Rhonda Dibachi is its CEO Hey Scottiean AI-enabled automatic invoicing engine for outsourced finishing services.
Imagine you have 25 people clamoring for an offer, and they want it ASAP. Some come prepared with prints, but others do not. Some Requests for Quotations (RFQs) are for major projects, while others are just prototypes. Among these potential buyers, some are familiar faces and others are strangers. How do you wisely invest your sales organization’s time on those requests that are most likely to generate long-term, recurring revenue? Here are some programs I’ve seen implemented and their unintended consequences:
• First In/First Out (FIFO): This is easy to implement, but does not take into account the quality of the lead.
• Biggest possible deals first: If you use it to prioritize your work, you’re at the mercy of what your bosses tell you. Anyone can say, “Give me a price for a million pieces,” but never buy anything.
• Repeat customers first: It’s always a good idea to pay attention to your existing customers, but you could be missing out on the next big thing.
• Highest margin first: You usually need to go through the entire bidding process to determine the total margin, so this method is of little use in reducing workload.
The art of referral or estimation is not an exact science – it’s about distinguishing between real opportunities and wasted time. This is where smart categorization can come into play, helping you sort queries based on key factors that reveal the true intent of the buyer.
In my line of work in the metal finishing industry, three metrics have shown a strong correlation with long-term recurring revenue:
1. Previous RFQ History: If a lead comes from an existing customer, you know their intent. If it comes from an organization that solicits quotes but never makes an actual purchase, you know how to respond.
2. RFQ Accuracy: RFQ precision measures how well defined the request is. Are all the specs set or is it just a drawing on the back of a napkin? A well-defined RFQ signals high buyer intent.
3. Lead Response: This measures how quickly prospects show interest and contact you. A prospect who answers your phone call indicates a high-intent buyer.
Each RFQ is given a score for each of these three categories. The overall score becomes the means to efficiently and effectively prioritize all RFQs. Your industry will have unique dynamics, but these examples show the value of quickly identifying simple indicators to help you focus on the most promising opportunities.
In pricing, it’s about finding the right balance between effort and customization. You want to do a complete job on each quote, but you know this will take longer than your team can realistically spend on each RFQ. Using smart categorization, you can understand when to offer a personalized service for high-potential RFQs, while having a standardized offer for lower-value parts.
Instead of behaviors like FIFO or complicated scoring strategies, think of it as a balancing act. This approach is all about keeping things crisp and clear. The whole team can understand and apply it. It equips the team with tools for confident, transparent pricing decisions, eliminating guesswork and ensuring accurate pricing.
The goal is to build strong relationships with high-value customers while maintaining consistency and accessibility for a broader customer base, with the goal of optimizing revenue and enhancing overall satisfaction. In our approach, we found that effectively categorizing RFQs greatly enhances our focus. This, in turn, can lead to faster quote generation (because your sales team spends their time on high-potential RFQs) and streamlined sales processes, ultimately reducing stress. Categorizing your leads also minimizes time spent on low-quality leads and enables a more successful sales organization.
Move beyond the front desk
And it doesn’t stop there: The power of data-driven insights not only benefits sales operations but extends to all operations. I’ve used smart categorization to set credit limits, prioritize production jobs, and determine the next new product development opportunity.
The Science of Quoting
Smart lead categorization isn’t just a method—it’s a game-changer in the art of prospecting and customer engagement. It’s about placing smart bets in a sea of requests and using data to guide us toward the most fruitful engagements. But it’s not just about improving response times or improving efficiency – it elevates our sales strategy from guesswork to precision targeting. By adopting this method, we’re not just staying ahead of the curve, we’re redefining it—directing us toward more meaningful connections, greater success, and increased growth in the competitive world of sales.