Commercial Proposal: What It Is and How It Helps Businesses

A commercial proposal is an informational tool designed to convince potential clients of the benefits of collaborating with your company.

Let's delve into what a commercial proposal is and how to structure one effectively.

A commercial proposal contains valuable information about your brand, its products or services, and contact details.

It showcases the advantages of your organization and nurtures the interest of potential buyers. With a well-crafted commercial proposal, you can increase sales and expand your customer base.

Why Businesses Use Commercial Proposals

Commercial proposals aim to sell a product or service, but other tools are needed to achieve this goal. A commercial proposal is just one part of the sales funnel. Its effectiveness lies in prompting the consumer to take the next step towards closing the deal. This step could be requesting a callback or additional details.

Typically, commercial proposals are used by B2B companies, where businesses engage in transactions with other businesses.

It's important to understand that a commercial proposal does not guarantee a sale but serves as a tool to achieve it. To increase effectiveness, use commercial proposals in conjunction with other methods such as advertising and social media marketing.

Types of Commercial Proposals

There are two main types of commercial proposals: cold and hot.

Cold Commercial Proposals (CCP) are sent to potential clients who have not previously shown interest in the product. The main task of a CCP is to intrigue the consumer and start a conversation. They are usually short and impersonal. Because of this, they are often perceived as spam, resulting in a low conversion rate.

Hot Commercial Proposals (HCP) are sent to those who have already had contact with the company. Their goal is to provide a specific offer and push towards a purchase. HCPs are longer and contain detailed descriptions of the terms of the deal. If possible, they are personalized to the buyer's requests and characteristics. These efforts are justified as hot proposals usually have a high conversion rate.

The formatting of a commercial proposal is not as important as its content. Commercial proposals can be formatted as letters, presentations, or even simple text documents in Google Docs.

Structure of a Commercial Proposal

An effective commercial proposal has a clear structure that attracts attention, engages the client, and prompts action. Below, we break down the main elements of a commercial proposal.

1. Title: The First Impression

The main goal here is to capture the potential client's attention from the first lines and encourage them to read the proposal. This part of the proposal should be concise, clear, and must include the benefit the user will get from working with you. Try to highlight a difficulty the buyer faces, ask an intriguing question, add specifics, and address the consumer directly.

2. Offer: The Essence of Your Proposal

This is the core of your commercial proposal. Here, you need to clearly formulate your unique selling proposition (USP). Explain how your product or service solves the client’s problem, its key features, and how it stands out from competitors.

3. Main Section: Delving Into Details

In this section, you provide a detailed description of the product. However, instead of simply listing characteristics, focus on the benefits for the customer. Show how your offer will save them time, improve efficiency. Back up your claims with evidence — data, case studies, testimonials.

4. Handling Objections

Every client has doubts. Your task is to anticipate these doubts and address them in advance. In this section, talk about guarantees, return policies, offer bonuses, or provide a trial version of the product. Testimonials from satisfied customers can also serve as a strong argument in your favor.

Below are the most common reasons for objections:

• Price: The client may find the price high due to a lack of understanding of the product, a habit of cheaper goods, or doubts about the price-quality ratio. Conversely, too low a price may raise suspicions.

• Terms of the deal: The customer might be dissatisfied with long waiting times, limited payment options, or unsuitable delivery/service conditions.

• Competitors: The client may already be using another company's services, be satisfied with the price and terms, and reluctant to change the established workflow.

• Quality: The product’s characteristics might not meet the client’s expectations.

5. Cost

Commercial proposals do not always include price information, especially if it is calculated individually for each client. Nevertheless, for many buyers, the cost is a key factor in decision-making. If you have a fixed price, be sure to include it in the proposal. If the price is calculated individually, provide an approximate cost range and explain what factors it depends on.

6. Call to Action and Contacts

Conclude the proposal with a clear and understandable call to action (CTA). This could be "Call us," "Submit a request," or "Order now." Place your contact information next to the CTA: phone number, email address, and link.

Important: The length of the commercial proposal depends on the recipient. A "cold" proposal, sent to an unfamiliar client, should be short and fit on one page. For interested consumers already familiar with your company, prepare a more detailed proposal with comprehensive descriptions.

How to Make a Commercial Proposal Effective

1. Understand the Client's Concerns

Study their business, problems, and needs. Ask yourself two key questions: what is the client’s pain point, and how can you help? Focus on the benefits for the customer, finding out how your solution will improve their business. Use less "we" and more "you": focus on the buyer, not yourself.

2. Demonstrate Your Competence

Personalize the proposal, showing that you have studied the client’s business and know their needs. Don’t just list your services; offer an action plan to solve the client’s problems. Use data and examples to prove your competence with facts, case studies, and testimonials.

3. Make the Offer Tangible

Turn abstract services into understandable concepts, using analogies and comparisons. Visualize the information by adding images, graphs, and charts to make the proposal more illustrative. Use quality design to make the proposal aesthetically pleasing and easy to read.

4. Justify the Price

Be honest. Don’t hide the cost; explain it. Offer options, providing the client with a choice between different service packages or proposals. Emphasize the value, highlighting the benefits the customer will get for their money.

5. Use Psychology

Create a sense of urgency by offering a discount or bonus for a quick response. Show testimonials from satisfied customers and use social proof. However, don’t overwhelm the client. Make the proposal simple and understandable, avoiding complex language and technical jargon if possible.

Remember: An effective commercial proposal is not just words but a tool that earns the client’s trust and convinces them of the value of your product.

How to Create a Commercial Proposal

Below, we will discuss how to create and properly format a commercial proposal.

• Before writing a commercial proposal, conduct competitor research. Study their offers, prices, and market positioning. This way, you can identify your strengths and advantages that set you apart from other companies. Formulate a clear Unique Selling Proposition (USP) that clearly and concisely shows the client why your product or service is the best option.

• Understand your target audience, their needs, expectations, and preferences. Collect feedback from current clients to understand what is important to them and why they chose you. Conduct surveys of potential buyers, and study feedback on social media and thematic forums. The better you understand your audience, the more precise and relevant your commercial proposal will be.

• Determine the format of your commercial proposal. It can be a text document, a PDF file, a presentation, an email, or a landing page on your website. The text should be easy to read: use simple fonts and break it into small paragraphs. Add images, tables, or infographics for clarity. However, do not overload the proposal with visual elements to avoid distracting from the main points. Use ready-made commercial proposal templates if you lack experience in creating them. Such examples can be found on Canva, Pandadoc, Visme, or even Freepik.

Commercial proposal template on Pandadoc

Conclusion

A commercial proposal is a powerful marketing tool that attracts new clients, increases sales, and boosts profits.

An effective commercial proposal is clear and persuasive. It clearly outlines the benefits of the company's product or service and demonstrates the value it offers to potential clients.