Business owners, are you focusing on right channels that deliver higher conversion rates?
Well, in the efforts to get new customers, ‘significant leveraging opportunities’ that are present in the existing marketing activities are often neglected and overlooked by the majority of business owners. Small businesses often win work by using sales quotation. However, the importance of sales quote creation is usually ignored. Many business owners don’t understand the importance of how the quote is created and how it is prepared; and this can cost them business. However, those who get on top of the quoting process are likely to enjoy the manifold benefits including improved acceptance rate and improved cash flow.
Certainly, optimizing your current efforts in an effective way can make a real difference. When a customer asks you for a quote, it is an opportunity for you. Quick and correct response can make you close the deal promptly and win new business.
Table of Contents
Here are some tips to help you create sales quotation that get approved
1. User-friendly Quote
A business quote is the first impression of your business that you present to your prospective customers. Your sales quotation should give a quick idea about your business to the customer. It is going to represent your business image. So, making it crisp, to the point, a user friendly yet effective quotation is a crucial aspect to increase sales quote conversion rates.
It should feature costs, expenses, and services as well as terms and conditions in ‘easy to understand’ language. Maintain the look and feel wise uniformity to avoid confusion. A simple and clear quote should feature a CTA (call to action) at the end. You want your prospect to take action. Such user friendly yet impressive sales quotes certainly increase the chances of sales quote approval and eliminates the back and forth efforts.
2. Types of quotation in business: A quote v/s estimate
Should you workout estimates or send quotes? What’s the difference between quotes and estimates? Are you going to estimate the cost of all work or offer a fixed quotation for the cost of the work? Most of the people think/use these two words synonymously. However, each of them has a distinct meaning, uses and benefits. It is essential to understand the difference between quotes and estimates and use the right one at the right time to make sure you provide all the necessary and needed information.
- An estimate is a rough work or educated guess based on what a work may cost. Estimates can change considerably when you get further details about the work or scope of work. It gives the customer a thought of what the work may cost, yet there’s no assurance that the cost won’t change when the work is done. Estimates should be used as an initial guide price only.
- On the other hand, a quote (or quotation) is a clear cost/ exact price for the work being offered. It means the cost is fixed and cannot be modified once it has been accepted by the customer (except the customer alters the type of work or amount needed or you find something absolutely outside of the work scope of what was decided).
Understandably quotes are only issued where you are certain that you have thoughtfully and precisely established what is required. The important point to consider here is that quotes are presented formally and signify a contract between you and the customer and they can be used as legal standpoints for price in case of a dispute.
- Do make sure that the customer clearly knows whether they are getting a quote or an estimate.
- Don’t label a written estimate as a ‘Quote’.
3. Price makes the decision
As a price quote is legally binding, you need to be keen about each quote you send. Let us have a look at some points that can help you in this regards:
- Understand the requirements clearly: You need to know precisely what’s involved. Clarify all the doubts you have about the work. This will help to price it correctly.
- Timeline: There is no point in committing anything beyond your scope. If the work is to be completed in a particular timeline, before committing anything, check the resources you have or whether you need to hire temporary workers. You will need to consider price and timeline accordingly.
- Up-to-date prices: Consider fixed and variable costs. Keep in mind factors like currency exchange rates can and do vary and this might influence your prices, so take everything into account.
- Profit margin: The main purpose of your business is to make money. So you need to include a sensible profit margin while preparing quotes.
Remember, pricing is the prime aspect that plays a crucial role in decision making. So, you need to invest time in considering this aspect.
4. What to include on your sales quotes?
A good sales quotation should include every detail relevant to the service or work you’re planning to offer. Comprehensive, accurate, yet brief quotes that feature everything your customer needs certainly spell winning chances. Here are some points that your quotes should feature:
- Standard business information
- Accurate Pricing details
- Any applicable taxes
- A timeline/timetable/Due dates of the work.
- Payment terms
- A ‘valid until’ date
- Your terms and conditions (T&Cs)
- Space for your signature and the customer to sign too.
Presentation is an imperative aspect. You can use sales quoting software to prepare professional quotes with all the required information.
5. Clear Quote, Discounts
Clearly mentioned discounts, offers or any other promotional benefits, is one of the sales quotation best practices to increase the chances of winning the deal. As money is a prime consideration, highlighting the factors that portray the idea of saving money helps grab attention.
Effective quotes spell opportunities to win new business. Here are some quick sales quotes tips to increase win-win chances:
- Properly constructed quotes make a good impression.
- Adding a bit more value than your customer expects is surely a smart idea.
- Prompt response- Get your customers quickly to reinforce their decision.
- Follow up is must: Show that you’re keen about opportunities and this increases your chances to win the deal.
- Rejected quotes should be your guide to improve your sales and quoting processes. Finding out the reasons for disapproval and learning from mistakes is a stepping stone to success.
It’s a bit tricky to make sales quotes work for you. However, with the right approach and the right tools you can get to the top of it. Learning from mistakes and improving your sales quotes from experience will let you pitch your services effectively.