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Oct 1, 2012 12:00 AM
DO YOU KNOW WHAT YOUR QUOTE HIT RATIO IS? How many additional dollars for your company would a Quote Hit Ratio increase of 5% be? Wouldn’t that answer represent significant additional revenues without more sales calls, more customers, more sales reps, more estimators, and more quotes?
My observation is that only about 2% of the companies in our industry proactively manage a Quote Log. But those companies that do manage a Quote Log have a tool for generating more business at lower cost—something that gives them an edge that their competitors don’t have.
SEIZE THIS GOLDEN OPPORTUNITY
Every company has several fulcrum points that allow the company to leverage its revenues and margins— without doing anything of a proportional significant increase. Managing your quote log with your plant management, sales reps and estimators is an opportunity that should not be neglected.
Issues to address include (but are not necessarily limited to) the following:
1. All quote requests should show the date the project is expected to be awarded. This information is key because it should be entered into the quote log spreadsheet; it guides the follow-up by sales reps and production management for identifying projects that can “fill” the production schedule’s open slots.
2. Plant management should regularly check their production schedule and, where there are open schedules, review the quote log for projects that fit the department that has open time.
3. Sales reps’ responsibilities include creating opportunities and options for management to keep your plant running without destroying pricing discipline with key accounts. Sales reps are to call accounts before the award, confirm that their company is still being considered for the project, and ask, “Have the specifications, quantities and delivery dates changed?” Often, this information has been changed in some manner, and this call by the rep allows the rep to be the first to respond to an update of specs.
4. Negotiations should then ensue—often allowing the company to win work that might not have otherwise have been won if it weren’t for the supplier’s proactive call and negotiations.
When combined with customized quote letters, and even minor proposal elements, this proactive contact to “overworked and limited-time buyers” tends to noticeably increase the supplier’s Quote Hit Ratio by at least 5%. Really, if you increase your Quote Hit Ratio from 15% to 20%, you’ve really increased your Quote Hit Ratio 33% or more!
Additionally, Quote Logs should track where you’re not winning work and may have estimating standards that are “out of position” with your competitors—invaluable information for adding revenues as well as becoming the preferred supplier!
BE A WINNER
Transactional customer relationships are still an everyday part of doing business, and becoming the supplier who wins an increasing percentage of work allows that supplier to become the preferred supplier—no small accomplishment, as customers increasingly want fewer suppliers— that can improve what the customers receives for what they pay.
Sid Chadwick is President of Chadwick Consulting. Talk to Sid at B2MeMag.com/SC3