You know the story of Goldilocks and the Three Bears, don't you?
The one where Goldilocks entered the bear's house, and ate the porridge.
And the porridge in the first bowl was too hot.
The porridge in the second bowl was too cold.
The porridge in the third bowl was just right.
Now if only your quotes for a project were just right, eh!
When you start quoting for a project, you have no idea what hurdles you'll run into. Will the job have hidden time-suckers? Will the client want change, after change, after change…after change? Will you quote for fifty hours, and end up spending eighty? How on earth can you get a quote not too hot, or too cold, but just right?
Tell your client she can save 30% of her bill…
When you say the word ‘save', the client's instantly at attention. She'll sure as hell want to know what she needs to do to save mucho pesos on the project. Tell her, that you estimate the project will take x. no of hours. And that if the project is done within those hours, the client can save 30% of the bill.
Of course, there are conditions…
The conditions are:
1) The client can’t surprise you with stuff along the way. All the resources need to be worked out before the job begins. This is to avoid scrambling and chasing people once the job begins.
2) The more changes you have to make (for whatever reason), the more time is used up, thereby reducing the amount the client can save.
3) The less back-and-forth merry go-around you have between the client; the fewer meetings etc., the less the eventual bill is going to be.
Now yes, we know you’ve quoted 30% more than any one else
And that’s good. Because despite what you believe, most clients like to get the best service—not the crappiest. We all like to buy the best cars, best clothes, and best equipment. And the more expensive the product, the more we attach value to it.
But I digress…
So yes, you’ve now got the client focused on saving the 30%
Which means they’re going to stop being underfoot; stop having long rambling meetings; stop making squillions of changes—and let you get on with zee job instead. And that’s what you want, anyway.
I know it sounds too simple…
It is simple. And just because it’s simple, doesn’t mean it doesn’t work. But you can’t just slap on a 30% premium on a quote and expect the client to be all nice and cheery about it. The client, in many a case, will have got a few other quotes as well.
And those quotes may be higher or lower
Understand one thing. It’s close to impossible to get the exact, same quote from all suppliers. Each one does a project in a completely different manner. And the quotes are going to be all over the place, depending on how the suppliers see themselves.
One supplier may be well known, and charge a premium for her fame. One supplier may be just starting out, and charge too little.
So let’s take an example or two
Let’s suppose you’re supplying coffee mugs with a logo to the client. Will every quote be the same? No, it depends. It depends on the quality of the print, the quality of the mugs, the speed of the delivery, and lots more.
Suppose you’re designing a website. Will every quote be the same? Nope. Never. It all depends on the value the web-designer is going to put into the design and construction.
So hey, it boils down to one thing…
Because just slapping on 30% ain’t going to take you anywhere. You need to justify it with tons of value. If you don’t have a list of benefits and bonuses—and more importantly—don’t let the client know, then you’ve already placed yourself in the price game, where the client chooses specifically on price.
You can think about it, or use the strategy right away
Put this simple pricing strategy into play when quoting for your next project. And you’ll not only get a very co-operative client, but also won’t have to stay up nights wondering about a cost overrun.
Or to put it another way…like Goldilocks, your porridge will be just right!
Wow. simple. awesome. THANKS!
Terry Dunn says
I reckon there is another big issue with quoting on services; confidence and self-esteem. If you don’t value yourself as much as a competitor does, you could seriously under-quote for your services. I think the huge variance in quotes for services like web design is more about confidence than anything else.
Sean D'Souza says
I agree, Terry. You need to be confident, otherwise no matter how much of an expert you are seen to be, you will always underquote.
Jef Menguin says
Pricing is one of the most challenging area in my consulting business. Thank you for sharing your thoughts.