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ARE YOU READY TO RAISE YOUR REVENUES BY AS MUCH AS 5%?

Oct 1, 2012 12:00 AM


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 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