A customer once requested a quote from an event planning vendor and received a list of items and single cost. The customer immediately and repeatedly questioned the vendor’s quotation until a detailed breakdown was provided! Unfortunately, the back and forth did not instil any confidence in the customer. Lack of TRANSPARENCY is why the customer decided to engage the services of a different vendor!
As small businesses, sometimes we make costly mistakes that push our customers away. A customer’s request for quotation is a clear sign that the customer is very interested in your services. You can’t allow haste, and lack of attention to detail, make a mess of your hard work in business.
Every customer will think twice before parting with money. For this reason alone, a customer needs to be sure that they are engaging with the right vendor. As part of making the right choice, the customer will also need to be sure that the price is fair. If in doubt, they will keep looking for other vendors. You may not be the only vendor the customer is speaking with, so don’t jeopardize a sale opportunity because the content of your customer quote isn’t clear or justifiable!
Responding to a customer’s request for a quote
The natural tendency is to quickly generate a quote and communicate it to the customer with the aim of converting it into an actual sale. While this is true, there are a few things to consider:
- Set expectations – let the customer know when to expect the quote. Don’t leave the request open-ended, as this may not present you as a serious vendor to the customer.
- Don’t rush – it is very unprofessional to quote a figure, only to realise later that it is incorrect. Respond when you have the complete information.
- Confirm requirements – be sure you understand what the customer has requested. Don’t make assumptions. Clarify every detail and let these be clear before you create a quote.
- Create a document – it’s always better to have a document for reference purposes. This avoids confusion. Rather than verbally sharing the details with the customer, consider sharing a document instead. This should be your standard professional quote. Sometimes you may have to share the information verbally. In such cases, back it up with a document that is shared with the customer.
- Final review – give the quote a final review. Check for spelling mistakes, ensure the customer’s name is correctly spelt, and check that your quantities and figures add up correctly.
What should you include in the quote
A quote is very easy to create. It doesn’t need to be as fancy as a flyer, or as detailed as a customer contract. It can be simple, clear and professional. Most quotations can fit into a page or less.
Regardless of the size and nature of your business, quotes are a standard formal document a business issues to a customer to inform them of the costs to the services requested by the customer.
Below is an example of what to include in your customer quotations. This has been generated from MYCO‘s bookkeeping feature.
- Company information – this includes your logo, company name, address, email, telephone number etc.
- Customer information – details of the customer who has requested for the quotation
- Date created – the date the quotation is generated/printed. While this may seem unnecessary, you may need it for reference at some point
- Expiry date / validity – how long is the quotation valid for? This can be specified under terms and conditions (if you have any)
- Line items – list the items showing the description, unit cost, quantity, line discounts and line totals
- Discounts – it is important to include any discounts you’ve given to the customer. Showing this makes them understand the value of the service, and the discount applied
- Totals – the total value of the quotation. Show a breakdown if there is tax included
- Terms & conditions – any terms and conditions that apply to the quotation e.g. how long the quotation is valid for, how the customer is expected to respond etc.