The Price is Right or Is It?
The other day a client came to me with two proposals he wanted me to review that he was about to offer two new prospects. One proposal was for a Fortune 1000 sized company to coach members of their management team. The other was for a micro business with 15 employees to coach the CEO. The larger project was to the tune of mid five figures and the smaller was high four figures.
In our nearly 10 years of working together this was the first time he had asked for such advice. As we reviewed his offerings we discussed his success rate when offering proposals like these. He reported having a success rate approaching 100% when submitting proposals. Approximately 50 percent of the prospects negotiate his prices down while the other 50 percent accept his proposals as he delivers them. Many might say, “A success rate approaching 100 percent is great. Leave well enough alone.” Let’s explore the concept of submitting proposals and how to create a price structure from your past experience.
Being in the proposal business is tough from the outset. I prefer my clients do their selling at the time of making their offering to the prospect. I call this “The Meaningful Conversation” or “The Time to Collect the Check.” Some refer to this as closing the sale. I am a little uncomfortable with the word “close” as I want our customers to want/need what we have to offer. The word close sounds like strong arm tactics. We get prospects excited when offering our products and services by telling stories. The time to sell is during the time that the prospect is on an emotional high. When you make your pitch, telling business success stories, is the time to make the sale. To do so you have to be prepared to ask the prospect two courage questions, “Do you have more questions?” and “Do you want to work with us?” You, the seller, have to have fixed pricing in what I consider to be the best way to sell a prospect. Many, like my client above, have multiple/flexible product offerings thus proposals are the norm. When we can combine our offer at the time we make our sales pitch the chance increases to make the sale. However, when we make our offer to the prospect and then need to send a proposal, the excitement/emotion can be lost. Therefore, it is extremely important to have a plan to follow the sales process once the proposal lands on the prospect’s in box. Following with a telephone call that is planned in advance is a key to prosperity.
Getting back to my clients proposal, many companies wish that they had a success rate of 50 percent when submitting proposals. What does it mean when you have 50 percent of your prospects accepting your offer continuously? When considering that 50 percent accept your proposals without question you should think about raising your fees. It is possible that your fees are too low and you are leaving money on the table. This is often a quandary for my clients. They would rather work for less than ask for the going market rate. They are more concerned about losing sales than challenging themselves to be equal or better than what their competitors are offering. Playing safe is a strategy for being average. Creating new market highs for you and your collaborative team is like continuously hitting grand slam home runs.
Even if your rates become too high, you can still negotiate the rate. Negotiating the rate can mean demonstrating the proposals value at the original price. When negotiating with your prospect you can also discover additional value for the prospect. The result of negotiating could be keeping the same fees or even increasing those fees. Prospects who negotiate your prices down will continue to do so as you let them. In those cases starting from a higher rate can deliver your true value to your clients. The rule needs to be to follow rejection with evaluation of “Why did you choose someone else?” or “Why did you reject my proposal?” Remembering the old television series Columbo (Peter Falk,) the Lieutenant always went back for more discoveries, asking more questions. We need to do the same as my client above does. Finding out the why in giving the job to someone else allows you the opportunity to negotiate a better deal. Discovering the why could mean lowering your proposal price to something more comfortable for the client to pay.
Gerry Rose runs INTEGRITY Networking Solutions in Oceanside, CA. He works with people in business who want to attract the right prospects and generate more referrals. More than 10,000 businesses have been presented the INTEGRITY Networking Solutions system in San Diego, Los Angeles, Riverside, and Orange Counties.
Gerry’s stimulating presentation Unlimited Prospects, Unlimited Referrals is ideally suited for small business owners, home-based businesses, and independent professionals who want clearer direction and want to attract more prospects, develop dynamic systems, and strengthen their companies’ accountability. Gerry does one on one consulting, conducts a range of keynote speeches from thirty minutes to full-day education workshops. His book series, Unlimited Prospects, Unlimited Referrals, are available on the website, www.integritysd.com.
Gerry has more than 20 years’ experience directing business owners how to grow their businesses. He is a networking dynamo. Those who know him will assure you that he does a great job of bringing people together—which is why he started INTEGRITY.
Involved with networking organizations since 1984, Gerry is a Distinguished Toastmaster, a member of Toastmaster International, and has chaired numerous chambers of commerce and non-profit organizations.
Are you truly committed to attracting the right prospects and generate more referrals? If so then contact INTEGRITY Networking Solutions for availability and information. You can contact Gerry by mail at 1610 Quiet Hills Drive, Oceanside, CA 92056. Direct dial (760) 439-4623; e-mail to gerry@integritysd.com. For more information, go to www.integritysd.com
