Small and medium-sized businesses are the backbone of the Indian economy. SMEs alone have contributed a lot to India's economic growth and technological advancement. So it's necessary to solve the problems which SMEs face in their daily business activities. And one of such problems that SMEs face is related to tracking of Customer (Sales) Inquiry and Sales Quotation.
So before going down about what problems the SMEs face with customer inquiry and quotations, let's find out what these words mean.
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What does Customer Inquiry mean?
The term Customer Inquiry is a stage in the Sales flow of a business. It is that stage when their customers approach them with an inquiry about the products they offer. It comes in between the steps of Prospecting and Connecting Qualifying leads of the Sales Cycle.
What does Sales Quotation mean?
The term Sales Quotation is also a stage in the Sales flow of a business. A quotation is a type of document which helps the prospective customer determine the cost of products. It is generally prepared based on Customer Inquiries received by the businesses. It comes in the Presenting of an Offer step of the Sales Cycle.
Now after knowing about the terms Customer Inquiry and Sales Quotation meaning. Let's dive into the problems which small businesses face regarding these two essential documents and other related factors.
Problems that SMEs face with Customer Inquiry and Sales Quotations?
Did we have sent any response to the Customer Inquiry?
Small businesses generally rely on Microsoft Excel or Physical registers to record all the Customers Inquiries their organization receives. And this type of recording process makes it difficult and almost impossible to keep track of Which all parties have sent an inquiry and How many queries got receive in a particular period.
Also, that is not all. The main problem is whether the company has made any responses to the Customer Inquiry or not, that is crucial to the business. Because if no replies got sent to these inquiries, prospective leads would go out of hand from the company. And ultimately result in lower profits or losses for the business.
Did we have sent Sales Quotation, and, Whether we have made any Follow-ups?
SMEs generally use Microsoft Word and Excel for preparing Sales Quotations and keeping a record of them. And this traditional process constitutes lots of manual work. Also, keeping track of it becomes next to impossible.
The Follow-up process is also the same as the preparation of Sales Quotation. Because proper records of the Number of Quotations send to Which person and at What date it got sent are not regularly maintained in many SMEs. And the tracking of Follow-ups also becomes a tough job for SMEs. Due to these inefficient processes, businesses can lose their probable leads, ultimately resulting in lower profits or losses for the company.
Did you know about the Conversion Ratio and why it's necessary to keep track of it?
Many SMEs are not familiar with the concept of Conversion Ratio or Sales Closing Ratio in respect to Sales Quotations sent by them. Conversion Ratio or Sales Closing Ratio measures the number of quotations sent or prospects engaged by you and your sales team compared to the number of deals won. The conversion ratio helps in analyzing the effectiveness of a business's sales funnel.
The formula for calculating the Conversion ratio is -
Conversion Ratio = Total no. of Orders received
No. of Sales Quotations sent
The conversion ratio helps setting up performance benchmarks for the business against any historical trends and business targets. And this data is decisive whenever firms engage themselves in sales forecasting activities, particularly salesforce effectiveness and revenue predictions.
To summarize, the problems that SMEs have with Customer Inquiry and Sales Quotation are that. Firstly, they are unable to record and then track these data, which creates ambiguity regarding if sales quotations and any responses to a customer inquiry got sent or not. Secondly, due to no tracking of this type of data, the analysis process regarding the efforts made by the sales team in getting leads also gets compromised. And these failures ultimately lead to a loss for the business.
So now, to provide solutions to SMEs for their problems, you all should try to automate and digitalize all your core business activities. And by doing so, all the processes like record-keeping of customer inquiries received and sending out responses to those inquiries, including sending sales quotes, will become fully automated. Also, with the help of proper recording and tracking of these processes, the reporting and analysis will become easy for SMEs. And it will directly benefit the SME owners in their decision-making process.
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Additionally, with the help of BI dashboards and their tracking features, the Decision-making process will become quick and efficient. And to get these BI dashboards, tracking, and reporting features, the businesses need to digitize themselves first. So to help them with that, there are many tools and software available in the market. And organizations according, to their nature, size, and affordability criteria, should choose among them. TranZact is one such option available for SMEs that can help digitize their entire business process right from sales inquiry to dispatch.
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