What should a price quote look like?

What should a price quote look like?

You’ve probably received several price quotes in your life as a customer and you eventually converted some of them into an order. Now, you find yourself on the opposite side. Now, you’re the one creating a quote for your customer and of course, you’re trying to win. Why win? Because submitting a price quote is like entering a small competition. We can almost certainly assume that a potential customer didn’t inquire exclusively with us. If he had, we’d probably be talking about orders, invoicing, warehouse expense, and other interesting topics. Making a price quote is a competition. And you want to win it. Imagine a scenario where a customer wants to buy a brick pool. It’s clear that if he’s not truly technically savvy, he’ll order a company to do it. And it’s also clear that unless he has a strong preference in advance, e.g., based on the experience of a friend or someone he trusts, he’s most likely to inquire with several companies, not just one. And this is our competition we want to win. Sure, sometimes it’s better to quit the fight and leave the bidding to the competition, but that’s a topic I’ll cover in a separate article.

1. Get the input you need

Never underestimate this phase. The better you are in your field, the better questions you can ask the customer and, of course, advise him on a suitable solution. Until you have a clear vision of what the customer needs, there’s no point in making an offer. Then, you will needlessly create a quote that follows your vision but won’t meet the customer’s demands. Getting to know the customer and his ideas will help you choose the right combination of your products and price.

2. Remember that the reality may differ from the price quote

You can quote your estimate, but the reality may vary. For example, it’s assumed that you’ll need a 10m cable for the implementation, but during the assembly itself, it will turn out that you needed 20m. Don’t forget to add the quoted details of such variable items as merely indicative and your customer should be informed that the real quantity will become apparent during the installation process or upon the further specification of your price quote. Remember that what you quote to the customer isn’t set in stone, but at the same time, every change must be clear to the customer for you to be considered a trusted supplier.

3. Divide your quote into logical segments

If you’re creating a longer price quote including several logical segments, don’t put them all into a long list. If your customer finds the offer confusing, the chances of him asking about further details are slim. He’s more likely to go with another supplier. If you divide the quote into smaller sections, you’ll significantly ease your customer’s understanding of the pricing, helping him navigate through it. Add Note and Summary functions in ProfiQuote are made exactly for this step.

4. Price first

Let’s face it – even if the price is listed at the bottom of your quotation, it’s the first thing the customer’s going to be looking for. It’s quite logical, despite our efforts to list the price as just another item on the quote, the customer will always understand it as the very first information based on which he’ll decide whether to bother with the rest of the quote. Choosing the right price is an art. In no case should you attempt to hide it from your customer, if he can’t find it, he won’t pay any further attention to the offer.

5. A picture says more than a thousand words

It’s better to see something once than to hear about it a thousand times. This applies to your quotes as well. If your customer isn’t in his element in your field, the itemized articles won’t speak to him. Adding a picture next to each item will be extremely helpful.

6. Calculate your gross profit

Each item has a selling price and a purchase price. However, some costs aren’t billed as a sales item to the customer. For these, you can use an Item cost function. They may include the hours and fuel cost relevant to the given quote – you met with the customer and dedicated x amount of hours to prepare a suitable solution. When you negotiate your price, you’ll have a much better idea of whether it’s worth winning such a bid.

7. The form of the quote speaks to your professionality

If your offer is a single-line email and your competitor quotes an attractive, detailed quote including pictures, you won’t be in the same boat in the eyes of a customer. If you send him a nice price quote, you’ll look much more professional in his eyes.

8. Customer communication is the key

Submitting a price quote and not following up on the customer’s feedback is a waste of your time. You didn’t even have to make that quote. You can have a fantastic product with a minimal competition or product exclusivity, so the customer has no other option but to buy from you. In real life though, if you don’t show the initiative to win, you’ll lose.

9. Never edit the same quote

It’s quite common that the customer demands editing of a specific quote regarding the products, discount, quantity, etc. If you keep editing the same quotation, you’ll lose track of the version your customer’s considering. In this case, I recommend you create a copy of the offer and change the status of the old one with a function Replaced by.

10. Evaluation of the price quote

It’s a very important part of the entire business cycle. It’s necessary to evaluate how the quote turned out. It will help you work more efficiently on your next offers. Ideally, you should compare the received order with the price quote, or evaluate the entire business case based on the accepted and issued invoices.

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