I spoke last week at the Sales GPS Executive Workshop in Austin, hosted by MDM and Indian River Consulting Group. I talked with distribution leaders there about how many distribution companies proudly consider themselves to be quoting machines. I’m also familiar with this idea from firsthand experience, as a sales manager for a distributor that prided itself on the volume of its quotes. More quotes lead to more sales, so the more quotes, the better. Right?
Not precisely. Quoting takes time and money, and there are times when more quotes do not lead to more sales. Imagine that a company has requested quotes from you 20 times in the past six months, but hasn’t purchased from you once. If you continue to generate quotes for this company without first trying to figure out why you’re losing, you’ll be wasting time and money on a customer that is only using you as a third quote.
If you look at your customer’s quote history before sending out a quote (assuming you have a process and CRM system in place that tracks this), you’ll have the opportunity to question whether participating in an RFP will be worth your time. If you decide to decline to quote, you’ll save yourself the time it takes to continually send losing quotes to this customer. Even better, you can use this failed quote history to start a new conversation with the customer, allowing you to use data to create an opportunity to probe deeper into what’s really keeping this customer from buying.
Beyond simply viewing quote history for a customer, one of my current clients is working with me to implement a quote-scoring system. Before issuing a quote, my client will ask questions like:
- Has this company purchased from me before?
- When is the last time I quoted this customer?
- When is the last time they’ve purchased?
- Am I on their approved vendors list?
- Do I have a champion within their company?
- Is the spec written around me and my product, or someone else’s?
You can implement quote qualification by putting a process in place where the answers to these questions are documented and assigned a value in your system. Each RFP can then be assigned a score that represents its total potential value. Or, if you’d prefer to add this to your quote-management process more informally, simply encourage your reps to think about these questions before cranking out that next quote. I’ve already heard from companies who are seeing positive results from a more selective quote process, and I’m optimistic about programs I’m introducing with my clients.
Have you already tried something like this in your own company, or are you considering changing your quote-management process? I’d love to hear about it; email me at [email protected].