If you are like many business owners, you or your sales team, spend a lot of time generating and preparing proposals or quotes for customers and prospects. Yes, quotes are the pipeline for your revenue and cashflow, but leads that are not converted to sales are a waste of time and money!
So why do some businesses convert 80 percent to sales while others struggle to convert 5 percent? Consider this -- it's all in the process they put in place. They recognize that proposals are part of a "bigger" sales management process -- not THE sales process.
Tips To Improve Your Conversion Rate and Profitability:
- Clearly define your ideal customers and understand what is really important to them. Without a clear target, every quote looks like a "great opportunity"
- Recognize your company's strengths and weaknesses. Be honest with yourself. What do you do well (and profitably)? An opportunity is only an opportunity if you can make money at it!
- Be willing to "No Quote" those opportunities that do not fit with your strengths or meet your "ideal customer" profile. We all acquire customers, then regret it later -- usually after we lose money on the job or fail to deliver on our promise- so they are not raving fans!
- Communicate with prospects from start to finish. Many businesses require quotes to make decisions - but few businesses actually acknowledge when they get a request from a potential prospect. How you communicate from the start is an indication of how you will communicate with them as a customer. What does your communication say about you? Hint: Templates work well and can save a lot of time.
- Build a formal quote process for consistency and profitability. Most quotes or estimates require input from other team members, suppliers and/or subcontractors. A documented system insures a prospect's needs are understood and input from others actually occurs - to minimize rejects and reworks that erode profitability. Another big benefit - happy customers who got what they needed, when they needed it!
- Integrate "sales and marketing" messages into your quote or proposal. Since quotes are part of the sales process, use them to reinforce the benefits or compelling reasons to choose you versus one of your competitors. If you don’t give them a reason to choose you, they will simply base their decision on price.
- Know the numbers! Track your leads, number of quotes and conversion rate so you know how your company is performing. Know your costs and the assumptions you are using to develop your quotes - then evaluate the actual versus estimated costs and learn from it.
- A "no sale" today does not mean forever. What do you do with the prospects that weren’t converted to a sale? If you're like many business owners, the answer is nothing. What a waste! You already know they have a potential need for your products or services (they contacted you!). Convert this lost opportunity into a future sale by educating (read 'marketing') them on your company. It is vital to stay connected and build a relationship and the results may surprise you!
Now Go Do It!
Nothing will change until you make changes. So start implementing some of these ideas and watch your conversion rate and profitability grow!