Quoting Errors: Directly Costing Businesses 5-15% of Their Total Revenue
For many businesses, focusing on profits means scrutinizing operations, cutting down overheads, and optimizing sales strategies. But there’s a hidden drain on profitability that often goes unnoticed: the cost of errors in the quoting process. This blog post will shed light on the financial effetcs of these errors, emphasizing why fast action is crucial for businesses that want to safeguard their bottom line.
The quoting process is no longer a straightforward task. With businesses juggling countless products, vendors, fluctuating prices, discounts, and regional regulations, it’s a minefield waiting for an error to occur. Each seemingly insignificant oversight or mistake can compound over time, leading to sizable losses that directly impact revenue and profitability.
But what if there was a way to turn this around? Enter Configure, Price, Quote (CPQ) software. More than just a tool, CPQ acts as a safeguard. It streamlines your quoting process, reduces errors, and guarantees alignment with your pricing strategies and business rules.
Real-World Savings: Five CPQ Success Stories.
To truly understand the financial implications of quoting mistakes, let’s use 5 real-world examples where CPQ made a big difference:
The High Cost of Discounts: A machinery vendor was bleeding profits due to excessive discounts and high trade-in values. After deploying our CPQ software, vloxq, they locked in a minimum profit margin of 15%. This intervention led to an astounding net profit hike of 5 million SEK annually.
Staying Updated with Supplier Prices: Changes in supplier pricing had a reseller scrambling. With vloxq, they always had the most up-to-date prices, saving them 5% of their total revenue which equaled 2.6 million SEK in just two months.
One Product, One Massive Oversight: The software firm didn’t realize their inconsistent pricing on just one product – which is only a single example among many – was costing them a staggering 1.5 million SEK annually. Integrating vloxq put an end to this costly oversight and increased this specific product's contribution to total Revenue by 10%.
Capturing Forgotten Costs: A franchisee missed out on huge revenues by not quoting for installation costs. vloxq highlighted this lapse, unveiling potential installations worth 20 million SEK which would increase the total revenue by 12,5%.
The Cost of Currency Delays: Manual quoting processes left the machine trader’s currency exchange rates lagging by two months. This delay led to losses of revenue amounting to 2 million SEK or 8% of total revenue during this period. With vloxq’s real-time currency update feature, they secured accurate quotes and prevented such costly mishaps.
These stories are a testament to the massive financial consequences of quoting mistakes and how CPQ can be instrumental in preventing them. If you see your business mirrored in these examples, it’s time to reckon with the reality of your quoting process and consider the value that CPQ can introduce. Don’t let overlooked errors deplete your profits.