Points for improvement in the quotation process
12 April 2011
On Thursday March 31 2011 the seminar ‘More orders with less effort’ took place. Dozens of very different companies gathered to find out what kind of improvements they could make in their sales and quotation process. And there were quite a few; the tips for the participants came fast and furious during some enervating talks.
Improving quotation texts
Menco Erenst of Winning Quotations Only was the first speaker. He had some concrete tips to improve quotation texts, as “You will never get a second chance to make a first impression, both face-to-face and on paper”. This is very true. Menco told those present that it is very important to point out your distinctive value in a quotation. Otherwise you run the risk of prospects judging you on price only. And you need to write a quotation from the customer’s standpoint: a quotation is meant to match the needs and desires of a customer to a company’s products. It should not be a presentation of the products to be supplied. A quotation should also be well-presented, e.g. think of:
- Adding a cover letter
- Using a well-thought out structure
- Adding illustrations
- Writing in a positive and active way
But a good quotation is not only attractively written and designed, it contains the right information and needs to reach the prospect at an appropriate time. Dennis Vriese of Sofon discussed the challenges in the quotation process.
Developments
Dennis Vriese sees a number of developments in the market that bring businesses substantial challenges:
- The customer is more professional and knows exactly what he wants. This often leads to a client-specific combination of components in a product or service.
- The customer is more critical: there are more quotations necessary to achieve an order.
- The customer is price-conscious: quotations are requested from more than one business, bringing the quotation win rate down.
Quotation win rate
A SalesQuest study (2010) shows that the success rate for quotations is currently 8%. That means hat 92% of quotations never become orders! What would it mean if the success rate of your quotations could increase by a few percent? What would it mean for your turnover?
By reacting to the developments in the market in an intelligent way and identifying the bottlenecks in the sales and quotation process, the quotation win rate increases.
Bottlenecks
First of all, we want to map out the causes of low quotation win rates. What are the bottlenecks you need to deal with?
- Speed – quotations are produced too slowly
- Quality – quotations contain errors
How can we tackle these bottlenecks? The answer is simple: by guaranteeing knowledge and making it available to staff, fewer people are involved in the quotation process, while they do use the right information.
The solution
Using the Sofon quotation system means that knowledge is guaranteed and made available to staff. Product, calculation and other experts contribute their knowledge to the software. This is made available through a questionnaire. By answering the questionnaire, needs are analyzed, products are configured, prices and margins are calculated and quotations are put together.
We call this world (of needs analysis to quotation generation) Guided Selling and it is somewhere between CRM and ERP.
Schematically it looks like this:
What could be achieved when making knowledge available?
By sharing knowledge, production, sales and management can share knowledge and therefore improve their communication and cooperation:
- Every sales person (including your new sales rep) can quickly put together a correct quotation without possessing extensive product knowledge.
- Every sales person can offer an adjusted quotation in no time.
- Every sales person knows whether a product can be produced or not and mistakes in production (and frustration) can be prevented in this way.
- Less effort needs to be spent on producing a quotation, speeding up quotation cycle times. In this way, your accurate quotation will land on your prospect’s desk sooner than the one your competition sends. The result: MORE ORDERS WITH LESS EFFORT.
And what has the customer achieved?
Guy Mutsaerts of Sofon customer Goudsmit Magnetics recognized himself in the problem sketched. Knowledge was spread around the whole organization, departments had their own way of doing things, unnecessary amounts of specials were offered… In short, mistakes were made that could have been prevented. Goudsmit selected Sofon’s quotation software to guarantee knowledge and to realize growth, partly through this new approach. Within 5 months Sofon’s quotation system went live at Goudsmit Magnetics. And the results are spectacular:
- New staff are trained quickly
- Communication between Sales and Engineering has improved
- A standard has been defined, making less production of specials necessary
- Sales personnel are now really selling
These results have led to time savings and fewer mistakes in the sales and quotation process. This makes it easier to score orders.
Quick Scan
Would you now like to know whether these results can be achieved for you? Take part in a free Quick Scan. Register here and discover the savings you can make.
Judith Steinmeier is Communication Manager at Sofon - supplier of sales support software. As Judith has a lot of contact with clients, she has a clear insight into how companies that deliver customer-specific products and services can realize improvements within their sales and quotation process.
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