Sales Training Article: 5 Best Practices for Handling Proposals

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

As a sales manager one of my least favorite activities was creating forecasts every month. One of the things that made it difficult was the fact that in my mind most sellers generated proposals too early when developing opportunities. They believed it was a step toward getting orders.

In my experience, a proposal represents activity but not necessarily progress.

I’ll share with you some thoughts and best practices for handling sales proposals:

Issuing proposals too early (“Quoting and Hoping”)
Purpose and role of proposals in the buying cycle
10 questions sellers should ask themselves before issuing proposals
Stale proposals
Withdrawal strategy

1. Think before you issue.

There is a problem in issuing proposals too soon. Unlike fine red wines they don’t age well. My thought is that after proposals have been issued, after 45 days the probability of resulting in orders is less likely with each day that passes by.

So why do sellers issue these proposals too soon?

The underlying reason sellers propose prematurely is they view proposals as selling vehicles (a “quote and hope” strategy). I couldn’t disagree with this logic more strongly.

Imagine that a decision maker whom the seller has never met receives a copy of this “selling vehicle.” He or she is unlikely to read all the verbiage from cover to cover. Even if they started with the intention of doing so, most would soon lose their resolve as they realized most of the words and content have little relevance for them. At some point they would merely go to the last tab, find the price and think whatever number they saw was too high. This should not come as a shock to anyone because the buyer has no idea of the potential value of the offering being proposed.

2. What is the purpose of a proposal?

I hope you agree it is not to sell. In my opinion a proposal should serve as a decision vehicle. By that I mean it should contain the information needed for the committee to make a buying decision. This information could include pricing, implementation plans, professional services, cost versus benefit, etc. In thinking back to control, however, won’t buyers appreciate learning these details during the sales cycle rather than waiting until the end? For this reason, I suggest a proposal should summarize the discussions between the seller and buyers. Rather than wait until the proposal, information (pricing, implementation, etc.) should be shared along the way. If done properly, there should be no new information in the proposal.

Unless it is a very complicated recommendation, I like to see a maximum of 10-15 pages. If you are compelled to include standard brochures and literature, please put them in a tab after the custom pages that you write. When you think about it, including information that they buyer has already seen should minimize questions and make it easier to ask for the business.

3. 10 questions you should ask yourself BEFORE issuing a proposal:

1. Has a cost vs. benefit been created that justifies the expenditure you’re asking for?

2. Is the person you’re giving the proposal to able to fund the initiative?

3. How many of the people that may be in the buying committee have you spoken with?

4. Do buyers understand the outcomes they are looking to achieve with your offering?

5. Do buyers understand the reasons they can’t achieve those outcomes without your offering?

6. Can buyers articulate specific capabilities within your offering will that address the reasons?

7. Have the buyers been provided with documented results other companies have achieved with your offering?

8. Will the proposal be forwarded to any people you haven’t already spoken with?

9. Do buyers have everything needed to make a buying decision?

10. Why are you issuing the proposal now?

Sellers give up a great deal of control once proposals are issued. Given a choice, my preference would be to err on the side of providing a proposal too late rather than too early.

4. Stale proposals hurt forecasts.

For sellers having several stale proposals in their pipelines, forecasting amounts to pushing dates out each month. They will strongly defend leaving them in the forecast, primarily because if they are taken out it will become clear they don’t have enough activity to make their numbers.

I believe sellers delude themselves. If they add up all the revenue from each opportunity the figure may approach the GDP of a small country. Sellers conclude that if they can sell a relatively modest percentage they will achieve their quotas.

The problem is that for most stale proposals, buyers have already gone with another vendor and didn’t want to deliver the bad news or the opportunity is going to wind up with “no decision” that will ultimately be bad news for all vendors that issued quotes.

5. A better way to handle stale proposals using a withdrawal strategy:

I suggest that after 45 days with no contact from prospects, the best course of action is to withdraw proposals rather than just remove them from the pipeline.
Consider sending a letter to prospects (please don’t overnight it) by sending a snail mail letter return receipt requested that would cost you about $3.00. It will be more formal than an email and you’ll be certain that the person received your letter.
In the letter indicate that you don’t feel you had done a good job of uncovering the prospect’s business issues and potential value and your intent is to withdraw the proposal but you would welcome a chance to have a conversation to see if it makes sense to consider issuing a revised proposal.

From here, it’s binary. The options are:

1. You never hear back from the prospect so you should remove the “opportunity” from your pipeline/forecast. Oddly enough this is a positive result. Once dead wood is removed the seller and manager will have a more accurate picture of the health of the pipeline and can take the needed actions.

2. The buyer contacts you and indicates the company is still interested. This is the desired result and gives the seller a second chance potentially to gain access to other people and to either issue a more compelling proposal or realize there isn’t sufficient value to warrant a buying decision (nor another proposal).

Proposals take time to write and often compromise a seller’s control of an opportunity. One way to minimize these issues is to be sure you are issuing proposals after all of the necessary selling has been done and to be sure an executive could be expected to read the custom content.

One of the core concepts we subscribe to in CCS® is that bad news early is good news. Realizing a loss after a proposal has languished for months isn’t “early” but I think we can agree it’s a case of better late than never.