Estimating is the key to success

Your estimate is the first link in a long commercial chain - but by far the most important...

Imagine a telecanvasser / salesperson who is told by their line manager that they can earn £26,000 PA if they make 200 calls per day and that their commission will be £500 per sale. Here's how:

• Number of weekly calls: 200.
• Appointments made from calls 5 (2.5%).
• Appointments converted into sales 1 (20%).
• Annual sales 52.
• Commission per sale £500.
• Annual commission from sales £26,000.

In time, the sales guy/girl becomes a bit disillusioned and wishes to earn more, but how? Well, they think it through and conclude that if they improve their conversion ratio of telephone calls to appointments to, say, 3% and their appointments to sales ratio to, say, 22%, they will be able to earn £34,320 PA (do the maths yourself). However, increasing these so-called 'customer-facing' variables is no easy task. It could mean re-thinking the whole presentation processes, perhaps introducing radical new ideas and previously un-thought of information into the mix. It might also mean improving closing techniques. Dropping prices in an attempt to win more deals might also rear its ugly head.

Anyhow, the sales guy/girl brings on a lot of new ideas and, with a lot of very hard work, is able to raise their income to £34,320 PA. However, when they next meet with their line manager they are surprised to to be told that they have been working hard but not smart. It is revealed that the simplest and most effective way to increase sales income is to increase the number of telephone calls made. That is, to earn c. £34,000 PA, the sales exec would merely be required to increase telephone activity from 200 calls per week to around 265 calls per week. This would, without any modification of the customer-facing process, give them the increase in income desired, as follows:

• Number of weekly calls: 265.
• Appointments made from calls 6.6 (2.5%).
• Appointments converted into sales 1.3 (20%).
• Annual sales 69.
• Commission per sale £500.
• Annual commission from sales £34,450.

So there you have it.

In printing, the telecanvasser is analogous to your estimating function and the volume of estimates comparable to the number of telephone calls made. In other words, whilst printing companies may look inwardly at their customer-facing processes and service levels to improve revenues, the fact that a simple increase in estimating activity can have a profoundly positive effect on sales is often overlooked. It's obvious really: more estimates = more opportunities = more sales - even if nothing changes apart from the number of estimates itself.

If it is this easy, why aren't all printing companies simply doing more quotes? Well, for one thing the estimating department tends to run at capacity with bulging in-trays and heavy back-logs of enquiries. So how do they cope with more? The only answer is to improve the efficiency of the estimating function and remove the obstacle of quote number ceilings in order to be able to release the benefits that an increase in output of this department will surely bring.

Not many products are able to help in this, but PDQ can, and makes it easy to double, treble or quadruple the output of quotes (or more), without breaking into so much as a sweat. So, the moral to the story is this: before looking at your customer-facing service levels, look first to your estimating department, for it is here that the 'miracle' really can occur...

 

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Main contact:
John Roche CEO
email or telephone 0116 2711000.