The phone rings. It's a new customer you have never met saying, "I need a quote tomorrow morning on your highest-quality product. Can you get that to me?" How do you respond?
Let's consider two options a rep can take:
Option A, "The Special Assignment Option".
Rep "A" will rush back to her office, yell for her specialist and burn the midnight oil churning out a fifty-five page response. She may toss in a brochure, include a national discount, mail it to the customer and cross her fingers. Isn't this what a typical/average rep does? In the workshops I conduct I call this the "Special Assignment" option which is a euphemism for a rep in a precarious employment position.
My advice to Rep "A" is, "Don't be a quote machine." Special Assignment reps seem to adhere to the motto: "When in doubt, quote!" Most companies do a great job teaching reps their administrative duties, namely, how to produce bids. They generally don't do a very good job teaching high-quality consultative and strategic selling skills. Speaking from experience, after my initial sales training I could churn out bids better than anybody. The quotes were usually numbered with a letter suffix. I would start out with "A", and the quote would get altered so many times that if I was lucky enough to get the sale, the final quote would end in "Z". It was of no value to quote this way.
Ultimately you will probably have to generate quotes, but it should be at the end of your sales process. In fact, you should adopt the mindset that you will "never" quote. Instead, as a courtesy to the customer who is trying to put together a budget, you can provide budgetary letters and use the opportunity to act as a consultant to your customer. Of course, you will have to provide a detailed quote eventually, so the "never" isn't etched in stone. Nonetheless, you want to put it off as long as possible.
A superstar knows it is never in her best interest to provide formal pricing early in the game. Rather, her goal in pricing is to delay for as long as possible. Rep "B" understands that providing a formal price one week into a seven-month buying process is futile. After all, at that point it is unlikely that she knows exactly what the customer needs or whether in fact her solution is the right one.
Let's assume that you do understand your customer's needs and believe that your solution is right for your customer. Even so, if you provide detailed formal pricing now, in months 5, 6, and 7 you will have to provide pricing again in response to additional customer requests. At that point you will be competing against yourself and your prior pricing bids.
Option B: The Superstar Approach
When faced with the "give me a quote" customer demand, Rep "B" asks herself: "Why do my customers need this quote and where are they in their buying process timeline?" Then she says to her customer: "Sure! Happy to assist. Can you share with me why you need a price quote now, and where are you in your overall process of evaluating potential solutions?"
The two most logical responses from the customer would be:
1. "I need a formal quote for the budget",
or:
2. "We want to look at pricing and your competitor has given us a formal bid."
Let's take a look at how you would address each response:
1. Budget Response:
You are on the left side of the Trust Triangle. Your goal is to gain trust, NOT to dump a formal pricing contract on them. You should use a delay strategy to position yourself as a true consultant by creating and driving a formal pricing process.
How do you delay providing formal final pricing?
Position a "formal budgetary price letter quote" (at list price with all options) in lieu of a formal quote. Provide the customer with reasons why providing formal pricing now is not in her best interests.
- A quote is a formal contract with legal implications and is only valid for 60 days. "Ms. Customer, there are legal repercussions. A quote is a formal legal document valid for only 60 days. Our respective lawyers would have to review it. Are you at that stage?"
- Providing a formal budgetary price letter quote prevents the budget shortfall headache. This is the headache you will cause your customer to endure if you provide formal discounted pricing now only to find out that it's not enough to cover their desired solution in the future. Perhaps the future will bring budget cuts, potential price increases, new product updates or unanticipated options. "Ms. Customer, you have not finalized your exact solution and required options. If you take a formal bid to your CFO now, you'll be stuck with that number. Given potential price changes, new product announcements and budget cuts, you may be unable to obtain your preferred solution with the options you desire."
While deferring a formal quote at this point, the superstar begins positioning her ability to assist the customer with a formal pricing process which she will need to solicit price quotes from all vendors.
2. Time To Get Formal Pricing:
If you customer states that it is time to get formal pricing you can respond by stating: "I'm happy to provide the pricing you are requesting. In order to provide a solution that will meet your needs both today and in the future, I must first understand your project timetable, your business (if you don't already know it), your short and long-term challenges, opportunities, goals and objectives. Without that information, I cannot prescribe a mutually beneficial solution that will meet your needs today and into the future."
The superstar knows that providing formal pricing without this key background data would be like making an appointment with a doctor and greeting her by stating, "I want surgery. When can it be scheduled?"
Serve As A True Consultant: Drive A Formal Pricing Process:
Significantly, the superstar will use this customer request as an "STP", or a Superstar Turning Point - a chance to distinguish yourself as a true consultant. A superstar is always looking to help her customer avoid headaches. For example: bids are not apples to apples, bids arrive from different vendors weeks apart, bids arrive months before a decision is made, bids do not include key options, the solution does not meet future needs, etc.
You must help your customer avoid difficulties by helping her establish a fair and formal bidding process. This way you begin to enhance credibility and position yourself as a consultant and trusted advisor. You may say, "Ms. Customer, sounds like you need pricing from all the vendors you are currently considering. Let me say, respectfully, that I think you will bring on a major migraine if you request quotes from vendors without an established bidding process. I can help you avoid that headache."
One key service you can offer your customer is to insure the proper timing of her pricing process. That is, she should understand that most bids are only good for 30-60 days, and the pricing process belongs at the very tail-end of the buying process, not at the beginning or middle. You need to step up and assist her with this key information.
You may also offer to provide templates for a Request for Proposal cover letter and a detailed Generic Bid Specification (See Building Trust, Growing Sales Secret Weapons) so the customer will have an apples-to-apples comparison of the various options. If she balks, mention occasions where other customers tried to simply ask for bids and were burned by the chaos. In those instances the vendors played games, the customers did not get what they wanted and nobody won. For example, "You know, the CFO down the street just did what you are planning to do. After she received the three quotes, she spent hours on the weekend trying to compare the bids. It was a huge headache for her." Then offer a chaos-free example or two of how things worked out beautifully using your RFP and cover letter templates.
Maura, I hope this helps when you receive those calls from customers who want a bid immediately.
Good luck, and Close 'Em.
About
the Author:
Daniel Adams, author of Building Trust, Growing Sales,
and creator of Trust Triangle Selling™ helps corporations
improve their profits by optimizing the performance of their sales
teams. He is a frequent and popular speaker at national sales
meetings, workshops and association events. You can visit his
web site and read his other articles at www.trusttriangleselling.com.
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