What should a price quote look like?
You've probably received several price quotes in your life as a customer and have chosen the one or several of them which you eventually converted into an order. Now, you find yourself on the opposite side. Now, you're the one creating a price quote for your customer and of course, you're trying to win. Why win? Because offering a price is like 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 expenses, 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 tech-savvy, he'll hire 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. Of course, sometimes it's better to quit the fight and leave the bidding to the competition, but that's the topic of a separate post.
1. Get the input you need
Never underestimate this phase. The better you are in your sphere, the more relevant 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 price quote that follows your vision but doesn'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 reality may differ from the price quote
You can quote your estimate, but the reality may differ. For example, it's assumed that you'll need a 10m cable for the implementation, but during the assembly it may turn out that you needed 20m. Don't forget to add that quoted details of such variable items are merely indicative, and your customer should be informed that the real quantity will become evident only during the installation or upon the further specification of your price quote. Remember that what you offer to the customer isn't set in stone, but at the same time, every change must be clear to the customer, and you would thus be considered a trustworthy supplier.
3. Divide your price quote into logical segments
If you're creating extensive 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 his 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. For that purpose use the item types New section / note and Subtotal in Offeris.
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 will be looking for. It's quite logical, despite our efforts to list the price just as another item of the price quote, the customer will always consider it as the very first information based on which he'll decide whether to bother with the rest of the price 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 thousand times. This is true about your price quote as well. When you give your customer a list of items from the sphere he is not an expert in, that 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 sales 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. It may include the hours and fuel cost relevant to the given price quote - e.g. 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 price quote speaks about your professionalism
If your price quote looks like a single-line e-mail and your competitor submits an attractive, detailed price 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 to him.
8. Communication with customer is the key
Submitting a price quote and not following up the customer's feedback is a waste of your time. You needn't even have submitted 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 price quote
It's quite common that the customer demands editing a specific price quote regarding the products, discount, quantity, etc. If you keep editing the same quotation, you'll lose track of the version your customer is considering. In this case, we recommend you to create a copy of the price quote and change the status of the old one by using the function Replaced by.
10. Evaluation of the price quote
Very important part of the entire business process. It's definetely necessary to evaluate how the price quote ended up. It will help you to work more efficiently on your next offers. Ideally, you should compare the sales order with the price quote, or evaluate the entire business case based on the received and issued invoices.