We recently sat down with Reuben Swartz, founder of Mimiran and an alumni of the pricing consulting world. Reuben has decades of experience and is a well-respected expert on sales proposals.
Our full interview with Reuben covered many topics and is available to PricingBrew Journal subscribers. But one of the things that Reuben talked about served as a great reminder: The power of choice dynamics.
Salespeople quote business without knowing a customer’s budget all the time. It probably happens more often than we’d like to think. And whenever it does happen, there’s a good chance that the proposal will be underpriced. After all, when sales is having to guess, they don’t want to risk losing the sale or end up being so expensive that their proposal is thrown out of the running.
During the interview, Reuben reminded us that there’s an easy trick to get around this problem—simply give the customer a choice between good, better and best solutions.
When a salesperson puts options in front of the customer, they’re freed from having to quote the one thing they think is the right solution at the right price. They have a much better chance of addressing the customer’s needs by bookending their quote with a solution that offers even greater value at a higher price and another that’s stripped down at a lower price point.
This simple approach of giving customers a choice in a proposal is full of advantages:
- It helps to ensure the quote isn’t under- or overpriced…or easily dismissed.
- Money isn’t left on the table if a customer wants the higher value option.
- You still made a profitable sale if a customer wants the lower value option.
- The middle solution looks more affordable compared to the higher value option.
- Finally, if none of the options fit, you’ve signaled willingness to continue a dialogue and come up with other solutions.
Of course, you need to be sure that these choices aren’t simply higher and lower prices of the same solution–there has to be a commensurate change in value as well. But if you can do that, you’ll be able to take some of the guesswork out of sales proposals—and have a better chance of closing more deals and capturing more value.