How best to structure your Quote Documents?

by

Zach Weinstein

   |    

July 25, 2024

How best to structure your Quote Documents?
How best to structure your Quote Documents?

A Quote isn’t just a "legal" document outlining what your customer gets and what they pay for; it's also a Sales and Marketing document. This post will focus on the Sales aspect, and I'll cover the Marketing side in a separate post.

What does Sales Care About in a Quote Document?

  1. Professional appearance
  2. Clarity and simplicity
  3. Limited room for negotiation

While the importance of a professional look and clear, simple content is obvious, let's dive into why limiting negotiation room is crucial.

How Can Thoughtful Quote Presentation Limit Negotiation Room?

Refer to this previous LinkedIn Post about "package stuffing," which involves adding features your customer may not want to justify a higher price.

When you present these features as separate line items with individual prices, you give your customer leverage to negotiate by asking to remove certain features.

For example, consider Notion's Plus package, which costs $10/seat/month and includes:

  • Unlimited blocks for teams
  • Unlimited file uploads
  • 30-day page history
  • Inviting 100 guests

On a Quote, it's best practice to show a single price for Notion Plus ($10/seat/month) and reference a website or attached document for the feature details. The worst approach is listing all the features as separate line items and dividing the $10 price among them.

What might customers say if you do this?

  • "I don't need 30-day page history for $2/month. Can you reduce it to 15 days for $1/month?"
  • "I don't need to invite guests. Can you lower the price by removing that feature?"

But How Do I Handle Entitlement Provisioning?  

Entitlement Provisioning is critical. But it should not be confused with the line items you shown on the Quote document.

It is best practice to maintain a separate entitlements table that maps each of your customer-facing products (i.e., the Quote line items) to a set of entitlements in your product. As your products evolve, update customer Contracts through Amendments to move them to new versions of your customer-facing product with different entitlements.  

Conclusion

Package stuffing can feel like receiving a lump of coal in a stocking—disappointing and unwelcome.

Avoid opening the door to unnecessary price negotiations. Treat your quote document as a polished presentation of your company's offerings, not just a legal formality.

About MonetizeNow

Founded in 2021, MonetizeNow is revolutionizing GTM operations for B2B SaaS Enterprises of any size. At MonetizeNow, our mission is simple: to make B2B commerce completely frictionless and provide a delightful experience for your customers to do business with you.

Our innovative platform combines Quoting/CPQ, Metering, Billing, and Reporting, to deliver a truly plug-and-play Quote-to-Cash experience across all sales channels.

It’s time to empower your Sales, RevOps, and Finance teams with an all-in-one solution that will revolutionize your entire business. Reduce manual tasks, allowing a stronger focus on strategic pricing and innovative GTM strategies. Generate complex quotes quickly and enjoy full automation of your billing processes. Easily handle proration, co-term agreements, and renewals for seamless operations.

Get back to focusing on value. If you can build it, you can sell it with MonetizeNow.

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