PandaDoc clients often ask: “When is the best time to send a proposal to the client?”
Before you can decide when to send a proposal, you must identify the type of deal you are proposing. There are many ways to classify sales opportunities, but I like to use the length of the sales cycle.
Financial measurements like Revenue, ACV (annual contract value), and LTV (lifetime value) are not good ways to classify deals. A $10,000 opportunity means more to a bootstrapped startup than to a huge company, even when they are in the same industry.
To keep it simple, I split all deals into one of three categories:
Short (1 week or less)
Otherwise known as “order-taking,” these are deals with sales cycles of one week or less. An order-taking deal is rarely worth enough money to invest more than one or two calls. Many companies automate this process and remove sales from the equation completely as they grow.
Send a proposal as soon as you know what the prospect wants. If possible, send the proposal during the first sales call. This gives you an opportunity to flush out any objections.
With the right software, you can make adjustments on the fly and resend an updated proposal in seconds. Email automation tools, like ToutApp, are also valuable for automating follow-up after sending a proposal.
Medium (1-12 weeks)
A deal that takes between one and twelve weeks is a multi-step sale. These usually involve one or two decision makers and several phone calls.
Sending a proposal too early in this process has the potential to kill a deal that may have otherwise been mutually beneficial. Do not discuss specific pricing or terms before everyone involved in the decision agrees that your product or service provides value greater than the cost.
Send a proposal once you have identified all decision-makers and confirmed that they clearly understand and agree with the value of your offering. During a multi-step deal, never send a proposal simply because someone asks for it.
Long (12+ weeks)
Any deal that takes longer than twelve weeks to close. These deals, often enterprise-level agreements, usually involve many decision makers, evaluators, and influencers. As with deals in the Medium category, you should make every effort to identify decision makers and confirm that your product or service is able to solve a pain.
The appropriate time to send a proposal is often out of your control in this type of sale. You are usually at the mercy of the buyer’s purchasing process.
There are exceptions to these rules, but they offer a reliable framework for deciding when to send a proposal.
Bonus tip: With PandaDoc, you can see when your client opened your proposal and which parts of it they viewed and for how long. With this information, you can follow up accordingly and preemptively.
If you have any tips on the timing and logistics of sending proposals, let us know in the comments.