So what’s the difference between a sales quote and a proposal? Sales quotes are simple one to two page documents that show a purchaser their pricing and potential final bill. A sales proposal, on the other hand, consists of not only a quote, but also additional information about the company, products and services offered, an agreement, and can even include existing client testimonials.
There is definitely a debate about which is better or more appropriate. Proposals are much more comprehensive, but by the same token, may require more time to be prepared.
Our product, PandaDoc, automates the creation and delivery of sales collateral. Thousands of sales documents are sent with PandaDoc monthly. Quotes and proposals make up a large portion of the documents created using our application. In order to find out which format or document was better, we analyzed our user base and uncovered a number of interesting facts:
1. 63% of the offers below $100,000 are sent via 1-page quotes.
2. 87% of the offers above $100,000 are sent via proposal.
3. On average, clients spend 272% more time reviewing sales proposals vs. sales quotes.
4. Clients open sales proposals 42% more often compared to quotes.
5. Clients will forward proposals to their colleagues 21% more of the time.
6. Sales proposals are accepted more often, and proposal acceptance rates are 11% higher than quotes.
Our data clearly demonstrates that proposals are a better format for sales documents. Here are three reasons why:
1. More Info and Less Documents
Paperwork isn’t fun for either party, when trying to reach an agreement. If you’re trying to close a deal with a quote, you have to eventually follow-up with a contract. And possibly even provide more info about your company or product.
While proposals do require more content, they are the one all-inclusive document -- including a quote, company info and history, as well as the contract.
And think about all of the post-closing activities. Having just one document to review, especially from a reference standpoint, is much simpler. It’s also far less likely that something will get lost, when handing documents off for multiple approvals, if everything is together from the start.
2. Less Follow-Ups Before a Final Decision
If you went the quote and contract route, as opposed to the proposal route, you’re likely going to wait quite a bit longer before your deal is closed. Why? Additional acceptances and approvals. One round for the quote and another for the contract. If other decision makers are involved in the process, you’ll be waiting on them to go through both documents as well.
Combining a quote with a contract, in a sales proposal, saves precious deal-closing time. When a proposal is accepted, both the pricing and terms are accepted simultaneously. PandaDoc also makes it extremely easy to conduct real-time negotiation and get legally binding electronic signatures on terms in your sales proposals.
3. Better Presentation of Your Offer
Sometimes, if you’re lucky enough, you’re the only vendor making a bid for services. In most cases, however, you are up against other companies for the business.
In cases like these, a comprehensive proposal with information about the history of your company, how you’ve helped similar businesses, or have done similar work successfully will seriously help your company stand out. You can even add prior client testimonials into a proposal. No one ever does that in a quote.
Using an automated proposal-generation tool allows you to add special media and branding to your proposals. Insert a video testimonial or product overview. Customize the design and feel. Clients will value the time and effort you’ve put in.
Presentation does matter, no matter which industry you’re in.
The truth is, proposals may not currently be the preference of your organization. Yet, even if that is the case, here at PandaDoc we are constantly working to help you prepare and manage your sales documents and collateral efficiently. At the end of the day, we want to help you close more deals faster, and we’re confident that sending proposals will take your sales to the next level.