Sales quoting mistakes can be incredibly costly for businesses – impacting revenues, customer perceptions, and employee morale. This article is based on a true story of a sales quoting mistake. The names have been changed to protect the individual’s privacy.
Have you ever made a $50,000 sales quoting mistake?
Back a few years ago when the economy was humming, this scenario happened. In 2017, a midwest U.S. firm was quoting on a $250,000 project. They made a mistake – a huge mistake.
One of their sales reps, Shelby, delivered a quote to a client that resulted in a $50,000 loss for the firm. In fairness to the rep, her name is not Shelby, but we’re protecting her identity here.
Shelby was a hard worker, good at her job, and eager to please. This project was a whale for her – one of the largest of her career. She had a great relationship with the prospect but the process for this sale was lengthy and complex. Their quote needed many client interactions and revisions over a period of weeks.
So what happened?
Simply stated, rules on the products Shelby was selling kept changing and she didn’t understand those complex rules. It’s an easy mistake to make with the hardware and software products Shelby’s firm offered, but to oversimplify, it came down to something as simple as you can’t have option A with item B. Shelby was trying her best to get this deal closed, and in trying to get a quick revision back to the customer – she forgot to double-check herself.
So did her manager.
And so did the VP who had to approve pricing on this quote.
Don’t you think they would have loved to have an automated system to double-check all quotes to ensure mistakes like this didn’t happen?
Most sales reps, like Shelby, are all super busy – and they’re all trying to get as many quotes out per week as possible – not to mention the time spent prospecting, having discovery calls with clients, and coordinating meetings between relevant decision influencers and decision-makers. In the heat of the moment, small mistakes are far too prone to happen – and they can be costly. $50,000 in Shelby’s case. Of course, that wasn’t the only cost. The unquantifiable cost also impacts the company’s reputation and employee morale.
3 Common Elements of Sales Quoting Mistakes
Manual Data Entry and Duplication
Out-of-Date / Inaccurate Data – Pricing or Product
In Shelby’s case, she was under pressure because of time constraints. She wanted to get the deal closed before the quarter ended. Securing the sale would have qualified her for the President’s Club that year and won her a trip to Cabo San Lucas, MX.
To generate all of her quotes, Shelby had to use a number of different forms – and keep track of all of the revisions and updated pricing forms from the manufacturer as well. With multiple forms for the hardware and the software required, the manual data entry and duplication was a powder keg prime for an error of this magnitude.
Of course, one of the key factors of the need for so many revisions was the new price lists sent out only 3 weeks before she was trying to close the deal. It was too far past the live date to honor the old pricing, yet the rollout of the pricing update did not make it to her team.
How to Solve the Problem
Who do you think was at fault? Was it Shelby’s or the approver’s? The rep took the blame as she felt she had to in order to keep her job, but the approvers missed the mistake. It seems they both were to blame. Here are some questions you can ask to avoid this problem:
How can we reduce the complexity of our quoting process?
- A rules-based solution can keep track of everything, including pricing updates, and ensure all rules are enforced – meaning the rep only needs to select certain options to generate their quotes.
How can we guarantee error-free quotes?
- Maintaining accurate and up-to-date product and pricing rules in a centralized location that everyone is using can reduce the risk of quoting errors – especially if you’re moving from a manual process with multiple versions of spreadsheet pricing as was the case with Shelby’s quote.
How can we avoid this risk, while generating more sales and a better customer experience?
- There a number of sales tools that can help this scenario, but the key is to develop a platform that accomplishes these things:
- Ensure collaboration across the sales channel members
- Enable productivity be shortening the time required to generate accurate quotes – Thereby freeing up the rep’s time to sell more
- Deliver a great user experience to encourages the rep to want to sell more of a certain product – because it’s easier and not a PITA
- Have a rules-based, web-based platform that helps the rep generate quotes on-demand from any device.
- Generate easy-to-comprehend quote outputs that make it easier for a customer to say yes
eRep CPQ: A Better System for Avoiding Sales Quoting Mistakes
The whole organization in Shelby’s story felt the pain of this $50K sales quoting mistake. Frustrated executives tried to pass the blame to others. But rather than blame people, why not why not blame the system?
A people problem is often a system problem in disguise. The right technology can provide a permanent fix. Give your people the tools they need to improve their performance, and you’ll reduce turnover while increasing profits.