“Why don’t you send me a quote and we’ll look it over?” This is a common conversation in the business world.
A salesperson has a brief chat with a prospect, sends a quote and hopes to win the business. The prospect responds “yes” or “no” and that’s it. Often the answer is “no” because the prospect is concerned with price alone.
This is what happens when salespeople send quotes without really knowing the likelihood of getting that business. When we ask salespeople if they think someone is a good prospect, they often say they, “think so.” They also tell us there’s a 50/50 chance of getting the business, but they aren’t confident about whether someone is likely to become a good client.
When quotes are blindly sent out, there are too many unknowns – what the budget for the project is, if there’s any chance of additional business, is there a better solution they should be considering, and so on.
Here at the Vx Group, we stress to our clients that sending a quote is not a measure of success. When you blindly send out a quote, you are hoping to get business – and hope is not a strategy.
We help clients shift their focus to the lifetime value of a prospect instead of chasing down one specific deal. This requires a cultural shift because everyone needs to consider the long game when a quote goes out.
The first and simplest step to transition to lifetime value thinking is to stop and think before you react.
The natural tendency is to move on a potential deal before a prospect reaches out to a competitor. But before you respond, ask what the long-term value of this client could be. You need to say “no” when it’s not good for you and may not be the best thing for a prospect. Saying “no” becomes much easier as you learn to think about the lifetime value of clients instead of just the single project that’s in front of you. Using your knowledge may stop your company from spending time on something that’s not high value – freeing up valuable time for other things.
Of course, this is easier said than done. If you’ve been in a quote-based mindset for most of your business, we can help you start thinking about lifetime value.
