Peter Krišťák, 19.03.2018

How long should a price proposal be?

Even if your product is very complex, a price proposal must contain only so much information, so that your client - after quickly reading it - remembers all the important points.

I’ve made and read hundreds of price proposals in my life. The most effective were always those that complemented the personal presentation of their author, got straight to the point, and had a clean and clear format. Their task was to capture and document the essential points of the agreement at the given stage of the trade negotiations – nothing more. Below you will find five tips on how to improve your price proposal.

1) A proposal should serve as a document complementing a personal presentation – it is not a book for the client to read on long winter evenings. So a (slides-like) presentation is more appropriate for the price proposal than a standard written text document.

2) If the recipient or client’s team that assesses the proposal is not sufficiently familiar with your specific added value, it must always be presented. In this case, the contents of the price proposal presenting added value should constitute the essential part (80% or more) of the document.

3) Long blocks of text are your enemies. Use keywords, bullet points, pictures, and diagrams that are much easier to remember. Words that can be easily deduced from the context should be omitted completely. If an additional explanation is necessary, it’s better to use a small font in the footnote. Remember that anyone reading the quote will spend a maximum of 15 seconds understanding each page and no more than 5 minutes to read the entire proposal.

4) A price proposal is not yet a contract. It doesn’t need to contain a perfectly precise definition of each aspect of the agreement. Some points don’t have to be included at all, others can only be estimated or approximately defined (with the remark that they will be subsequently clarified). The quote must very clearly and accurately describe the most important points regarding value and price, which need to be agreed on at the given stage of the business negotiations.

5) Provide only the minimum required level of detail to avoid unnecessary questions that the client otherwise wouldn’t ask. For example, if the client does not explicitly require that you provide a breakdown of the price in man-days, don’t provide any. Or, if a part of the price proposal is only an approximate estimation, make it clear – round the amount off as much as possible and present it as a price spread.

The number of pages of the entire quote depends on several factors. A good price quote should have no more than 20 simple pages that are very easy to understand. But the commercial part should take 1 page maximum! In special complicated cases, it shall not take longer than 2 or 3 pages.

Peter Krišťák

Author is partner and founder of Pricewise

He specialises in pricing and revenue management

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