Every year, we do some research to find the answer to one crucial question: What are the most important sections in any business proposal?
And every year, the answer is the same: the introduction and the pricing. While writing a great introduction deserves a post of its own, let’s focus on the pricing. It’s natural that your client is eager to know how much they have to pay whatever you’re selling.
Today, we’ll talk about the pricing section in a business proposal and how you can write yours in a way that will convince clients to hand over their cash.
What is the pricing section?
It’s the section of your business proposal where you show how much you’re asking for the product or service which you’re selling. Usually, it’s a custom-tailored quote for a specific client based on the meetings you had with the client before writing the proposal. The pricing section should be short, simple and to the point and present an accurate price for the product/service offered in the detailed specification.
If you need help with determining your price, we’ve written a detailed guide on how to price a service which may be a good place to start. As a general guide though, it’s always best to price services and products based on the value a small business provides, rather than basing them on hours or days spent working.
Do I need a pricing section at all?
You may be thinking that offering a price right out of the bat is not easy or even possible. However, our research shows that 27% of the time a client spends reading a proposal is spent on the pricing section.
It’s the second only after the introduction (38%), so customers will expect to see this section in the business proposal that you send them. We consider it so important that it comes by default in all of our proposal templates.
In other words, if you want to get any conversions from a business proposal, it has to have a pricing section.
What should my pricing section be called?
Common sense probably tells you that a pricing section should be called just that, “Pricing”. However, the practice has shown us that this is rarely the case.
The terms that do work are “investment”, “your investment”, “ROI”, “return on investment” and others. We haven’t precisely figured out why these perform so well, but they convert much better compared to anything else used as a title. The logic could be that the customer thinks of the price as a proper investment rather than just a cost for their business.
What should a pricing section include?
It depends on your product, the specific customer and their situation but the general rule is to keep it simple and easy to understand. Most of our business proposal templates come with some type of pricing table. The customer inserts the quantity of product/service they want, and they get the final price and that’s it.
Back in the old days of writing business proposals in Word, you would have just one chance to write out a price. Nowadays, you can use interactive pricing tables where the final value changes based on the variables that the client enters. For example, they could opt for 3 months of SEO services instead of one and the final price changes.
Should I go all out and offer several different packages?
Upsells and packages are a traditional part of sales. After all, if a customer is interested, you should go and increase their order value. The problem is, traditional sales logic does not apply here because the goal is different.
The main purpose of a business proposal is to get the customer to say yes and sign the proposal. The more options you give to the potential customer, the more they have to think over something which is a simple yes/no question.
The best business proposals (and pricing sections) have just one offer without additional packages or upsells. Your mileage may vary, but our research shows that it’s best to let the customer have a single decision – whether to buy or not to buy. It will make you seem more confident and it makes it that much easier to get the signature and payment sooner.
Where should I place my pricing section?
A great business proposal is like a story. Just as you wouldn’t put a conclusion at the beginning of a story, you don’t want to put the pricing section before the introduction. There is no specific place where the pricing section should go, but there are some general rules.
The introduction, the detailed specification (if it’s a product) or the conversion rate and projected ROI (if it’s a service), and the testimonial should go before the pricing. The reason is simple – you want the client to see the full scope of what you offer, how you solve their problems and how it worked for others, before you ask them for their signature and money.
What happens after the pricing section?
By the time a potential client has finished reading the pricing section, they’ve already gone through other relevant sections as well and you’re on your way to building trust. The pricing is the last piece of the puzzle to convince them to buy, which is why it’s important to follow this section up with another relevant section.
After the pricing section, we suggesting putting another one called “The Next Steps” where you tell exactly that – what happens next. It should contain clear instructions on what the client should do next.
Some of our customers like putting the testimonial section before “The Next Steps” as well. If you feel like the client needs some additional convincing after they’ve seen your price, this would be a good idea that you can benefit from.
After this one comes the section where the client can sign. If you’re using proposal software, the client will be able to sign your proposal immediately. What’s more, a good tool like Better Proposals will allow the client to pay immediately as well,
Every proposal you send out needs a pricing section. Getting it right takes a lot of practice and trial and error. However, once you nail that perfect value proposition, you’ll be able to get the client’s signature every time.