What is quotation management?
Quotation management refers to the whole quotation process, from start to finish. This includes when you first receive a Request for Quotation (RFQ), to creating a quotation, responding to buyer questions and negotiating the quote, and closing the deal.
Quotations are key for building new business relationships, as they are often your first interaction with a prospective buyer. As a result, it is important that you manage the quotation process efficiently and professionally, in order to maximize your chances of receiving an order.
4 steps to quotation management
Thorough research into the company and their needs should be conducted before a quotation is given, so that you are able to recommend the most appropriate product. This will demonstrate your understanding of the industry, and increase trust in the buyer for your services.
- Step 2: Quotation creation
When creating a quotation for a buyer you must ensure that all necessary information is included and that the quotation format meets a high standard. Necessary information includes a detailed description of the product, and an explanation of the payment terms. For more information on how to create a quotation, please see the following blog post: “High-quality quotations.”
It is important that you respond in a timely manner to any follow-up communications from the buyer. They may need clarification, or wish to negotiate a specific term. Timely responses show the buyer that you are a professional supplier, and that you value the opportunity to work with them.
If a buyer accepts your quotation make sure to get their written confirmation or have them sign a contract before beginning any work. In addition, make sure that any changes to the original quotation are captured in writing before work is begun in order to avoid any misunderstandings.
Why buyers might not respond to your quotation
There are several key reasons why buyers may not be responding to your quotations.
The first of these is that the delivery time is too long. If the buyer has to meet certain deadlines, such as providing stock for a specific holiday, and your deadline goes beyond that date, then buyers will not be able to use your services. Moreover, if your delivery time is significantly longer than the time quoted by your competitors, then the buyer is likely to go with them out of convenience.
The second reason why buyers may not be responding to your quotations is that you do not have any flexibility with your requirements. For example, if you are not able to customize the product to the buyer’s needs, then they will go with another supplier, who is able to change product specifications.
Thirdly, if you have limited experience then buyers may doubt your ability to create their product or meet the production scale or timeline that they require. If this is the case, you may need to start out by fielding smaller orders, that only need minimal adjustments, before moving on to larger orders and complete product customization.
The final reason why buyers may not be responding to your quotation is that you do not offer after-sales services. It’s important for buyers to know that if they have any issues with their product that you will provide support and help them to resolve it. This may include setting up machinery or fixing broken items.
Ways to maximize buyer conversion
If your quotation is declined by a buyer it is important to reach out and ask them to provide you with feedback. It may be that they simply decided not to move forward with any supplier at this point, or they may have gone with one of your competitors. If this is the case, it’s crucial for you to find out what attracted them to your competitor, so that you can see what you can improve on or what you need to be able to offer in the future.
As mentioned previously, it is important that before creating your quotation you conduct research into the buyer in order to fully understand their needs. It is also important to format your quotation in a professional manner and include all necessary information for the buyer to make an informed decision. If these two points are met, then you will provide the buyer with a high-quality quotation, improving your chances of converting them from an interested party to your customer.
Quotation management is an important part of getting new orders and expanding your business. It is important that you approach it seriously and provide your prospective buyer with a professional and value-adding experience with your company. In order to achieve this, on receiving an RFQ you must conduct further research into the buyer and their needs, create a thorough quotation, and manage any follow up communications efficiently. By following these steps, you maximize your chances of closing the deal with the buyer. However, if this is not the case, then it is important to ask for feedback so that you can understand what you need to change or improve on in the future.