Manufacturing Solutions: Best Practices to Create Effective Price Quotations
Among the many manufacturing solutions and software you may have looked into, one thing that may be lacking is the ability to fine-tune price quotations. The quotation process is one in which many manufacturers leave money on the table. Learning best practices around the quotation process can help you improve your ratio of quotes to closed sales and even more importantly, improve your bottom line.
Mindover Software offers a free recorded webinar to help you improve your sales team’s quotation process. In this recorded webinar, Jim Barnet from Promys and Lloyd Smith from Mindover Software share three sales quoting best practices to change your sales team for the better.
Promys is professional service automation software that can help your project management. When you improve your ability to manage projects, you can improve your company’s profitability, too. To learn more, contact Mindover Software.
Tip #1: Have a Spec Sheet Handy
A blank spec sheet can help you sales team record the project requirements during discussions with the client. The initial specs can then be used to create a quotation. When specs are in writing, there’s less room for error. Changes to the specs can be managed and documented, with corresponding price quote changes cross-references with the spec sheets. A blank spec sheet that includes fields for commonly needed information is a simple way to improve the quotation process by ensuring that accurate information going into the system results in accurate quotations going out to customers.
Tip #2: Avoid Ambiguity
Sometimes it is hard to get customers to focus on precisely what they want. Try to avoid ambiguity. List as many specifics as you can on the spec sheet and ask probing, open-ended questions to allow customers to open up and explain what they mean. Ambiguous information leads to poor price quotes.
Tip #3: Use an RFQ
RFQ stands for “request for quotation.” It is a standard method used by companies to ensure that the quotes they receive from multiple vendors contain identical information so that they can weigh prices, experience, and other factors. Most RFQs are documents that list the scope of the project, the due date, and specifics on how the customers wish the product fabricated. One document is circulated, and multiple companies use the same requirements doc to submit quotations or bids.
Using an RFP offers several advantages to both your company and to the customer. Your company can focus on accurate prices with an emphasis on other factors that distinguish your business from the competitors. For the customer, the RFQ ensures that all of the vendors they contact for an estimate are using the exact same information to provide an estimate. It reduces variables that can lead to mistakes in the estimation and quotation process.
Watch for These Problematic Areas in the Bidding Process
Certain areas of the bidding process may be more prone to errors and mistakes than others. The Bill of Materials (BOM) may include inaccuracies that should be corrected before using it for quotations. If you use an automated BOM, check it in your system. This is especially true if the BOM hasn’t been updated in some time.
If your process includes custom prototypes, unique or project-specific tooling or machining, or other items not included in your traditional services, make sure these are listed. Depending on the job, they may add up to a significant amount that you should be charging extra. Neglecting to add it to the quote just means leaving money behind.
With these tips, you can improve your quotation process so that you’re offering customers the best value at the lowest price. It’s a win-win for both manufacturers and customers.
Don’t forget to view the recorded webinar for more information on improving the quotation process.
Mindover Software provides business software and solutions to companies big and small. We welcome your inquiry and can assist you with your ERP, BI, and warehouse management software needs. Project management software such as Promys is also available to help you improve every aspect of your business. Contact us for more information.