Thursday, March 3, 2011

Only One Best Proposal

Some salespeople would recommend you offer a prospective customer three proposals. In this strategy, one proposal is to be more than you think the prospect’s willing to spend, one is much less than you think they’d spend, and one is in the middle price range where you really expect them to buy. The reasoning behind this strategy is that the prospect won’t buy the proposal that costs the least because it will make them look cheap. They won’t buy the most expensive one because they can’t, and they will buy the middle one because it looks like a bargain relative to the biggest one and it’s the safest, middle-of-the-road choice.

This approach may be fine for some types of products or services, but I’ve always felt that using it seriously undermines your credibility. When you practice creative selling, you’re really presenting yourself to the prospect as an expert in your field. You’re sending the very clear message that you have studied their situation, analyzed their opportunities and problems, and used your expertise to come up with the optimum plan just for them. Your proposal is that optimum plan.
How can there be three best plans? When you give the prospect three different proposals, aren’t you subconsciously saying that you’re not sure enough of your own abilities to make a positive strong recommendation?

Another similar tactic is to give the prospect proposal “A” while keeping proposal “B” in your briefcase for use “just in case.” Proposal “B” is always smaller, of course, and it’s the one you whip out at the first sign of a price objection. This tactic sends two really bad signals to the prospect. The first one we’ve already covered: what kind of an “expert” is so unsure of himself that he can’t decide which alternative is best? The second signal you’re sending is a real killer, though. Having seen proposal “A” and then proposal “B,” the prospect will be sure to think proposal “C” is waiting in the wings, and if they give the salesperson enough price resistance, it will appear as if by magic. Way to go! You just created your own price objection.

There’s another big danger in using either of these methods to give the prospect alternative proposals to consider. Faced with choices, most humans delay making a decision. In fact, many people hate to make decisions so much that they will actually welcome choices that have to be made so they can use them as an excuse to delay giving you a final “yes” or “no.”

Anyone who has been selling for more than about a week knows that the most frustrating customer isn’t the one who says “no,” it’s the one who says “maybe.” So why would you ever intentionally give the customer an excuse to “think it over?” Give them one proposal so they can give you one answer. It’ll simplify your life tremendously and you’ll be absolutely shocked at what it does for your time management.

A common excuse for offering alternative proposals is that the first proposal might be too expensive, so you should be ready with a fall-back position. There’s nothing wrong—and many things right—with changing your proposal at the prospect’s desk. After all, you’re still on the first call on a new prospect and you’re basing your proposal on some estimates you’ve prepared, not on hard data. It’s unreasonable to expect that you’re going to be right on target every time. You can make alterations in the proposal along with the prospect as part of your closing strategy.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

No comments: