Options For Improved Quote Management And Results

Published in: New England Printer & Publisher, August 2005

The sales rep asked to review the previous project's samples, and hopefully learn "what was really important" in the upcoming project. The buyer, who didn't really have time to see the rep, was frustrated that too many projects weren't occurring as needed or expected. What was different was that a supplier she didn't really know had stepped forward and expressed interest in areas that hadn't before been examined. Time was eventually invested in a question and answer session in the buyer's office — in hopes that results would be closer to expectations, and on the intuitive hunch that she might learn something that would be useful in the future.

As a supplier, we learned several important aspects of this project in this "discovery session." We learned:

• What was most important about the project (which included certain colors!);
• What was critical (what might cause the project to be totally rejected);
• Errors by previous suppliers;
• How the project was to be used (which lead to several options not previously requested or recognized);
• Frequency of communications of project status — that the buyer really wanted, but didn't know could be requested;
• The budget;
• The financial officer's interest in our "Terms and Conditions of Sale;"
• What the project was intended to accomplish for the marketing department;
• That other print materials were expected to be used;
• Mailing specifications, including the recipient list (after Confidentiality Agreements were signed and exchanged;)
• Expected time allowed to produce the project;
• How alteration charges were to be treated; and
• The value of producing about 4 percent overs for other down-stream needs (also not included in original specs).

Ultimately, we incorporated these issues into our quote letter, and later heard that the "enlarged buying center's" discussion for the award came down to one statement by a department director, "It looks like only one supplier really understands this project."

Market conditions and background

What we have here is a global scene that integrates broad market dynamics of inexperienced customer personnel, new technologies and specifications, and compressed time frames — that collectively serve to undo the average supplier and buyer, but which can also elevate any supplier who's "focused and committed to taking best care of his customer."

The following "quote clinic" may appear remedial at first, but from the smallest commercial printer to major web operations, quotes to customers have become as generic and sterile in their content and value — as the products we claim to produce are not.

Many if not most buyers are under pressures that mirror or even exceed what graphic arts suppliers are experiencing. Print buying is not their full-time job. They increasingly don't have time to properly evaluate new and prospective suppliers — as project specs can have a wide range of requirements. Additionally, buyers often don't know on the front end of a project what the specifications eventually will be, and given that the buyer is probably managing two to three dozen projects or more at any one moment, each project predictably doesn't receive the necessary attention on the front end.

Suppliers on the other hand more often than not receive incomplete information in buyers' Requests For Estimates (RFE's). And obtaining additional or needed information is too often reduced to leaving a voicemail message that's not returned until after the quote was due to be sent. Many if not most of the RFE's are received by e-mail, sometimes require information from outside suppliers, with turnaround times that are often less than one day.

Combine these conditions with supplier sales reps and estimators who too often don't understand the buyer's business, performance expectations, and information needs, and you've "cooked" a scenario that predictably and repeatedly leads to "trouble and disappointment."

Issues to examine and present

The starting point for quote letters should include, "What does the scene look like as our customer evaluates three or more quote letters from prospective suppliers?" I've been on the receiving end with buyers, and too often three RFE responses look so similar that a buyer has difficulty distinguishing one supplier from another. This condition tends to focus evaluation on the price.

My preferred quote letter includes an opening paragraph that starts with, "Our understanding is that the following issues are of particular importance to this project: and I proceed to number and describe them in clear language.

Then and only then should the supplier engage specifications, options, assumptions, concerns, Terms and Conditions of Sale, and, finally, the price.

Even with a "final price," there can be "special conditions" that can ultimately provide "fair value" to the supplier. For instance, buyers often offer that the supplier will have a certain number of days to produce a project. This is a particularly sensitive issue if a project is repetitive. We've found that allowing three prices, representing three different cost scenarios, based on the time actually allowed to produce a project, can lead to a more realistic cost and actual margin picture for a winning supplier, while also allowing that supplier to present top-level pricing should additional time actually be provided for production.

Project proposals — a forgotten art

"Enlarged buying centers" represent the trend that any major buying decision that entertains a "change in supplies" will riot occur without consultation with other key buyer personnel. Background includes that buyers are often less experienced, and thus more dependent on associates and even other trusted suppliers to guide their selection and evaluation of suppliers.

This market phenomena, known as "the enlarged buying center," creates a handicap for relatively new suppliers, because key buyer personnel who might be involved in the decision process don't know the supplier. And trust is eventually what it's all about.

Repeatedly, we've encouraged client reps to develop a first rate proposal that includes: what we understand about the buyer's company, and this project; their company's history and differentiation; unique capabilities; organization structure; professional biographies of key personnel expected to work on the project; customer references; samples similar to the project being quoted; timelines and options for the project; and exhibits — samples of procedures and "information-driven structures" that insure the customer receives what was expected, and needed (e.g., options for what information and format an invoice might contain, and Terms and Conditions of Sale).

Supplier benefits to quote-related information being developed are multiple, including: proposal information can often be developed and refined before there's an urgent need; proposals can be delivered in multiple copies so that each member of the "enlarged buying center" receives a copy; buyer personnel receive information that professionally elevates their understanding of the prospective supplier's abilities; and if produced accurately and well, whether the supplier receives the target project or not, additional business suddenly begins to flow.

Summary

Buyers ultimately will determine what our industry looks like, and who prospers. The more a supplier studies the conditions that buyers are enduring, the more sensitive and effective that supplier can expect to become with those buyers.

That said, information drives understanding, and we as suppliers should become more critical, reflective, and thoughtful of all communications buyers receive (and don't receive) from our organizations.

If you agree with those last two paragraphs, go take a critical look at the quote letters your company is sending. They could probably be improved — significantly.