by R David Gould

In today’s superheated North American economy the usual answer to “How’s business?” is one word: “Busy!” Great as that may seem, the intelligent Business-to-Business sales and marketing executive, in order to be in control, must have a keen eye on the facts rather than observating that everyone is very “busy”.

By capturing facts as to what is generating the busy-ness, you may be in for a very illuminating, educational experience. Of course, being “busy” is not the same as being productive or profitable. As more and more competitive forces – traditional or electronic -- attack your core business, you must have control on what activities are making you money and which ones are not.

Every business depends on sales to keep alive, but oftentimes before a sale can be booked, a quotation has to be prepared. In analyzing these quotations (or estimates) considerable useful information can be derived. Here’s how.

First, you need a straightforward database software application such as FileMaker Pro, MS Access or a spreadsheet macro, which is more complex. I recommend FileMaker [1] because the software is inexpensive, powerful and reliable, easy to learn, and adaptable to a web based solution. This software seamlessly swaps information between different platforms such as from Macintosh to PC Windows computers.

The database format itself is simple. Quotations issued are entered in synopsis, by sales representative or territory, by customer, by number, by date etc. and the gross dollar value of each. I recommend a sub-field to identify revision totals to Quotations so you can log how often, why, and by how much you are amending your quotes. Patterns will soon become apparent with customers, who constantly ask for one thing, then either change their minds or beat you down on price to get their business.

Or it may show clients who have started to slow down the number of requests for Quotations from your company – perhaps a sign of a more serious issue needing attention. You can then prepare pro-active solutions for your next meeting with the client or prospect. There is nothing more impressive, than and laying out to them that in the past 12-months you have estimated X number of jobs for $Y - but have only won Z% - and asking the question: “Why?” The result of that conversation will tell you whether this prospect has just been wasting your company’s time and money, or what more you have to do to secure the business. At the very least, they will know that you are on top of your game! Internally this can also be a very effective management tool generating all kinds of useful data.

Next, summarize the data so that you have detail displaying the number of Quotations you have generated. By using a database sub-category and sort function properly you can produce the reports on any timeline you choose - daily, weekly, monthly or quarterly, split and sorted by Territory or Representative, By Customer, By Date to generate a very meaningful analysis. Display the total value of all the Quotations issued in the period and this data is now starting to have use.

Now comes the complicated work - to update the status of each Quotation. Each is either:

o Outstanding - the client has yet to place the order with anyone.

o Won - the order has been placed for the amount quoted.

o Partially won - some of the order has been placed.

o Lost - someone else got the business, in which case a note of who and why is attached.

o Died - the client allowed the proposed order to be shelved or the Quotation was exploratory only.

o Declined - sometimes circumstances dictate that you have to walk away from business that has been quoted. This notes how often you do this.

o Having determined that status even more useful information is delivered.

The most obvious is determining how many Quotations are won and lost by your company or business unit. Percentile calculations establish benchmarks that can now be used for measuring performance improvement by sales associates on the volume of Quotations they are generating, their closing skills, and other significant trends. In many instances trends will appear that might influence decisions regarding territorial assignments or even the shape and size of geographical territories. One aspect that should be considered is the amount of overhead cost involved in generating the volume of Quotations - and that might well lead to thinking about alternate ways to produce them more effectively. Time, labour, facilities and equipment all play a factor in establishing that cost figure.

This type of analysis determines your Win/Lose ratio, identifying which competitor is winning business away from you, and determining any common trend as to why certain business is being lost. For example, if “Price” keeps being raised as the issue, perhaps it is time to evaluate your estimating, business production processes or even your margins. Either way you again have a tangible benchmark that can be used to measure your performance and over time comparative analysis can be conducted. This really quantifies internal reviews, stops any finger-pointing, and helps a fast moving organization quickly respond and adjust its sails based on solid facts.

Finally, and perhaps the best result of all this work and analysis, is the trend that shows how many Quotations you win compared to the amount of Quotations still outstanding. If you know, for example, that you are winning 75% of the Quotations over a consistent period of time, then it is reasonable to forecast that you will win 75% of the outstanding Quotations as well, unless you are aware of extenuating circumstances. This is real-time sales forecasting. That number may well have significant bearing on other departments within your organization, forecasting production capacity, expansion plans, labour requirements and a host of related supplier requirements. The value of this work as a strong management tool is quickly very apparent in application.

The computer is simply the tool that gathers the facts and crunches them into meaningful information. There is no question that it takes discipline and work to keep on top of the action. Once you start to use it, you have to keep the information flowing. But if you instigate such a database control system to augment your estimating process you can be assured of capturing good facts from your busy business.

And good facts, as every manager knows, lead to making good decisions.

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© Bald Eagle Consulting Inc. Reproduced with permission.

R. David Gould is President of Bald Eagle Consulting Inc., an independent marketing management consulting practice based near Toronto, Ontario that specializes in business development, digital strategy and execution for North American businesses. He works servicing clients in the Manufacturing, IT and Retail sectors and is currently Chairman of SME-Toronto. He can be reached by e-mail: david@baldeagleconsulting.com.