Being in business, and having clients to service, we’re often asked to quote for work, and not every quote turns into an order. That’s to be expected. Some are new or potential clients going out to multiple potential suppliers, of which we are just one. Others are existing clients and have a duty to tender their work for any number of reasons. The end result is that we get some orders, and lose out on some others. That’s a fact of life when you’re in business, and in my eyes is nothing bad. You can’t please all the people all of the time.
What I’ve found in the last nearly 3 years in business is what I can only call a correlation between clients’ sizes, the level of detail required in cost estimates, and the likelihood of that quote turning into an order. This is an exploratory article and I welcome comment; I’m interested to know how others in similar situations deal with this issue as I’m sure it’s not uncommon.
There is an amount of work involved in putting together a proposal or quote for work. We usually do this for free and we feel this is the right thing to do – for those that don’t turn into orders, the quality and attention to detail that we put into all our projects are visible, and we’re often asked to quote on further work, more often than not winning that work. However – there’s always a however – it’s not always like this. We’ve got a couple of clients, and I’m sure everyone does, that we spend a lot more time servicing than we do others, without the financial benefit that this should bring.
For the most part, I’ve found that this additional servicing happens during the quoting process – how much we’re asked to do, and how much turns into real work, and therefore money. I’ve talked to a number of clients about this, both large and small, because it’s something that I feel is a waste of everyone’s time. Why spend forever quoting for work if no-one’s actually going to pay for it to be done, and why keep asking for it if the money isn’t there to do it? There are answers to this, some of which I have, and some of which I hope you can enlighten me with. This is a learning exercise as much as it is an expulsion of hot air.
Trust
I’d like to think all our clients trust us to give them the best possible service and the best possible product that we can, and at a price that they feel is good value. I won’t use the word “cheap” because we’re not, and nor do I want us to be, as that would then reflect in the quality of our work too. Smaller clients often need to have more trust because they’re much closer to their own business and they don’t want someone else’s to jeopardise it. That’s completely understandable. I pick my own suppliers extremely carefully for exactly that reason. Larger businesses still need a level of trust, but because they’re dealing in big numbers all the time, they put less emphasis on the detail at the quote phase. Having said that, we have several small clients that are happy for a simple cost and time for the work they want done. If it feels right, they place an order. They trust us to be accurate.
Experience
Large businesses are experienced in dealing with external contractors, and therefore confident when a quote comes in that it feels correct. Smaller businesses may not be so experienced. This isn’t a complete truth, as many small businesses are started by people who’ve worked for large ones, but it does hold some value. Those with less experience though may well ask for more detail than is really necessary. Again understandable if you’re someone not experienced in a given field of work – we’re web developers, but don’t know how much it would cost to build an exhibition stand for instance, or why one exhibition stand in one centre would be more than another similar stand in a different centre.
Money
Clients don’t always have the money to do the work now. Just like I might ask my estate agent for a valuation of my property, even though I have no intention of selling it yet. However, my estate agent knows my property, and I trust him, so when I ask him for a ballpark, I’m happy with a top-of-the-head figure. What concerns me is the level of detail asked of us when we know the money isn’t available to complete the work.
So what do we do about the clients that we spend a lot of time servicing, but we either make very little money from, or even make a loss on. Do we drop them? Do we approach them about the problems? If so, how? What have you done in your business experience where issues like this have arisen?
I’ve no problem putting out detailed quotes, but I’d like to be more confident that these will turn into orders. For one client, we’ve put forward six or seven sets of detailed quotes this calendar year, and none of these have turned into orders. In the meantime we’ve continued to service them as valued clients, just as we do with all our others. Is this the right thing to do? In the hope that at some point soon, the work will actually come in? Do we charge for quotes – I know others have though I’m not sure whether it has proven successful or not.
Could we be more transparent? Maybe the solution is actually to offer a very high level ballpark estimate without the detail, followed by a more detailed quote if the client in question feels this is feasible with currently available funds. Although this doesn’t solve the problem that these clients want the detailed quote up front. I’m keen to try and reduce the amount of wasted work we do, without reducing the level and quality of service that we offer to our clients. Typically, I’d make a decision and run with it, but this feels a little more contentious and prone to serious consequence if we get wrong. I know I’m being very open in this article, but I feel this is the right approach. If you think you’re a client we’re not servicing properly, please tell me. I’d love the opportunity to discuss over a coffee what we can do in our business to better both the strong relationships we already have, and to bolster the weaker ones and turn them into strong ones.
I’m going to wrap up here, and ask for advice and experiences you’ve had and the solutions to the issues in this article.
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