In business, it isn’t uncommon to be asked to quote. The reality is that it’s a cost of doing business, but there are a few things to consider, particularly how to manage the situation when you’re simply being ‘used’. This might be to drive the price down, be used to get ideas from, or simply because they are required to get a ‘second quote’ and have already decided who they are using, and you’re just being used as ‘the second quote’. I’m going to cover a few different scenarios and provide a few suggestions.
As a Second Quote
1. Efficiency
Let me first start by saying that your proposals or quotations should be done in an efficient way which is most effective for converting a quote into an order or sale. Having a great system, template or program will make life easier, so that doing a quote doesn’t take all day.
2. Qualify First
This might mean finding out if the person is actually ready to proceed or is months or years off. If your pricing is very transient, then quoting now, even for 6 months in the future, may not be ideal. Find out how many quotes they are getting. Even for a big spend, more than 3 or 4 is just getting silly. They are putting it out and getting say 10 quotes, they are aiming to cement the cheapest price, not the best value.
3. Charge a Quote Fee
This won’t work for every industry, but does for some. I know builders and renovators get paid a fee from NDIS to quote in some instances. I had a business coaching client a little while ago who provided a garden design as part of their landscaping quotes, which took a lot of time. On top of the design they submitted, they visited the potential client and discussed the project, often giving them fresh and innovative ideas. This quoting process was effective for those who were serious about engaging a service and they often converted. However, for someone just fishing for garden ideas, wasted a lot of time. The strategy of a fee up front for the quote, in this instance, coming off the price if they proceeded within a period of time was super effective. It cut out those shopping for the cheapest or worse, those purely getting a quote to get garden and landscaping ideas.
4. Know your Numbers
I know builders are known for using other tradies to keep their ‘regulars’ honest. If you’re quoting for someone time and time again and not converting, there is an issue. Either your price is too high, or you’re simply being used as a benchmark for someone else who is somewhat guaranteed to do the work. Or another situation might be that you had high conversion with that business previously, but your conversion rate has substantially dropped. That needs to be addressed as well.
5. The Blatant ‘Second Quote’
Sometimes in various scenarios, you’re simply being used. Insurance companies are an example; they frequently ask for two quotes, where it’s seen to keep ‘everyone honest’. Another scenario is Government, or Government-funded agencies, where they are expected to get two quotes. If you know it’s this scenario, ask questions like “Have you got another quote?” or “Were you happy with that other quote?” Chat to the person; you don’t have to ask how much the other quote was, but you can determine if they’ve somewhat decided on the other person. I had this happen to me recently. Someone asked me for a quote, admitted they had already got a quote which they were happy with, but needed a second so that their funding could be approved. In other words, they’re likely going to go with the other person; it’s all but confirmed, but they are going to use me as the second quote. I will credit this person, at least they were honest with me.
Now, onto what your options are:
6. Strategy # 1 – the Premium Approach
With this strategy, you’re going to use your fabulously pre-created templated quotation or proposal to put together an excellent proposal which somewhat cannot be ignored. You will essentially educate them as to why quality is more important than price. You’ll include rave reviews from previous clients and will detail why you’re a great choice. You’re assuming you’ve got a chance and will impress the socks off them, so that you are suddenly being seriously considered. If the quote is a large amount (ie a house, extensive architectural plans etc), then couple this with delivering the quote, so that you not only look good on paper, you provide the personal touch. Quotes which are hand-delivered almost always have better success.
7. Strategy # 2 – the Super Quick Approach
The very quickest approach might be to simply say you’re booked out for several months, so are sorry, but won’t be quoting on this item. This is fine if you are very busy, don’t need work, as you’re essentially closing the door for the moment. However, you might be closing the door forever, and essentially calling it quits with them permanently. A templated email which is well worded might work well for this.
8. Strategy # 3 – the Semi Quick Approach
This can work if you want to keep the door open, but you’re not going to spend a tonne of time on the quote. It might be asking someone to email photos over and then dropping them a quick email which states the item is estimated to be between $X and $XX. If they are wanting to proceed or discuss further, then please get in touch.
A variation of this is a pricing written on the back of a business card, which is not ideal because you may not recall what you wrote. Hence why it’s better to qualify the lead first and save yourself a trip out to their home/business to quote in the first place.
9. Strategy # 4 – the Relationship Approach
This is better done over the phone or in person, as emails often have a way of being taken the wrong way, or in this case, won’t be as honest as someone might be if asked to their face. Politely point out you’re consistently quoting for them, but have noticed a substantial drop in your quote success rate with them. Why is this? If they talk about pricing, it might be clarifying if the other party is quoting for the exact as you, especially if you provide a better quality of delivery. For example, in epoxy, competitors might be quoting 4mm and you’re allowing for 5mm. One millimetre over thousands of square metres really is a difference. Essentially, are the quotes comparable? Ask how far over you’ve been usually. Because it’s a face-to-face (or over-the-phone discussion), you may even be able to discover if the successful person is a relative of the owner, or in some way is being given preferential treatment. End of the day, it might be a case of saying that you’re happy to continue quoting, but you need to ensure your time is being respected. But again, if things don’t progress, you might revert to strategy # 2 or 3 above, or strategy # 5 below.
10. Strategy # 5 – Calling it Quits
You’ve tracked the conversion and the same person or business is inviting you to quote; they haven’t indicated your prices are unreasonable (or you know your pricing is fair because elsewhere you’re converting significantly better), then it might be time to call it quits. For a start, if you’re feeling used and abused, it’s wasting significant time and the results are simply zero, then why would you throw good money after bad and keep going? This person or business doesn’t value you, doesn’t respect your time and you’ve simply had enough. You’re possibly at a point that even if you did, out of the blue, actually win a job, you might not even want to work with them. They are no longer your ideal client.
Remember also, even if you are being ‘used’ as the second quote, in some instances (although doesn’t happen often) the first preferred business could fall through and you might be called upon as the second quote. If you’ve quoted, you’ve kept the door open, but know, this is a long shot!
This challenge, like many others, are just some of the things that I help my business coaching clients with. I am a problem solver, but I am also strategic and like working with clients to resolve problems before they even become a problem – that is, being proactive. If you’d like to know more about my Australia-wide coaching services – business, leadership or life, reach out HERE. My passion is your potential!
