Whether you are a small VAR or a large enterprise VAR, if you want to let a lead or an opportunity know the cost of goods or services they’re interested in, you will need to send them a sales quotation to base their decision on.
The sales quotation you send will make or break the deal. To make a great first impression and get the ball rolling your sales quotation needs to be well written, accurate and professional.
It also needs to offer great prices in comparison to your competitors and protect your business from risk. You also need to respond quickly so the potential customer does not get impatient and search elsewhere.
Developing quoting skills will help you create professional quotes quickly and help you respond to leads within a few hours.
Remember, customers tend to shop around and get at least 3 quotations before making a decision, how do you then differentiate yourself?
Before we get into the details of what goes into creating a winning quote, let’s clear some common terminologies.
- What is a Sales Quotation?
- How is a sales quotation different from a proposal?
- The difference between a quote and an estimate
- How is a sales quotation different from an invoice?
- Components of a Successful Sales Quotation
- Structure Your Sales Quote Well
- The 3 Most Important Check Points Before You Create a Sales Quotation
- Manual Quotation Process? Stop Now!
- Software Tools to Create Sales Quotes Easily
- VARStreet – The Best Sales Quotation Tool for VARs
What is a Sales Quotation?
A sales quote (or quotation) is a document, which at its most basic, contains:
- The requested goods or services.
It is provided as a response to an RFP or an inquiry or interest shown by potential customers in the goods or services sold by your VAR business.
How is a sales quotation different from a proposal?
While both sales quotations and proposals are documents that offer goods or services to your prospect, there is one difference between them. A quote contains information on the ‘what’, ‘how many’, ‘how much’ and ‘when’; while a proposal is more detailed and answers the additional question, ‘how’.
You will need to show a complete understanding of the prospect’s problem and offer a comprehensive solution. A proposal is a more detailed document that should address the ‘HOW’ question. You’ll need to demonstrate a full understanding of the prospect’s existing problem and offer a specific solution, standard terms and conditions and clauses which govern the quote.
The difference between a quote and an estimate
A sales quote contains the exact pricing details, whereas an estimate is a rough idea or an approximation of the cost of the product or service.
Once a quote is accepted by the prospect, whether through email confirmation or by signing the quotation, it becomes a legally binding document.
An estimate is not a legal document as it does not state final prices.
How is a sales quotation different from an invoice?
Let’s understand the workflow here to clear these concepts.
The seller sends the quote to a prospect, the prospect accepts or approves the quote, upon which the seller confirms the quotation and a sales order is created.
The seller then fulfils the order and sends an invoice to the customer. An invoice is a request for payment sent by the seller to the customer and is non-negotiable.
Components of a Successful Sales Quotation
The objective of sending a sales quotation is to persuade your prospect to choose your offer over others and finalize the deal. It is important to consider the requirements of your prospect before structuring the quote and to personalize it.
Sales quotation tools like VARStreet offer a range of templates to help you structure your sales quote correctly without missing any critical component.
A quick checklist of crucial components of a professional sales quote:
- your company’s logo
- your company’s name
- your company’s address
- contact numbers
- the client’s name or the company’s name
- their address
- contact numbers
- The date of issue and validity period – quote prices are subject to change if the quote is not accepted within a certain time.
- A quote number – this is usually auto-generated by your sales quoting software and helps you easily track the quote for future reference.
If your company uses accounting software, then it will automatically generate a unique number for your quote. If you do not use any such software, you can manually assign your quote a specific number. This will help you easily track and locate the quote in the future for reference.
- Products or services the prospect is interested in.
This is an important section of the quote as it contains the products and services your prospect is interested in. List all the details like the product name, product category, quantity and prices correctly and provide as much information as you can to help them get a clearer picture of your offer and make an informed decision.
- Pricing structure
The pricing structure should be clear and transparent without any room for confusion. These details will become the norm for future payments if the prospect accepts the sales quotation. Explain how different scenarios or variations will affect the cost: for example, with or without installation.
Mention all applicable taxes, costs, shipping, handling, etc. that will be added to the invoice to avoid any future disagreements between you and your potential customer.
- Terms and conditions
Lay down all the terms and conditions that will govern the agreement. What happens in the eventuality of returns, late deliveries, after-sales support, etc.
Also mention the duration of the contract, payment terms, and any other conditions peculiar to your business.
- The signatures
Signatures from both the seller and the buyer act as a confirmation of the quote in its entirety. VARStreet offers eSignature options to accelerate the approvals of quotes and turnaround times.
- Upsell and cross-sell suggestions
While the above components are mandatory for a hassle-free business relationship, adding upsell or cross-sell suggestions is optional. But you can add these suggestions to let the customer know of other related goods or services you offer.
Structure Your Sales Quote Well
It is not enough to know the components or the structure of a quote. You should also know where each component goes and how to enhance your quotes.
1. Stick to the proper structure
The quote should be structured in an easy to read format.
This is a standard layout for sales quotations that you should follow:
- Quotation header — This should hold your company’s name, contacts, tax registration number, quotation number and date, payment terms, and the name of the recipient.
- Quotation body — Contains the proposed goods or services and pricing information.
- Quotation footer — The total amount of all items, tax amount, and validity of the quote. Include a call-to-action such as their signature.
2. Add rich content
Words are sometimes not enough to help describe your products. Add rich content like high-quality images from multiple angles or videos to help prospects visualize the products. This will also give you an edge over others and help you stand out.
VARStreet’s sales quotation software comes with free rich content from top rich content providers like Etilize and IceCat.
3. Brand your quotes
Add your company’s branding like logo, fonts, colors, etc., to build a strong brand presence. Your quote template should be unique and stand out from the other quotations your prospect receives. Create a strong recall through branding.
If you’re worried about creating a template, VARStreet comes with pre-designed quote templates that are highly customizable to your brand needs, and the needs of your customers.
4. Use quote-to-cash software
A quote-to-cash software not only enables a prospect to accept and sign a quote, but the integrations available allow them to also pay immediately upon approving the quote.
This process is fast and a convenient way to conduct business with new customers.
The 3 Most Important Check Points Before You Create a Sales Quotation
All the components above will make your sales quote appear professional and reinforce the branding of your company. But what is it that will make you hit the nail right on the head?
These are the 3 top things you must do before you quote:
Tip 1 – Clarify information
Before you start, make sure you know exactly what the customer wants. If you get a written request from the prospect, even better as it will help you establish if you are in a position to fulfil their requirements.
If the prospect has emailed you their RFQ, call the customer and ask them if you understood their requirements correctly. They will not be annoyed, instead it shows that you value their request and want to serve them to the best of your ability.
Make notes of everything the prospect says, ask questions to know what problem they are trying to solve with a particular product. Do you have a better solution? Talk to them about it.
Tip 2 – Focus on the customer
Try to gauge if the person you are talking to is the decision-maker. If they are not, the turnaround time might be slightly longer, and it could also mean they do not have all the information you need to find the right solutions for them. Talking to the right person saves time and eliminates the risks of errors in quoting.
It also allows you to understand the customer better and find what they are looking for. You can also know if they are in your target market, if not, what has brought them to you? Where did they hear about you? Are you really the company they need?
Clear communication with your prospects will create trust, build rapport, and the prospect will remember you as a company that took the time to understand their needs and tailor a quote accordingly.
Tip 3 – Ensure accuracy
Once you’ve figured out what the customer wants, ask yourself if you can truly meet their requirements. Can you deliver the products within the timelines, in the expected quantities and at a competitive price?
Do not overestimate your ability to meet the prospect’s demands, or you will end up overpromising, and eventually hamper your company image if they accept the quote, and you cannot deliver.
When quoting prices, do not just think about the cost of the products themselves. Consider all the costs that will affect your bottom line. For example, the logistics of acquiring the products, delivery and shipping costs, packaging and handling, labor, etc.
Only once you have taken all these costs into account, rethink the quoted price to see if it is competitive, at the same time profitable to you.
Lastly, make sure that you clearly state any limitations or terms and conditions relating to the quote. For example, state clearly that the quote is only valid for a certain period, and thereafter, the original request may not be fulfilled at the same price. This acts as a way to persuade the prospect to make a quick decision.
Manual Quotation Process? Stop Now!
Are you still creating sales quotations manually? You are missing out on the many benefits of a sales quotation tool. Cloud-based software solutions are available for sales quoting, and these align all your teams and processes.
Here are some challenges you will face with manual quoting:
Without a sales quoting tool, your teams will spend a lot of time creating and managing multiple quotes. This takes away time from the actual sales process.
The lack of a predefined quotation format can lead to inconsistent quotes and affect your brand’s image.
- No version control
This is a huge drawback as you will have no version control, and it will be challenging to keep track of different versions of a quote.
- No track of the quotations
Multiple quotes are created and exchanged between the sales team regularly. Manual quotes make it very difficult to track and keep up with processes like approvals, signatures, etc.
- No accessibility
A manual quote is not easily available to various team members. Sales teams cannot easily access quotes created by one member on their individual computers.
- Lack of integration between platforms
Modern businesses use multiple software tools like ERP, CRM, eCommerce, accounting software, etc. Manual sales quotes cannot be integrated with any other system resulting in additional data entry work and increased room for error and data duplication.
Software Tools to Create Sales Quotes Easily
A successful business is all about adapting to the changes in the world, the market, technologies and customer expectations. Manual processes reduce productivity and eventually affect the growth of a business.
There are many software tools available to automate sales quoting.
Sales quoting software
Sales quoting software today are mostly all cloud-hosted solutions that are quick and easy to implement. A sales quoting software like VARStreet helps you automate data entry, price calculations, add approval workflows, create bundles and a lot more.
It enables you to automate mundane tasks and gives your sales teams a lot more time to focus on relationship building with prospects.
Here are some more features of an ideal sales quoting software:
- Ready quote templates with a rich editor to customize the quote;
- seamless collaboration with internal and external sales reps;
- ready integrations with multiple software tools like CRM, ERP, accounting software, etc;
- eSignature integrations.
A configure, price and quote(CPQ) software allows you to create complex and highly configured quotes with complicated offering and pricing plans.
Here are some features that the best CPQ would offer:
- Product configurator and robust catalog management;
- supports a variety of user pricing plans, contract catalogs, customer plans, etc.;
- approval workflow capabilities;
- in-depth analytics and reports.
VARStreet – The Best Sales Quotation Tool for VARs
Here are some features of VARStreet’s quotation tool that optimize your quoting process:
- A vast library of pre-designed yet highly customizable sales quote templates your sales team can use to create professional quotes.
- Distributor integrations with over 45 IT and office supply distributors like Ingram Micro, Synnex, Tech Data and many more.
- A product catalog of over 7 million SKUs with real-time price and inventory. Easily search and add products to quotations with accurate price information on hand.
- FREE rich content from top rich content providers like Etilize and IceCat, content for HP products through the HP Content Syndication Program, and content from multiple distributors.
- Complex quoting features like approval workflows, bundles, upsell and cross sell, etc.
- Efficient order processing, procurement and sourcing.
- In-built integrations with popular software applications like HubSpot, Zoho, Quickbooks, AutoTask, PeopleSoft, MS Dynamics and many more to automate tasks and enjoy data exchange without any hiccups.
- PunchOut integrations with widely used eProcurement tools like Ariba, J.D. Edwards, Jaggaer, Workday, etc.
- Integrations with payment gateways, shipping companies and tax integrations to auto-calculate additional charges and add to the quote.
- eSignature integrations with software like DocuSign.
- Mobile sales quoting application to help you create quotes on the go!
We hope that after reading about the many benefits that a sales quotation tool offers your business, you would consider making the switch from manual quoting to specialist quoting software.
Let us know if you have recently invested in a sales quoting application and how you think it has affected your sales quoting process.