Every business that has different levels of customisation as part of its service will at some stage need to quote. Quoting is an art and a science. In addition to calculating the cost of materials, you need to judge how much time you’re likely to take to perform the service component to achieve the level of customisation required.
Then there’s the X factor – the amount you may be able to charge based on what it is you can provide that no one else can – which differs by industry, whether you’re a tattooist, a shoemaker, a print publisher or a carpenter.
Quoting does become easier with experience, but because it is the least lucrative part of your business’ process, it’s best done as quickly and accurately as possible.
Here are four hacks to help you quote with confidence.
1. There’s a need for speed
If you can create a quote twice as fast as you currently do, what will that do for your business? How about five times as fast? Eight times as fast?
There are two reasons why being able to quote quickly is good for business. The first is that quoting is not your core business and is therefore not a profitable use of your time. It is standard in most industries to provide a quote for free, so in many cases it’s a cost that businesses invest in the hope that the customer will take them on.
Secondly, the faster you can quote, the more quotes you can do and the more likely you’ll be picked for the job. It’s both a numbers game and a way to put yourself at the front of the customer’s mind. I was presenting at an industry conference recently and a large player in that game said that over the past 20 years, their win rate from quotes is 1 in 12. For them, how many quotes they can they generate and how fast is a crucial part of acquiring business.
Additionally, if you can deliver a quote immediately, a busy customer rarely wants to spend more time shopping around, so you become the chosen one. If there’s a lag between a request and quote, it gives customers time to get other quotes. You won’t always win with a faster quote, but you’re more likely to.
Being able to streamline the processes that make up the quote is key. Do you have an easy-to-access reference to how much your supplies cost in any given month? Can you make your measuring time quicker and more accurate through better tools or processes? Do you have a guide on how to price variables and unusual customisations? Create one if you don’t.
2. Accuracy is a win-win
Cost overrun is a major issue in quoting. What looks like a ‘cheaper’ quote often turns out to be expensive due to lack of detail included in the quoting process and this leaves the customer with a very bad impression.
Customers love to see speed and accuracy. If you can make your quote simple and easy to understand with everything that’s included, then they are better able to compare it with others. It also saves you from having to spend time revising the quote.
Accuracy comes down to having up-to-date knowledge of the cost of your supplies, taking accurate measurements using better instruments and knowing what to look for and how to charge for items or additions outside regulation jobs, whether that’s a steep slope for a fencer or intricate embroidery for a dressmaker.
3. Quoting as customer service
Quoting is both a marketing and a customer service function. Customers become frustrated if there is a lack of communication before, during and after the project and the quoting process is a good way to show that you are responsive and professional.
Treat the quoting process as professionally as you would conduct your service: turn up at the time appointed, be courteous and well-presented and be on your best behaviour.
Once you’ve done your calculations, make it as easy as possible for the customer to accept the quote. Many quotes contain jargon and complicated calculations that are designed to confuse the customer, which prompts follow-up questions and takes more of your time than you should need to spend. Reduce these questions by anticipating them, for example by producing an FAQs document, or use simple terms they can readily understand.
4. Use technology
Keep up to date with the tools and technology in your industry and invest in those that make your quoting process easier, whether that’s because it’s faster and/or more accurate, simpler to use or makes it easier for your customer to accept and sign off on your quote. Make your competitors look like dinosaurs.
If you had two quotes, one that was handwritten with a barely legible scrawl of jargon words and you needed to call the business back to confirm and a digital version with all the inclusions laid out in simple terms that you could click to approve, which service provider would you consider the more professional?
There are a number of apps and platforms businesses can use to offer their customers digital copies of quotes and an easy response mechanism for the customer to accept it. You can then track the job and seamlessly give them a way to approve and pay for the project.
Quoting does not need to be a thankless task in your business. Not only is quoting one way you can improve your processes and therefore your workflow, the word of mouth alone from speedy, accurate quotes becomes a very cost-effective exercise in marketing.
Michael Reid is the Managing Director of AILD and founder of Measure & Quote AR. Michael has worked in the building industry for two-and-a-half decades, and has been at the helm of AILD buying group for the past ten years. Under his leadership, AILD has enjoyed tenfold growth as the group continues to improve ordering efficiencies between manufacturers and distributors. Michael is a thought leader, director and visionary entrepreneur. His latest innovation, Measure and Quote AR, is set to change the future of construction estimation.