive consultative sales process, it still makes sense for the seller to avoid being boxed into a corner.

Could offering your customers more choice increase your likelihood of success?

Presenting the buyer with choices can help the him, or her to decide. That is the scientific reality based on cognitive research by experts such as Dan Ariely. It points out, for example, that most people don’t know what they want until they see it in context.

The bottom line is that choices offered by the salesperson and how they are presented has an important bearing on the buyer’s decision.  That is something that is examined in another insight called – How To Influence The Buyer’s Choices.

Putting It To Work

Do you sell like DELL?  Dell is a good example of maximum choice for the customer. If you buy a computer on Dell’s website you can choose the processor, the RAM, the storage memory and of course the color you want.

The price is calculated based on your choices and you can adjust it upwards or downwards by adding or removing features. Imagine if you could do something similar with how your solution is sold!

Well let’s experiment with doing exactly that.

The Choice Set You Offer

What is the choice set that you offer to your customers? The more technical term for it is ‘Choice architecture’.

Think of your in terms of a set of choices, rather than a ‘take it or leave it’ proposition. Then think of the buyer’s decision in terms of the choice set from which the customer must choose.

Try putting the customers choice set in a table that makes comparing the alternatives for the customer easy – as per the example below.

To do this list the decision criteria in the far left hand column, then the options shown column by column after that.

For inspiration click here to see examples of comparison tables.  We have created a simple 3 column template in powerpoint (click to download) to help you.

Creating a table such as this can be a challenge. It focuses attention on the real choice variables for your customers. These are not always what your marketing seeks to highlight, they may not even be what you consider to be the basis of your company’s competitive advantage. They have to really matter to the buyer.

You could take it a step further an assign a weighting in terms of importance in the customer’s decision to each of the choice variables (e.g forms = 20%, style template=10%).  You can also do this with the totality of the choices faced by the customer, including the competitor offerings.

What is the variable that (for your customers) is not really as important as your marketing suggests?

A table comparison of options is all very rational. It suggests that the customer will weigh up the alternatives and select the best solution, the best price-value mix. However remember there is another dimension to the choice-making process – one that is less rational-analytical in nature. As seen earlier, there are 6 ways in which the seller can influence this aspect of the decision.

If you would like to read more on how you can sway your customers towards a particular choice, click here.

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