Quoting Is Not Qualifying
I run into this topic often and it is one worth defining. Many companies value quotes as strong sales activity. Now don’t get me wrong, quotes are a step in the sales process and typically one that occurs before a close. However, companies that have under-defined sales processes often choose to substitute quotes for qualifying.
Here is what I mean – just because a suspect asks for a quote does not mean that they are a prospect. This applies to customers too. First, let’s define suspects and prospects.
A suspect is a company that shows some interest in your product or service but you are not sure of the level of their interest. They could be tirekickers, competitive shoppers or legitimate prospects entering the sales process.
A prospect is a company that has a need/pain, budget for a solution, time-frame to buy/implement and a defined decision process. The prospect is actively seeking a solution and will reach a decision.
Here is the problem when companies substitute quotes for qualifying – they do not invest the time or effort to determine if the quote-requesting company is a suspect or prospect. In other words, they skip the qualifying step in the sales process.
This approach is dangerous in that the company invests resources in producing quotes. It has been my observation that these companies almost never know how much a quote costs to produce. Big red flag – you must know how much time, effort and resources are involved in generating a single quote. You may be shocked.
Second, the suspect company may simply be probing your company for competitive information. Is there anything more valuable than receiving your competition’s standard quote?
A sure sign of this quote approach is a close percentage well below 80%. Quotes are the last step before closing so your closing percentage should be quite high – certainly over 75%. If it isn’t, you have a qualifying problem amongst your sales team.
The first step to fixing this problem is to develop a form for the key information needed before issuing a quote. May I be so bold as to suggest need, budget, decision process and timing as a good first step to this process? If you implement a pre-quote structure, you will see a marked decrease in your quotes and a dramatic increase in your close percentage.
Posted By Derrick Moe | Sales Management,Sales Techniques | | 
Comments(2)
Great article….
Derrick, a post that really needed to be written. Solution Selling addresses qualification really well with a sales tool called the Opportunity Assessment Worksheet.
(you may need to scroll down the page when you follow this link)
http://books.google.co.uk/books?id=DJifEl1vLmYC&pg=PA139&lpg=PA139&dq=%22Opportunity+Assessment+Worksheet%22&source=web&ots=mX0Ipo1Yno&sig=cXa5B9pnDpmZ0dqpFqjvl563sXM&hl=en&sa=X&oi=book_result&resnum=4&ct=result#PPA140,M1
It is a form, like you suggest, that asks the key questions of the sales person (in great detail). I think it’s the most useful single element of Solution Selling.
Another question that your post throws up is about when we should qualify. I totally agree that qualifying early is essential. However, in my opinion an element of qualification should be included in most touches with the prospect. It’s vitally important to know if something has changed (or if you were not given accurate information from the prospect initially). My personal approach is qualify hard, all the time and not to hesitate to “qualify out” opportunities that don’t make the grade. If I can cut out all, or most, of the waste from my selling time I should, by definition, only spend my time on opportunities that will actually close. And that’s where I want to be putting my efforts. Derrick, thanks again for a great post.