Sales and Marketing Communications: Price Lists, Quotes and Bids

Estimates and Proposals are among the most common types of Sales Communications, yet they are not the only ways businesses communicate pricing information to prospects and customers. In this regard, the use of Price Lists, Quotes and Bids is just as commonplace among businesses large and small.

As was presented in a previous Posting, estimates and proposals consist of terms and pricing tailored for a specific prospect or customer. On the other hand, Price Lists and Quotes generally reflect a seller's fixed prices for goods and services without regard to specific customer wants and needs.

Another type of pricing communication is a Bid. While similar to a proposal, a Bid is usually submitted as an entry in an open competitive process. Of course, a Bid, once submitted, usually stands as is, but it can be adjusted per customer request as the bidding process moves from evaluation to selection.

Obviously, discounts and inducements can affect fixed prices; however, once the customer formally accepts a Quote or a Bid, it is usually a binding commitment for both the seller and customer. That said, it is important that sellers make every effort to ensure their Quote or Bid is realistic, profitable and "doable" if accepted.

Which type of communication is best depends on the situation. For companies selling "off-the-shelf" products and services, Price Lists and Quotes may suffice for initial sales inquiries. Of course, an effective sales professional will probe the inquiry and offer to submit an estimate or formal proposal as a follow-up.

By the same token, companies selling specialized products and services in a competitive market should always be amenable to submitting Bids. Though sometimes a protracted process, bidding does provide negotiating flexibility for both sellers and customers. And the potential for establishing a long-term sales relationship cannot be discounted.

In the end, the type of communication selected should reflect the seller's overall Sales Strategy. Static pricing may be "easier" from a Management Perspective, but unless you are selling a completely unique product or service, it may put your company in a competive disadvantage. As such, companies should be flexible in the ways they communicate pricing for their goods and services.

Jack

Related Links:

How To Write A Business Quote

Requests For Proposals (RFP) and Requests For Quotes (RFQ)

How To Write A Business Bid