Profits and savings in the sales and quotation process
12 March 2012
Do you ever make a mistake? Of course, we all make mistakes. That’s only human and it’s alright to make mistakes. If you’ve made a mistake and can admit it to your client, this often even leads to an improvement in the relationship between you and your client. But how much did the mistake cost?
The costs of a mistake
Clearing up a mistake probably costs more than you think. I’ll give you an example and along with a bit of simple arithmetic. Say you sell a machine for EUR 50,000. You make a profit of 10% on this machine.
Sales price: EUR 50,000,-
Costs: EUR 45,000,-
Profit: EUR 5,000,-
Say you forgot to bring an option along with the delivery. You should have known that this part was needed. An option that costs you EUR 2,500. You decide to deliver the option. Which makes a good impression. Your profit is halved:
Sales price: EUR 50,000,-
Costs: EUR 45,000,-
Extra costs: EUR 2,500
Profit: EUR 2,500,-
Profit?
But is your profit really halved? To clear up a mistake costs you far more! You have:
- held extra talks with your customer
- ordered extra parts
- planned an urgent order – that holds up the rest of production
- incurred extra transport and installation costs
- possibly made adjustment costs for the machine delivered
All in all, you probably doubled your costs compared to a normal delivery of the option:
Sales price: EUR 50,000,-
Costs: EUR 45,000,-
Extra costs: EUR 2,500
Unexpected costs: EUR 2,500
Profit: EUR 0,-
Apart from that, you will probably have to deal with loss of profit for the option you would normally have been able to sell in a standard way. There’s a good chance that the machine you sold will earn you nothing.
No more forgetting questions
The most important cause of the abovementioned mistakes is that both you and your customer simply forget to ask certain questions. A Guided Selling system prevents these kinds of mistakes and guides you and possibly your client through a question and answer set up. In this way, all relevant questions are asked in a timely manner. This not only makes a more professional impression, but also prevents costly mistakes.
In practice
How do our customers work with this system? Read one of their stories here. For example, read how GEA Goedhart brought down the percentage of mistakes in complex project offers from 60% to almost 0%.
Marijn Schouten is Director Business Development at Sofon - supplier of sales support software. As Marijn has a lot of contact with clients, he 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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