We have all received the calls requesting quotes. Check out this month's newsletter to see how you should respond.
All the best,  
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"SEND A PRICE QUOTE TO ME"
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"SEND A PRICE QUOTE TO ME"
The phone rings. It's a new customer you have never met who says, "I need a quote tomorrow morning on your highest quality product. Can you get that to me?" How do you respond?
Let's consider two options a rep can take:
Option A, "The Special Assignment Option" Rep "A" will rush back to her office, yell for her specialist and burn the midnight oil churning out a fifty-five page response. She may toss in a brochure, include a national discount, mail it to the customer and cross her fingers. Isn't this what a typical/average rep does? In the workshops I conduct I call this the "Special Assignment" option which is a euphemism for a rep in a precarious employment position.
My advice to Rep "A" is, "Don't be a quote machine." Inexperienced reps seem to adhere to the motto: "When in doubt, quote!" Most companies do a great job teaching reps their administrative duties, namely, how to produce bids. They generally don't do a very good job teaching high-quality consultative and strategic selling skills.
Ultimately you will have to generate a formal quote, but it should be at the end of your sales process.
Let's assume you are in month 1 of a hypothetical 10 month buying process. Let's also assume that you fully understand your customer's needs (unlikely). Even so, if you provide detailed formal pricing now, you will probably be asked to provide more quotes yet again in months 8, 9, and 10. At that point you will be competing against yourself and your prior pricing bids.
Option B: The Superstar Approach When faced with the "give me a quote" customer demand, Rep "B" asks herself: "Exactly why does my customer need this quote and where are they in their buying process timeline?" A superstar knows it is never in her best interest to provide formal pricing early in the game. Rather, her goal in pricing is to delay for as long as possible. Rep "B" understands that providing a formal price one week into a ten-month buying process is futile. After all, at that point it is unlikely that she knows exactly what the customer needs or whether in fact her solution is the right one.
Here's how she would respond to the quote request: "Sure! Happy to assist. Can you share with me why you need a price quote now, and where are you in your overall process of evaluating potential solutions?"
The two most logical responses from the customer would be:
1. "We are early in our process and I need a formal quote for the budget."
or:
2. "We are finalizing our vendor selection in the next 90 days. We are getting bids from all of your competitors and we want to include you in this process."
Let's take a look at how you would address each response:
1. Budget Response:
You are on the left side of the Trust Triangle. Your goal is to gain trust, NOT to dump a formal pricing contract on her. Your customer does NOT need a formal quote from you. She really needs a superstar consultant to set up and assist her with the budgeting process.
You should offer to provide assistance with her budget request. The document that your client submits for the budget should really be a powerful business case. Here is a suggested outline:
- Executive Summary: Current State - Future State
- Project Alignment With Corporate Strategic Goals
- Costs (Budgetary Pricing)
- Financial Analysis (Show Me The Money!)
- Alternatives & Preferred Option
- Timeline & Implementation Plan
- Recommended Next Steps
How do you delay providing formal final pricing?
Offer a formal budgetary letter quote in lieu of a formal quote. This letter should be a list price, since the future will bring budget cuts, potential price increases, new product updates or unanticipated options.
Be sure to provide the customer with reasons why providing formal pricing now is not in her best interests. For example, you could ask the customer: "Do you really understand how you would like the solution configured at this point?" Or, you can help her understand that a quote is a formal contract with legal implications and is only valid for 60 days. You can explain, "Ms. Customer, there are legal repercussions. A quote is a formal legal document valid for only 60 days. Our respective lawyers would have to review it. Are you at that stage?" 2. Time To Get Formal Pricing:
If your customer states that it is time to get formal pricing you can respond by stating: "I'm happy to provide the pricing you are requesting. In order to provide a solution that will meet your needs both today and in the future, I must first understand your project timetable, your business (if you don't already know it), your short and long-term challenges, opportunities, goals and objectives. Without that information, I cannot prescribe a mutually beneficial solution that will meet your needs today and into the future."
Don't forget!:
PRESCRIPTION BEFORE DIAGNOSIS IS MALPRACTICE!
-Unknown
A doctor would never schedule surgery without knowing needs of the patient.
One key service you can offer your customer is to insure the proper timing of her pricing process. That is, she should understand that most bids are only good for 30-60 days, and the pricing process belongs at the very tail-end of the buying process, not at the beginning or middle. You need to step up and assist her with this key information.
You may also offer to provide templates for a Request for Proposal cover letter and a detailed Generic Bid Specification (See "Building Trust, Growing Sales" Secret Weapons) so the customer will have an apples-to-apples comparison of the various options. If she balks, mention occasions where other customers tried to simply ask for bids and were burned by the chaos. In those instances the vendors played games, the customers did not get what they wanted and nobody won. For example, "You know, the CFO down the street just did what you are planning to do. After she received the three quotes, she spent hours on the weekend trying to compare the bids. It was a huge headache for her." Then offer a chaos-free example or two of how things worked out beautifully using your RFP and cover letter templates.
I hope this helps when you receive those calls from customers who want a bid immediately. All the best,
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"Trust is a peculiar resource, it is built rather than depleted by use."
-Unknown
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"If you don't know where you are going, you will probably end up somewhere else."
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" You will receive pressure to reduce your price when you have not sold:
- Yourself
- Your company
- Your solution"
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"There is a choice you have to make,"
in everything you do.
So keep in mind that in the end,
the choice you make,
makes you."
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The Sales Strategizer App
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Trust Triangle Selling Unveils The Sales Strategizer-Pro™, the First Deal-closing Application for the iPhone, iPad and iTouch.
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Dan's book won a Medal
from Sales Books Awards!
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For more information on Dan's book go here.
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