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Thursday, 06 September 2018 08:25
Published in Experts at work

Preparing a quotation is like the tip of an iceberg - only about 15% of it is visible

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Have you seen the diagrams illustrating the actual size of an iceberg? Most of it is hidden below the water. Misjudgements can then be catastrophic - as we all know since watching the film about the Titanic or learning about the misfortune involved in the original event. In the following discussion, I would like to clarify the reason why I see parallels to quotation preparation in this respect.

Most companies underestimate the importance of quotation preparation

In my sales business background, I often experienced quotation preparation as a kind of ping-pong game between customer requirements, ranging from vague to specific, and proposed technical solutions. Several versions of a quotation were often needed before the proposed solution finally met the requirement. In addition, any external sales agency or dealer involved can either assist in specifying the need or extend the game by contributing a ‘silence post’ component. All in all, such a quotation process can be very lengthy, inefficient and exhausting for everyone involved.

A request signals interest and needs

Let's go back two steps: simply receiving a request is the product of effective marketing and sales activities! It demonstrates that the sender...
  • ...views your company in a positive manner
  • ...can imagine working with you
  • ...has a need and
  • ...would like to check whether you can find a technically and commercially attractive solution for its requirement.
Viewed in this manner, any request can be regarded as a potential prelude to an order - and thus deserves to be handled in a professional manner.

Basic requirements for a quotation

This professional approach is initially reflected in the quotation through its clearly perceptible professional and structured layout. Letters are appreciated when they have an individual, error-free salutation and contain all the references that facilitate the placement of an order. However, the focus should be on the comprehensibility of the technical elements and other details involved in the proposed solution, as well as its relation to the requirement. Besides informative texts, effective use of pictures, technical drawings, documentation or customer references is often very helpful. This package is completed by a price overview, information on availability, service options, commercial conditions and company terms and conditions.

Old wine in old bottles?

Admittedly, these elements are often very well known and should therefore have long been common practice. In everyday life, however, many of these points still leave room for varied degrees of improvement. A comprehensible specification is particularly important where increasingly complex products and supply levels are involved. Lack of clarity will at best lead to many questions and thus loss of time or, in the worst case scenario, give rise to speculation and pessimism about your capacity to find solutions.
A quick check could therefore be undertaken by asking yourself how satisfied you are with your quotations. Are they convincing and effective in obtaining orders?

Quotation preparation viewed from the sales perspective - or: gaining command over the visible 15%

eisberg abteilungen en webA convincing quotation that is precisely tailored to the interested party enables you to signal a performance commitment. To ensure that this does not turn out to be ‘empty’ in the event of an order, it is particularly important to avoid any technical and commercial errors in the quotation phase. The quotation document is therefore only the visible tip of the iceberg. Underlying it is a much larger, invisible part in the form of precisely coordinated, closely interlinked corporate processes, extending from production through payment flows to after-sales service.

Even this short list illustrates the reach that quotation preparation has over the entire performance process. Fortunately, this holistic view is increasingly gaining ground, and more and more companies are identifying potential ways to optimise their quotation process in ways that go far beyond sales.

I look forward to sharing experiences with you!

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Tim Pieper

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