There is more to Quoting than just the Quote

What is the purpose of a quote?
When should I quote?
How should I develop my quote?
How should I deliver my quote?
Should I follow up my quotes? If yes, when and how?
What should my close ratio be?

These are all questions that every organization needs to ask and answer in order to ensure they are maximizing the sales potential from their quotes. So let’s try.

What is the purpose of quote?
Well right there the debate begins. As I see it, the ultimate purpose of a quote is to provide documented confirmation of what you and your customer have already discussed and ideally agreed to.

However, many companies view a quote as a sales tool. Is it?

Does your customer really sit by themselves and go through your quote page by page, line by line, in order to understand your offering or do they skim it over quickly and skip to the page with the price?
Is the quote meant to be the main method of communicating your solution or is that your job as a sales rep?
If, prior to quoting, your customer communicates they don’t like your solution, will they change their mind once you put it on paper?

Sure, quoting is sometimes required for your customer’s ISO process or to hand over to purchasing but that does not make it a sales tool; it makes it a validation & confirmation tool or sometimes just an “administration” exercise for their purchasing department.

While a quote will also have a more detailed & accurate price (as well as terms and conditions), if you told your customer that your offering was $1000 to $1100, does it really matter if it’s $1063.72? Is that going to win or lose the sale? Maybe sometimes yes, but surely not generally.

If the price is the only thing that matters to your customer in your quote, are you not redundant as a sales rep? Surely there must be more to it.

Quotes do matter. They are required as part of every sales process but just remember, rarely do people get excited and buy something because of the layout or look of a quote document. In every industry, no matter what you sell, whether product or service, people still buy because they have a need and because they trust the people they are buying from to be able to fulfill that need. That trust comes from relationships, empathy, communication, the generation of credibility, etc… All things that are the responsibility of the sales rep to secure/establish with their customer. That’s where the value of having a sales rep really comes through. Not in just typing a quote.

When should I quote?
This is an easier answer but still one that the average sales rep has not perfected.

The right time to quote is when you have gathered ALL the information you need and fully understand what your customer is looking for. That means not only knowing what they want but also understanding their buying criteria, decision-making process, their budget, their timing, the rationale behind their need and timing, etc… They are not just buying a product/service, they are buying a solution. That solution is an amalgamation of many different variables – not just a price on paper.

So often a customer calls in and requests a quote “now, now, now”. Without thinking, we just type it up, fill in what information we know and send it over. To no surprise, you soon find out that your quote is sitting at the corner of their desk, under a pile of other quotes they haven’t read. What is went wrong? Did they really need a full quote or would a 3 line email have been sufficient? Was it too soon to send a quote? Did you know what variable would make them buy?

So don’t be too quick to just “quote, quote, quote”. Take your time, ask lots of open-ended questions, assess their true needs and then allocate your time and energy appropriately. Sometimes that may even result in you saying “no thanks” because you determine that realistically you are not the best fit for their needs.

Remember, just because your customer has asked you for a quote does not mean you have to give them one until you feel you have enough information to put your organization in a winning position.

The alternative is that you can be a “professional quoter” instead of a “professional sales rep”.

How should I develop my quote?
The answer is quite simple. Your job is to – as best you can – develop the quote with your customer instead of for your customer.

If the customer plays a role (notably in an information providing capacity) in developing the solution or quote, the likelihood that the quote meets their needs will be substantially higher.

If you view a quote as a document written to reflect the needs and solution of your customer, then you will be sure to include your customer in the development of their quote.

How should I deliver my quote?
While we have dedicated an entire section to this topic, the short answer is - in a vast majority of instances - quotes should be presented to the prospect/customer. Presenting the quote can be done via face-to-face or evening via phone.

There are 6 reasons why you should always present your quote.

Are there ever instances one does not need to present a quote? In certain businesses or industries where the customer requests a quote for products/services they have purchased from you many times in the past, presenting a quote is less critical because they know what’s in the quote, they know their expected return and you already have credibility established with them. Beyond that, you should always present your quote.

Tips:

Set up the quote presentation meeting first. Then, once the quote is ready, email the quote one day prior to the meeting.
Always send a meeting reminder, with agenda, a few days before the meeting to ensure the meeting proceeds as scheduled.

Should I follow up my quotes? If yes, when and how?
Other than in a few instances (like the example above where it’s an existing customer requesting a quote for products/services they have purchased from you in the past), you should always follow up your quote. So many companies have thousands of quotes “hanging out there” with little knowledge as to where these quotes are at in the sales process and no next actions assigned.

Here is how to follow up your quotes:
Step 1: After you have finished presenting your quote, immediately (before putting down the phone or leaving their offices) book your quote follow up appointment (see the “Using Phone Appointments Instead of Phone Tag” module for more examples & information”).

Step 2: After each follow up meeting, before putting down the phone or leaving their offices, immediately book your next follow up meeting – with an agenda.

What should my close ratio be?
This is a tough question because there are a lot of variables. Is the audience a past customer or prospect? Did they come to you or did you prospect them? Does your solution/quote best match their needs? Etc….

While there are many variables that are out of your control, how you approach the quote, whether you quote or not and how you present & follow up your quote are all items that are directly within your control & all can greatly impact your close ratio.

“How” you quote can often be more important than what you’ve quoted because your customer’s perception of you, your company & the quote will create the “total value” in their mind, which is the most important component for their decision-making. That’s why if there are two competing sales people offering the same customer a similar quote & price, one will win the business and the other will be left wondering what went wrong.

So while I hesitate to commit to what I believe is a close ratio show be, it’s safe to say that anytime you are closing at a 33% or higher rate, you are likely quoting “smartly”.

Exercise
Write down where you currently feel your strengths are in the quoting process.

Write down where you feel you can improve within the quoting process.

Write down some examples of quotes that you lost that upon reflection you should have done things differently.

What are you going to do differently next time you need to quote?

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