Many business owners think that the answer to increasing their profitability is generating more work. Sometimes that is true. In many cases though there are better ways. For example, I sat down with a gentleman whose sole purpose was to find out how to get more inquiries. After a series of questions, it became apparent that his problem wasn’t the number of inquiries; it was that his conversion ratio was only 7%.
When looking at any business to increase profitability, it’s usually best to start with what is already happening in the business i.e. inquiries as a result of previous marketing. Considering that you’ve already spent a good deal of time, effort and money to get the phones ringing, it makes a whole lot more sense to turn those leads into sales instead of focusing on generating more leads.
A commercial painter in Melbourne was quoting twenty jobs per week. Out of that, he might win one or two jobs. The trouble was the jobs he won were won on price so they had very little profit in them. He was up until all hours of the night developing the quotes and then up early to get to the jobs that paid almost nothing. He commented that kids working at McDonalds were making more money than he was.
What a situation to be in. You might as well go broke playing golf rather than working for nothing.
If you’re in a situation where you quote regularly and only win around 10-20% of those, you’ll know how frustrating it can be spending all that time running around for nothing, particularly if the quotes you are winning are won on price along. This means of course, that there’s usually little profit in the job.
Here’s a simple way to win more quotes at higher prices…
Many people look upon quotes as simply writing down the specifications of the product or job and submitting that together with a price to the client. This is suicide. Quoting is much more – it’s an entire process. It starts with attracting the right type of customers, moves on to how you deal with those inquiries at the first point of contact, preparing and delivering your proposal and lastly, the follow up.
Let’s assume through your advertising and marketing that you’re targeting the right customers and you’re receiving a steady flow of inquiries. The key ingredient is the preparation and delivery of your proposal.
Ban the word ‘quote’
Here’s a scenario – you need to get some repair work done on your car so you call three panel beaters and get three quotes for the work. Now, what’s the first thing you do when you look at all three quotes together? That’s right, you look at the bottom line…at the price. The way most quotes are written make us focus on the price and therefore, in the majority of cases, the lowest price usually gets the job. If your customers are only buying you because you’ve got the cheapest price, then you’re painting yourself into a small corner because there is always someone out there who will be cheaper.
The word ‘quote’ has psychologically conditioned us to compare the price. Avoid use of the word ‘quote’. Instead, change it to ‘action plan’, ‘proposal’ or a ‘statement’. For example, a kitchen renovator might start his quote with ‘Recommendations for building your new kitchen’.
Warning: I’ve watched people change the name of their ‘quotes’ to ‘proposal’ and think that’s where it ends. Nothing could be further from the truth. A rose by any other name is still a rose. Using the same old quotes you’ve always done and changing only the title to ‘proposal’ will do nothing for your conversion.
Changing the name does nothing unless you change the entire presentation of your proposal. This means the opening statement, the selling copy, the supporting evidence in testimonials, reversing the risk through the use of a guarantee and perhaps an offer – all things that will make your proposal stand out from your competitors. Make your quote as professional as possible.
The elements of a winning proposal:
Your opening statement should cover the major objectives of the proposal – what the people you are writing to will achieve (in broad terms) when they accept your proposal.
- Provide some background information. Remember that people other than those you’ve spoken to may be reading your proposal too. Talk briefly about who you’ve had meetings with as well as highlight key points that came from your discussions.
- Meeting their needs. This is one of the more critical areas of your proposal. Use it to tell them what they told you. This section is really where the selling is done. It shows you’ve listened and that you’re on track with what the organization wants to achieve. Ideally you should bring out here emotional as well as factual areas.
- The investment in your services comes next. Many businesses submit proposals with pages and pages of how good their product or service is and then they have a section at the end of the proposal called ‘cost justification’. Please don’t do that. Instead, deal with pricing or investment right after the fulfilling their needs. When you get it out early, give the total figure first and then break it down as appropriate.
- Describe your product or service and how it meets their needs. The language that you will use is WIIFM – what’s in it for me. Make sure you focus on the client’s outcomes using your product or service.
- The implementation schedule is the last thing your reader will see. This is where you leave him or her with actions that should be taken so that all the benefits you’ve mentioned can start to flow.
- Follow up, follow up, follow up. Over 60% of quotes and proposals are never followed up. If you do this one thing consistently and persistently, you’ll dramatically improve your conversion rate.
The word here is action. That’s the purpose of your proposal – to get the reader to take action and give you the job.
There’s your formula. Follow it, adapt it and you’ll win more quotes.