I have asked for countless quotations in my life time. I am certain that I am going to ask for many more in the future. The businesses I have asked for quotations from are as wide and varied as the stars. Some of my requests have been genuine and others just to settle my curiosity. Occasionally, I have been frustrated by a business that either denied my request or the person writing it sulked when they did so. I never quite understood why anyone would not want to give me a quotation, why on earth do they have a quotation book then? Like I said, I never quite understood until now.
People use quotations for different reasons, but one of the most common is to make a final decision, whether to acquire a product or service based on price. On the other hand, a business hopes that the quotation would translate into future business. So with my start-up I have found myself at the other end of the table, giving out quotations either via email or phone. For the past three months, I have been dishing out quite a lot of quotations without reasonable translation into business. I do not know what research says about the conversion rate of quotations, but I am guessing whatever percentage it is; I am probably below it. Everything at this stage is ending at potential. Potential client, potential business or potential sale but potential does not pay the bills.
The other challenging thing about handing out quotations especially for a start-up is that they give that element of hope. Hope there is interest in the service, hope that someone will walk through the door with a cheque and hope that the first step to your million dollars is around the corner. But then when the days turn to weeks and weeks into months without a reply to your quote, that hope evaporates. As soon as it evaporates someone else calls you for a quotation, and the cycle begins.
Even though I have stated that I am tired of giving out quotations, I am grateful that at least it shows that there is a need for the services we provide. However, I have also been presented with a revelation this past week. I had to ask myself one critical question, why aren’t I converting? This brings about an assessment of what we do as a business and how we do what we do. Are our prices too high? Maybe they are too low? Should I sign off the quotation differently with the statement price negotiable? Are our services packaged right? Are we showing people value in what they are paying for? Should someone more persuasive be giving out the quotations? Are we missing a customer segment? Perhaps I am just lousy with following up on quotations. These are some of the numerous questions that have arisen that need answers and find the answers I will. I do not know whether they will be the answers I want.
They say that the best way to deal with a problem is to acknowledge its existence and not live in denial. In this vein, I am acknowledging that I’m tired of giving out quotations. Likewise, only when a problem has been acknowledged can we then seek the help we need. So now I am in surgery trying to mend this problem I have identified. The ultimate testimony to know whether the prescriptions I take are working is translating those quotations to money in the bank.
Do you have any tips for me?