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Why You Shouldn't Just Give a Quote to Potential Clients

[digg=http://digg.com/educational/Why_You_Shouldn_t_Just_Give_a_Quote_to_Potential_Clients]Can you give me a quote for this project? If you’re a freelancer, you probably hear or read this statement almost daily. What’s your response like?

a) It’s $X,000; or

b) It would cost around $X,000 to $Y,000; or

c) I think it’s best that I meet or talk with you first, so we can discuss what your needs are. What is your budget for the project?

I’ve used all three approaches for a variety of projects. Although responses (a) and (b) have their place, I’ve gotten the best results from variations of (c). More often than not, quotes haven’t really worked for me or my clients, and here’s why…

It’s incomplete. Your quote is just a number. Your clients can’t surmise all the information they need from that number. Apart from the primary services you provide, you should also give them your advice. Oftentimes, what a client really needs is different from what they think they need. In this case, an assessment of a client’s business and project, followed by a proposal, is the better approach.

Sometimes, when a client wants a website redesign, they mean they want something more pleasing to the eye, or something in a different color, or a copycat of another website. But will this really work for them? You need to make suggestions – you’re not just a service provider, you’re also a consultant. For this, it helps to reference some statistics or case studies within your proposal so that your clients know that your ideas are quantifiable. These things aren’t included in a quote.

If a potential client insists on some numbers, then give them a very wide range. Let them know that these numbers aren’t concrete and that there are several factors affecting the final price. Offer to discuss it with them better so you can give them the best value for their money.

It’s vague.
When a client asks you for a quote, especially a new client, odds are you’re not talking about the project in the exact same way. For example, they don’t know how many working hours it will take and you don’t know what results they expect.

A proposal defines the project in black and white. This makes proposals just as important as your contract. Whenever you or your client are in doubt about the scope, expected results, or objectives of the project, you’ll always have the proposal to consult.

It sets expectations. Some clients look at your quote and think that it’s all they’ll ever have to spend on the project. When they ask you to do an additional task you haven’t factored into the quote, they might be disappointed that they have to pay extra. A proposal breaks down the costs of each aspect of the project, showing your client exactly how each dollar is spent.

Since a quote is incomplete, vague, and sets expectations, it may lead potential clients to a largely uninformed decision. Most clients need – and even appreciate – being informed about the stages, costs, and requirements of a project.

When does a quote work? A quote is simple and straightforward, and it works on an equally simple and straightforward request. This includes scenarios like a request to write a 700-word movie review, resizing a banner you made for a previous project, or installing a widget on your client’s blog. A quote can also work as part of a response to an ad – provided that all the necessary project specifications are already listed and outline by those doing the hiring. However, for larger projects involving several stages, a proposal is best.

In the end, it’s up to you to choose between a quote and a proposal. They each have their own benefits and their own disadvantages. Just remember that the next time someone emails you requesting a quote, ask yourself if a proposal is better for this situation before you hit the “Reply” button.

How often do you use proposals? Do quotes work for you?

25 Responses to “Why You Shouldn't Just Give a Quote to Potential Clients”

  1. I totally agree that while a ballpark is in order to save both sides time, only after a thorough discussion can the budget and general expectations be set.

    We, at oDesk often receive complaints from service buyers and professionals providing the services for them, unhappy with the progress/results of their projects – and in most cases it all roots back to not having discussed the project properly.

    I hope you don’t mind me including a link to your post in our community forum – it will be so useful for a lot of our professionals.

  2. @Peter: What your interested in spending won’t change what we charge – we charge for our time. What it does is indicate how long we can spend on the project, and what services to offer. As a poster above mentioned building a website isn’t ONE simple job, I could build you a site in a day or take all year. Changing oil is a v.bad analogy (For a FULL site build.)

    If you someone asked YOU to quote to build them a house what would you say? Do ALL houses cost the same? Or would you have questions about what type of house they want? Hey would an idea of their budget give you a better idea of what house you could offer?

    Jesus half the time its do they REALLY want a house – we’ve built MANY sites were half way through it turns out they needed a 20 story office block not the bungalow they requested.

    We only do option C (giving a rough ballpark to save timewasters/those with stupidly low budgets) – and I’ve learned the hard way those who are only interested in the lowest $$ aren’t worth working with.

  3. For all of you that are saying that option C is our way of finding out how much we can scam someone for; that might be right in very few unprofessional cases, but in most cases we are qualifying them. If my product is 15,000$ and there budget is 3,000$ then we know that we are wasting time and to move on to someone qualified! If you are a professional salesperson this is only a qualifying tactic not a scam!! Option C is the way to go.

  4. @Peter: “Can you imagine taking your car in for an oil change and having them ask you, what’s your budget to get this done?

    Certainly not, but you’d never go into a mechanic and say “It’s making a funny noise, how much is that going to cost me to fix?” without getting a look under the hood. This is the consultation process.

    I don’t tend to ask a client’s budget unless I really can’t get a read on their local market or technical savvy (some people understand the cost of a quality website, some don’t). We have solutions for almost any budget, and we need to know if we should offer custom code or prepackaged thingamabobs.

  5. I wish I had such clients who know exactly what they want and how they want it…

    Actually when project is big there are a lot of options of how to get it done (for example, building from scratch or customizing some available script). So if someone wants to save money the best way is to say about it.
    There is an old Ukrainian proverb: “Cheap fish makes bad soup”… I think that it’s better to pay more to developer you trust when you have a big project. It will definitely pay off.

  6. Peter

    @Eugene – “Just imagine a client who comes and ask to make him a great car.” I agree in this case that’s not enough information to go on. But if the client said, make me a car, it needs to be able to go this fast, have this much horsepower, this type of suspension, etc… (they know what they want) then there is no reason to go the budget route.

    I’m not opposed to meeting and talking about the project with a viable vendor. But I still fail to see how much I’m interested in spending has any effect on how much you’ll charge.

  7. @Peter: “Can you imagine taking your car in for an oil change and having them ask you, what’s your budget to get this done?”

    This is a good example. I agree with you, but only in situation when project is small. Just imagine a client who comes and ask to make him a great car. How should I do this not knowing what exactly he wants and what is his budget?

  8. John Waller

    In my experience, if they’re not interested in Option C, they’re usually tyre kicking. More often than not, the job goes to their nephew or wife.

  9. I’ve found that clients who hate Option C frequently (so, doesn’t neccessarily apply to you Peter) think they know more than they do about what they need … red flag?

  10. The problem is that so rarely are projects done line-items like you describe, Peter. Sure, if it’s one specific task, I see your point, and charge accordingly.

    But most times, it’s not one task. There has to be a pre-meeting as clients are usually very unclear about what they want at first meeting – and reasonable, mutually understood expectations are not made on just a price.

    I can’t tell you how many times I’ve gone to meetings because a prospect “wants a website” or “wants a podcast” but doesn’t know how big, what the point of the website is, who the target market is, where they’re going to host it, who’s going to host it, who’s going to write the content that goes in the site/podcast, do they have a logo, etc. etc. – most clients do not think about these details that are critical until prompted.

    I think back to a few years ago when we took a job like you said, phone call, price in an email, client didn’t want to meet. I outlined clearly that the package included four microphones for a podcast, but no wireless mic as the client didn’t want to pay extra.

    We get to the job, set up – an the client goes, “where is the wireless microphone?” She stood in disbelief as I showed her the paperwork she signed saying she didn’t need it. Client still blamed us for their error, but that’s life.

    A pre-meeting would of avoided that because I could of explained what a wireless mic is for and how it’s used, and it might of connected that the little bit of extra money at the time would of saved lots of headache and extra charges for us going back and getting gear they had said they didn’t want.

    You, Peter, may be the perfect client and write detailed RFPs/RFQs, and have a perfect handle as you may be experienced. There are clients like that, for sure, but they are few and far between, even at large agencies.

    Most do not – even companies that do write RFPs or RFQs are missing critical information to determine how much of something they may need.

    It’s not that we’re trying to game the system – it’s that we need to know how much of something is required so that you can be properly serviced and walk away a happy customer.

    If anything, 4 of 5 times, the client pre-meeting LOWERS the end price of the job because I can take things out or modify to fit their specific needs.

  11. Peter

    I still don’t see how any of you can promote option C.

    Unless you are trying to work me, there is absolutely no reason that my budget should have any effect on how much you would charge to do the work. Can you imagine taking your car in for an oil change and having them ask you, what’s your budget to get this done?

    Everyone should charge a fair price for what they do, and let the buyer decide if it’s a good fit for their needs and budget.

  12. A hard topic to fully understand, what with nuances and best value for all parties involved! Strange how the fair market value for a good or service can range far and wide instead of being a narrow range that both parties can benefit from without feeling used and abused.

  13. I normally try to get enough information to be able to give my clients a range prior to spending a lot to time drilling down and determining how I can benefit a company. I also like to give them a range to make sure that I am not going to waste my time on a client who can’t afford me. I feel that once they are comfortable in my price range for their needs I go through a round of meetings/phone calls to flesh out the project requirements and try to determine what else I can do to help my client. Using this approach I keep from wasting time on people and spend more time helping my clients.

  14. Spencer

    Asking about the budget definitely sets off my trust alarms, as a previous poster noted. Too many consultants are just seeing what they can hit you up for.

    Go with the honest answer:
    Without more information, it is hard to give you an estimate. We could sit down for a half hour consult to define the project better, for which I would charge $X, after which we can determine what my price would be for the project. (Optionally: If I get the project, I’ll waive the consult fee.)

  15. C is definitely the best option, but the concerns about budget naming are definitely valid. That’s why you often don’t need to have that conversation until the very end.

    The best point of the article is that often clients don’t really know what they need, and it’s your job really to tell them what it is that they need. They have come to you for help in your expertise, and you should give it.

    If you come up with a solution that is out of their budget, you can always scale back, but knowing what are the most important factors allow you to keep your focus on the important stuff, and give a solution that matches both your needs as a provider and the needs of the client.

  16. Option C is the only sensible way for a complex or multi-part project.

    @Peter – I understand where you’re coming from, but how can someone give you even a ballpark figure without understanding fully what he’s bidding on? To me, preliminary number projections are often based on false assumptions and lead to budget-wasting work. Why not choose a handful of vendors whose work you like or that come recommended by friends and invest the 30 minutes each discussing the project?

    As a web and graphic designer, when I ask what budget a client has for a project it tells me what I can afford to offer them. If a client doesn’t have a pre-set budget that’s fine too, but that initial discussion is then even more critically necessary for both sides to come away with a better informed ‘ballpark’ range.

  17. @ ozofeliz: I often want to hear the budget, not because I’ll limit myself to that, but to get a better idea of how the client values my work. I’ll probably offer them the best value for their money, which doesn’t necessarily have much to do with their budget.

    @ Peter: Re: contractors taking advantage of the budget. Not necessarily the case. I’m not saying it never happens, it probably does. It just solely depends on the ethics of the contractor and the client’s ability to catch a BS-er when he sees one.

    @ dtj: Keep in mind that you’re also selling yourself and your team. You shouldn’t give too much away in the proposal and your client has to know exactly what unique skills/experience you bring to the table – so he/she won’t go anywhere else. It’s about selling value, and if your potential client doesn’t see that, they’re not worth working with.

  18. What about “It’s a great plan for a cheaper competitor”? If you are good and thorough, you are providing a free plan for a low-balling competitor.

  19. Peter

    I HATE it when people use option C. It seems to imply that you’re going to charge me whatever I say I’ll pay, even if you would do it for less.

    Sometimes I know exactly what I’m looking for and just want to see what you’re charging. If you can offer additional value, then I might pay for it.

    I don’t want to spend 30 minutes “discussing” the project with you when all I need to know is if we’re in the same ballpark or not. If we are, then we can talk later, but it’s a waste of everyone’s time to meet when there is no chance of the work going forward.

  20. If you sell on price, you’re not selling :-)

    I think usually it’s C – I’ve found that most times prospects who just want prices and nothing else are tire-kicking.

    All the time I get calls from people just wanting a price – and I politely turn them down if they don’t want to do at least a short meeting to get to know the person and to truly suss out their needs.

  21. ozofeliz

    well. a b or c are very bad. Never give to customer a budget before see all needs , advantages of the project for him. I normally say ” you save x hours doing this, and your process is better “, etc,etc. The customer must view all, not only cost. Talk to him. I made jobs with the highest budget. Why ? The customer trust me. If the customer only view the number in the paper, forget it.

    Sorry my horrible english.