HOW AND WHEN TO PLAY BUDGETORY AND 'STAY FIRM' GAMES, ON RECIEPT OF A RFQ

Industrial Selling is a different cup of tea in India than in the West. Here reject RFQ's at your own peril.

  I read Geoffrey James’s article titled “How to give the customer a price quote”  and it’s really   a fine piece of sales writing. I wanted to write something else this week.But then I thought about all those young kids, in sales and   marketing, the newbies and the almost-s all over the immense country and I changed my mind. (In Kolkata its 39 ^o Celsius plus in the shade in March, so I can just think about Chennai.In India, you don't get AC cars to zip to on sales calls in junior levels, so I decided to write this blog post instead).Apologies Geoff, but that kind of selling will not get you anywhere in INDIA. Sure, the track is right but your direction is all wrong, my friend. Just my 5cents but you need the culture shock absorber.

        In India, you have a system of budgetary quotes and firm quotes. Now, I am sure that there must be a system of budgetary quotes in the West too, you just use a term for it, which I am not familiar with.Anyway, some of the biggest requirements come from the Public Sector Organizations(e.g.IOCL the only Indian company which is in the Fortune 500, if I'm not wrong). In a sort of matrix cum pyramidal structure, you have many different departments. For instance Engineering Services (ES) and Maintenance are different departments and you can have business with both as the ES as well as the M.M(mechanical maintenance) as the former goes in for the projects and the latter, the after sales part of the business. Say, you are selling pumps for intake, the concerned in Indian Oil Corp Ltd dept is Power and Utilities.(In other organizations, it may be different). From my experience I can say that if you get a RFQ from such a department, DO NOT EVEN THINK of calling the boss in the department. See who has signed the RFQ and if you find say its a Purchase Manager or even an Asst Manager, from Operations, your stand is vindicated. It is a must to quote but a little later.
                 

              The chances are high that if you call up the boss, he will have an even less idea of his requirement then you. Your best bet is the original sender, although he is in no way the final decision maker. In Govt. organizations, there is no final decision maker and that is the way it should be. The operations man wants to buy the things he has mentioned but as he is the one doing the legwork, he's got no authority. Say you are pissed off and do not quote, you may have unquoted yourself out of a job. These guys are good at selecting the equipment type but they need to have an estimate of the cost.That's because proposals beyond 10-15% variation are shot down by the finance guys. Before your lips start curling in derision, let me tell you some of India's most talented engineer's are these.They think of everything too help you, and they don't give you any advantage. You need to have relationship selling experiences with them for the best results

          

   

   

               That's why they send you the RFQ- because they want an estimate. Now don't get me wrong. I'm not saying that phoning them is bad.(The small fry can come over phone, but we're talking about the big ones now.) Phone them, take an appointment and meet him or her pronto! Learn what the project is, build up a relation and stay associated with them . ( I don't mean this is any non-ethical sense) and if by any chance you know that your model will not work, speak to your boss and reject the RFQ. That's going to save you millions in the next couple of years. 

      In time the inquiry or RFQ from the Materials department, which will mean everything is finalized, they have calculated all the pros and cons, all financial approval has come,and by then you should have made sure that you have got a good chance-not unethically again but if you have got a good product , then there is nothing unethical to reiterate your product's positive points, is there? It is then and then only then, that you tell your boss, show him all the specs common with yours and describe the favorable position you are. As for what to quote, we are talking of orders here with an invoice value of not less than 50 Lacs which is the grand sum of $1 million. It may even be 10 lacs which is 200 grand and which is anything but small for the average sales engineer cos we know very well that the sea is made of droplets of water. So, quote high! let the budget be high! And when the actual RFQ comes, you have a couple of aces with you. Always keep some breathing space around. Today most Indian companies in steel, Ports, Infrastructure, etc. are new and its common to find people from PSU units who have joined them. So, I can safely tell you that this system will be in vogue for another five or six years at the most.In the US, people deal with a snap of their thumb and forefinger. A budgetary offer gets you an order in 2 weeks. Here it takes you 3-4 months. In fact, a single order for Filter Presses took me 18 months 

but then, the value was $13 million approximately, and there were some other factors associated with it too, like recession etc.

            This is my friends, the difference between giving a price quote in the US and giving one in India. Geoff's right on the button but his article needs the "culture shock" treatment to be applicable here, and that is what I have done. An important thing to remember here is that a budgetary quote gives you indicative prices, without any validity. A firm quote on the other hand, is valid for 30 days, 45 days , whatever but not after that. There is a big clue in the above sentence, friends, and I am sure you will find it before long. But, if you do not, do not despair because I have not been able to find it too and I'm the writer of the line. 

      

              Nothing like a lousy joke to get your adrenaline flowing in the morning,

Signing of now

        

Bibo.B

from Kolkata/India

Have an Awesome day!