Things to consider before providing a pricing quote

Posted in Financial management.

Providing a pricing quote to an interested customer opens up a line of communication which can lead to future business interactions whether the quote is accepted or not. Therefore, quotes not only allow you to educate a customer about what you have to offer, but it also enables you to gauge what customers may need from you in future. Furthermore, it also teaches you where the most interest for your products lies.

However, there are certain things that you need to check before providing a pricing quote, namely the exact customer requirements, the type of customer, and if the client falls within your target market.

Clarify information

The first and most important thing is to make sure you know exactly what the customer requires from you. The best way to do this is to get a written request directly from the customer. This clarification is beneficial to you since it helps you to establish whether you can provide what they require.

If the request for a quote has been done via email, take the time to personally call the customer. They have already expressed an interest in your products so it won’t be a cold call. Write down what the customer says and repeat it back to them to ensure you haven’t left anything out.

Getting to the bottom of what a customer needs sometimes requires asking exploratory questions. What problem are they looking to solve? How do they think the problem should or could be solved? Why do they believe that your product(s) will solve the problem? Do they plan to approach any competitors or have they approached any yet?

Focus on the customer

Then, the type of customer you are talking to also makes a difference. Is the customer a decision-maker in their company? If they are not, it can take longer than normal to get a decision on whether to accept the quote. It can also mean that they have less insight into what their company truly needs. Therefore, ensuring that you talk to the right person can prevent embarrassing quoting errors from occurring.

Another important customer-related issue is checking whether they are in your target market. Are they the type of customer you would normally provide products to? If not, why are they coming to you for a pricing quote? If they are perhaps not in your target market, are you truly the company they need? Clear communication and advice on your part creates trust and can lead to this out-of-target-market customer becoming a regular client.

Ensure accuracy

Now that you’ve figured out what the customer wants and have received all of the details, it is time to move on to the quote itself. Ask yourself whether you can deliver the products within the correct time frame, in the right quantities, and at a competitive price. Don’t overestimate your ability to provide goods as this will reflect badly on you if the quote is accepted and you cannot meet the requirements. Plan to have the order ready several days in advance of the deadline you are quoting for.

When it comes to costs don’t just think about the cost of the products themselves. Take the following “hidden” costs into consideration as well:

*  Logistics of acquiring and storing products
*  Delivery costs
*  Packaging or wrapping materials
*  The amount of labor it takes to do the above

When all of the costs have been taken into account, think about whether the price you’ve come to is competitive. Research what your competitors will likely quote for the same request so that you will not be undercut and lose the potential business. It goes without saying that the price you quote must also be a profitable endeavor for you. If you are going to lose on the deal then it is probably not worth it, or you need to adjust the quote before handing it over the customer.

Lastly, make sure that you clearly state any limitations or conditions relating to the quote. For example, mention that the quote is only valid for a certain time period and thereafter the original request may not be fulfilled in the same manner or that the costs may change. This way the customer knows a decision must be made within a certain time period to get the same deal they were quoted. This disclaimer also insures you against possible unforeseen circumstances that may arise in the future and cause the original quote to change.
 

Not only can you electronically place orders on the Onsight mobile sales app but you can also provide your clients with on-the-spot pricing quotes. Quotes are completed by using pre-existing fields and simply selecting products directly from the electronic catalogue. Onsight’s quoting system is customisable to suit your unique needs and you can send clients all of the documents in a convenient PDF format via email.