Running a successful and competitive business isn’t easy (or cheap), so it’s important to find value wherever you can.
There are many different ways managers try to add value and profit to their business: pricing better, buying better, cash control, speed to market… The list goes on.
In my experience though, the place that most value is locked up in is the place most likely to be overlooked: quotes.
Many inventory-based companies provide a significant number of detailed quotes. While a lot of effort goes into compiling the quotes, less emphasis is put on following them up, due to time or staffing constraints.
Your follow-up process doesn’t need to be complex or time-consuming. Something as simple as using an ERP system to automate an email could immediately multiply your revenue opportunities.
You miss 100% of the sales you don’t follow up
Maybe read that heading again, and reflect.
It doesn’t take much to be able to see the potential value in your quotes – just some simple math. Take the example of one engineering company I’ve worked with.
Their average quote size was around $3000, and they had three staff members, each processing approximately 30 quotes a day.
Now for the math:
3 salespeople x 30 quotes each x 5 days a week x 52 weeks a year x $3000
If you don’t have a calculator handy, I can tell you that that’s just over $70 million worth of quotes a year.
However, their annual turnover was $10 million.
So, how does this happen?
It’s common to break quotes up based on their value:
- Average (common, every-day quotes)
- Good (decent sized, semi-regular quotes)
- Great (the rare, high-value quotes)
Most businesses will put effort into following up the great, and sometimes the good, because they offer more individual value. But most of your annual revenue will be made up of the average sales – so why not put in the same level of effort to chase these?
The major issue holding businesses back from pursuing these regular every-day quotes is time. Sales staff are only human – when they’re processing a high volume of quotes each day, they don’t have the time to follow them all up individually.
But like our earlier example shows, this could be causing a huge gap between the sales you could be making, and the sales you are currently making.
Get time back on your side
The habit of only following up high-value deals is a practice that stems from building processes that centre around current or expected revenue, rather than possible revenue.
But when you break it down and see the difference between quote value and sale value, it’s pretty easy to see that simply following up more quotes – no matter their value – can easily equal more sales.
Let me cheat a bit and restate the heading I used earlier: You miss 100% of the sales you don’t follow up
But how do you achieve this without more staff working longer hours?
The answer is automation.
Workflow automation allows you to automatically follow up every quote, without any extra burden on sales staff. Do this and you multiply your chances of customer re-engagement.
By automating a quote follow up email, you’ve automatically increased your chances of making a sale for no extra effort.
An investment in an ERP system is an investment in value
This type of automation capability is possible through an ERP system. ERP captures a variety of important customer data for you that you can then use to improve your service by not just automating, but customising a follow-up response.
A customised email is proven to be more engaging than a generic one. When it comes to your customers, no one size will fit all. Using an ERP system, you’ll be able to customise your follow-ups by:
- Product or service
- Quote size
- Next step
After a customer gets a quote, they sometimes decide they’re no longer interested or would prefer to go elsewhere. But often, it’s simply that they have become busy and forget. Or they need more information. Or just need a little bit of a push.
If you don’t follow up, you never know what could’ve been and leave money on the table for your business. If you do follow up, you’re maximising the potential value in every single quote. Your opportunity for increased revenue has multiplied considerably, and your investment in ERP has just paid for itself.
And on top of the increased profit opportunities, you’ll ensure:
- Your customers get a better, more customised and relevant service;
- Your costs remain low because everything is automated;
- Your staff will have more time to focus on high-value work.
You can’t invest in more time, but you can invest in better systems. Discover if an ERP system is the right move for you by downloading our free ERP automation eBook here.
If you’d like to learn more about the value of ERP implementation, click here to contact HARMONiQ.
Drew Arthur is the Managing Director of Micronet Systems and is focused on helping business leaders overcome inefficient sales, inventory, and customer relationship management practices by leveraging cutting edge technology. If you want to gain better control of the inventory management in your business, click here to organise a demo to see how HARMONiQ Business Tuning Software can make a difference to your business.