March 15, 2022

#31 - Your Sales Proposal Strategy

#31 - Your Sales Proposal Strategy
Apple Podcasts podcast player badge
Spotify podcast player badge
Google Podcasts podcast player badge
Overcast podcast player badge
Castro podcast player badge
PocketCasts podcast player badge
RSS Feed podcast player badge

You need to present a proposal to your customer. Do you have a plan? What do you intend to include? How are you handling pricing and terms?

In this concise 14 minute episode, Brendan and Bob talk about the key steps and strategies you need to have as you get ready to present an effective, compelling proposal. 

To learn more about B2B sales and get regular updates, sales tips, templates and other resources, sign up for Brendan's newsletter here. And to purchase Sales Craft: Proven Tips, Practices and Ideas to Advance your Sales Success, click here.


If you'd like to learn more about what we do, then please visit:


Okay. It's another episode of Let's Chat Sales. And this time we're talking about proposals. What to do. How to think about them. What not to do. So a longer-haired version of me is talking about all those things in this episode. If you like it, please like, and subscribe and let's get started. 

Hey Bob, it's another episode of Let's Chat Sales. I feel 

like we do this, like once, twice a week. I love it. 

It's turning into that. And so I wanted to use this as a session to talk about proposals. It's kind of the next step on that whole...

You made it sound like, 

like you were coming to therapy. I want to use this session.

I find these conversations rather than therapeutic in the sense that they allow me to to think out some of this stuff that I know... some of my sales experience. A lot of it is just internalized and this is a way to think about it and articulate it in a way that's useful for other people. And in the process, it  helps me to further define my thinking process. So it is a little bit therapy. 

Well, and it's valuable for me. And I told you this a couple of weeks ago. A lot of the things we've discussed and a lot of the things I've read in your books and in your blog posts have been really helpful to me as I do sales functions. 

Well, thanks. You're you're, you're awfully generous and  you're on my sidekick. So you kind of have to say that. So to obligatory, 

so how much of this can we use? I don't know. 

 Let's get back on track here. I want to talk about pricing and proposals. They tend to get people all kind of clenched up and nervous.

The way I like to think about it is the proposal is, like so many of these things, is the natural progression in a sales process. If you're going about it in the right way, and you've done your discovery and you've developed trust, then you've probably got a pretty good idea what the proposal should look like already.

And more importantly, I think the customer has a pretty good expectation of what they will be getting in the way of a proposal 

Or in terms of the solution to the problem. 

The solution to the problem and also what they might expect in terms of the cost, as well. Because if  in the discovery process you've done a decent job of evaluating how your product fits in with what their problem is and solves their problem...

and you have some metrics in terms of the value that your product will deliver. And if it doesn't deliver significant value, measurable value, then you probably at a point where you ought to step away and say, Hey, listen, this is not a fit for us. We can't really solve your problem and move on.

But if you can, and you've been able to in the discovery process figured out that there's a good fit between what your product does and what they needed to do, and it delivers significant value. 

Then you kind of know what your price ought to be, or you at least have some range. 

Yeah. You had two issues here when you talk about metrics, right.

I would have the metrics of my company and how we've helped other people. Right. But you also ideally understand the metrics of the person you're talking to or  the company you're talking to, what their value is on solving the problem or what they've invested in solving the problem previously, or how much of a problem it causes them.

Right. Because I think that's part of the proposal process is really understanding their metrics as much as your own. 

Exactly. So... yes, you go into this with some knowledge of previous customers' success and what they've been able to see out of your product. 

At least hopefully. For early startups, you know, this is new territory. So you're using this customer to help you determine what that value is. 

But either way, the discovery process is still the same and that is you're trying to learn enough about what the product does and how it works and how it can address their problem so that you can have some measurement as to the value that they might hope to recognize.

And as you do that, s ome of the questions that come up in the discovery process ought to be, what's the value of this to you? Like, how important is this? And these sorts of things will help you when it comes time to put the proposal together. 

Yeah. When they say it's Q3 and you're in the middle of Q2, That helps you know that this could move pretty quick, I had someone tell me a couple of weeks ago, this is my number one priority for the year. 

Yeah. And they know  there's pain or there's or there's gain, and they know what it is.

And they can probably put a dollar value to it. So it doesn't harm you to say... what's this worth? How difficult the problem is it?  And at some level you can do a back of the envelope estimate yourself... like  does it remove headcount? And can you put  a value on the headcount that it removes? Or does it open up a new market?

And how big is that new market for them? And if their current revenues are $10 million, for example, or a hundred million, and this is a new market that's 10% or 20% of their current business, now you know what the value is and now you're working back from that.

And so then the question becomes, what percentage of that value are you entitled to? 

 And a lot of those discussions come organically, right? It's not a checklist of... tell me how much pain this problem calls you causes? You tell me how much you spent last year on this problem. And couldn't solve it.

Tell me how many man hours you've lost. It's not that it's much more like... what would happen if you had this solved? That's where I like to start. You know, if I, if I could solve this problem, What would that do for your company? Oh, that would allow us to start doing X, Y, and Z. Oh, really?

Tell me about that. 

And you're writing those things down, because those things end up in the proposal in some way or another. Here are areas where we can impact. Your are a few of the key areas... you've talked about this area, this department. Here are the cost savings. Here are the revenue gains.

Add those up, and, and that should be somehow or another reflected in that proposal. And as you're doing this, you're keeping track of these things. And you're getting buy-in in terms of agreement that there's a certain amount of value to be accrued.

You're not forcing them into an agreement. You're asking questions and  getting to acknowledge that there is value. And when that proposal comes back and they say... oh, that's too high. You know, that's way too much money.

You can say with complete a righteousness, so to speak... why. Why is it too high? 

You know, you're going to gain $2 million a year over this proposal. We're asking for $300,000 in software and so forth. What's the justification for charging less? Right. And, and that's a legitimate question.

 As you collect  these data points, you're in a position where you can say, Hey, you're making money off this. This is going to cost us this amount of time. We have support. We have software development. We're doing this integration work. Whatever it is, this is why the price is what it is.

And  it's one fifth of what the value is to you in terms of revenue. In terms of savings. Whatever that is. 

One of the things to keep in mind when it comes time to get a proposal is oftentimes people lose sight of the fact that whatever that value is that you're generating for them, it doesn't go away at the end of a month or a year.

It keeps accruing. So that ROI is often computed over the course of a year, return investment over a period of one year say, but they're still getting that  initial revenue and additional gain. Not always. Sometimes there's one time cost takeout, and then you got to compute for that, but many cases... that that value keeps going.

And so,  that's something to not lose sight of. 

I think the other thing about this approach that you're advocating. That makes perfect sense, is that it also helps the people who are your advocates within a company sell it to their leadership because you're playing with their script. Yeah.

Excellent point. 

And when you have to go the CEO with the employee who you've been working with closely, and the CEO... oh, wow, this is exactly what's in our annual report.  It looks like you're embedded in their company culture, much report, which I think increases that know like and trust factor.

Yeah. Yeah. And  I think this is the point you're making as well is, is you're actually educating your customer on how to sell it internally. So you're giving them the language and the evidence, the case studies and so forth, to  make the right decision to really parroting what they've told you.

Right. Yep. You're 

just compressing it into a two page proposal. 

Yeah. You're just putting it in a coherent,  bite-sized, digestible form that communicates the value elsewhere in the organization. And so that's one of the things about the proposal you have to keep in mind is... it's going to travel beyond your customer, your direct customer.

So it has to, it has to sell itself. It has to communicate the message. And you can't make assumptions that someone else that hasn't been part of the dialogue, but maybe part of the decision-making process, needs to be able to have that information. It has to be spelled out well enough.

So it can't be $500,000 paid  in 30 days... you know what I mean? It's got to have a story around it. It's got to have evidence. It's got to be a free-standing sort of document. 

I also find it's really helpful. If you can have your advocate that you've worked closely with on it, look at it before it goes into the mill.


This is the most, one of the most important tips I can give in terms of proposals.  When you send a proposal, send a rough version of that proposal  to your key customer. And it's plastered with the word DRAFT. Or it's an initial proposal. Or here's a working proposal. 

And it may not even have the numbers in it. But it has the framework and the approach, and it's got  some of the evidence and timelines, usually timelines and details.

All the things that they need to see. And if you can get that to them relatively early and then say... listen, here it is. I'd like to get on the phone or zoom call, whatever, and walk through it.

And clarify some things. And find out where we're missing anything.  That's an opportunity to ask... who will be seeing this? And what will matter to them? 

Because at this point in the proposal process, hopefully you've gotten the point where you've got a customer who's motivated to see this through. It solves the problem.

I'm convinced that you're the right solution. Now we're just figuring out

And I've invested a lot of time in you at this point. 

Yes, exactly. 

So I really don't want this to fail because then I've wasted 38 hours of my life for no reason. 

Exactly. That first version that goes out should be a draft.

And it should be to someone, and it's confidential and  it. Doesn't have typos, but it might have empty paragraphs. Or it might not have dollar values in some cases.  

Whatever the things are... you want to confirm stuff. This is a working document. And you're on the same side of the table with your customer drafting this thing and figuring this thing out.  

And that way you can start to trial balloon things like the cost, the range.

Here's what we're thinking over this period. And then, you know, right then and there... oh, this is a non-starter or that's in line with their expectations. So, that's that's just essential.  

The other thing I would say that's critically important, and this is a mistake that salespeople make all the time, is they is they provide a proposal. They provide pricing too early.

If you're dealing with any sort of complex  product or complex solution, the proposal is going to reflect that. 

And so the mistake a lot of salespeople make is they put together a proposal and share pricing before they adequately know what the value is to the customer and the customers will want to say... 

well, so what's your price? 

Well, I don't know what the price is yet.

I don't know what we, I don't even know what we're doing. Yeah. Is, would be the answer. 

We have to understand more about your business. Well, I don't want to tell you about my business. How are we supposed to tell you what it's going to cost? We don't know what the engineering is.

We don't know what the integration is. We don't know what features you need or what software.

Whatever the components are. So I think a mistake a lot of salespeople make is... they don't stand tough. They don't stand firm on the fact that... hey, listen, I need to understand some things before I can propose a solution.

We're confident. Right. But, Hey, I'm going to find a solution for you. We're going to get to a solution and you're going to want to pay me the value. It's interesting.  If I go through a process you've articulated well, price is not what usually slows things down. It's usually... oh, we were hoping to get this out 120 days and I've proposed at 180.

 Those are the types of things because the money is really already kind of embedded in it. 

Yeah.  These are important kind of conversations to have. And these important kind of positioning for you to have, because... if you do this properly, you've basically negotiated the deal.

So the only what's what's left is the legal stuff. Yep. Right. And, that should be a relatively straightforward process. If you've got the proposal and you've done the right things in the proposal, because it's setting expectations. 

It's laying out the framework for the relationship and an understanding of what each person's doing. And  you've taken a measure, ultimately, of what your customer's like to work with and what you're like to work with.  

And that, if done right and reflected in the proposal process, it makes the contract negotiation a fait accompli, if you will. So just very, very straightforward. Again, it's just another step, a natural progression in the deal.   

Well, let me summarize real quick. So I think what you've basically said is... if I do the discovery process really well. And really understand what my customer wants and needs and how that, how this will serve their purposes.

Proposal's not just easier to create. It's more of a collaborative effort with whoever my advocate within the company is, and that's going to ultimately make it easier for it to be sold within that organization no matter where it lands. 

Yeah. That's right. That's exactly right. 

 Good. I was paying attention. 

Yeah. Well, I think we wore this out a little bit. Didn't we 

Maybe, maybe.

 I think we covered some good. Yeah, 

I think so. I think there's some really good suggestions in there. 

Thanks, Bob.

All right. Well until next time. 

Okay. That was another episode of Let's Chat Sales. Hope you found it useful if you did do the like and subscribe thing. And then you might want to check out this one. I think there's one right here. Right. Where am I supposed to look right here? Right. Thanks for watching or listening.