Estimates, quotes, proposals – what should you send a prospect?
Did you know that the title of the document that you use when you offer your services to a prospective client can greatly affect whether you win business or not? Yes indeed … what you call your offer can mean the difference between a yay or nay when it comes to winning new business. So, what should you call it?
What do you give to a prospective client when you’re trying to gain business from them? Is it an estimate, quote, proposal, contract for services? Or do you call it something else altogether?
Let’s take a closer look at these and play a little game of word association. What comes to mind when you read or hear each of these?
The word estimate implies an amount that is still to be confirmed, is somewhat unknown or uncertain. Perhaps the figure presented is subject to change.
This terminology, then, often instils feelings of uncertainty and doubt. You’re essentially saying to a prospect, “Here is an amount, but it may change. We’re going to start this relationship with a bit of a ball park idea of what services might cost.”
There may be legitimate factors beyond your control that make it wiser for you to initially use an estimate. But for the client, what they may be hearing is: “Because costs may change, we the supplier, are in control; not you, the client.”
The first thing that comes to mind when I hear the word quote, is cost. My focus goes straight to the dollar amount. No matter how much compelling detail or focus on value there is, my eye will go right for the amount at the bottom of the table.
Another thing comes up for me when I hear the word quote. I automatically assume that this is one of a few quotes that I’m supposed to compare to others. When someone asks you to go out and get a quote, what do you usually do? You get three – so you can make an informed decision.
So, by calling your offer a quote, you may be subliminally inviting your prospect to go out and get a few others for comparison purposes.
A proposal is distinct in that it involves an element of asking for permission or input, and it involves two or more parties coming together to agree on something. (Not that dissimilar from a wedding proposal where an offer of marriage is made.) A proposal is a much more collaborative agreement. It’s almost like a suggestion, where you’re saying to a prospect, “This is how we suggest the relationship will work, but we’re open to your input.”
While often requiring more work to prepare and being perceived as being quite a formal document, a well-written proposal can actually be a more inviting way to begin a client relationship. It places the focus on the services offered and the outcomes we’re striving for. Rather than focussing on price, a proposal focusses on the relationship, deliverables and outcomes. In my opinion, it’s more client-focussed than a quote or estimate.
Contract for services
This one sounds all too binding and formal for my liking. I don’t want to enter into a contract with you. I only just met you. Sure, there is a time and place for a contract for services – particularly when a legal agreement needs to be drawn up. But for most service providers, this is not the first piece of communication you should be sending to a prospective client.
Not only is it too formal, it’s too presumptuous. It implies that the terms laid out in the contract are set and not open for discussion. This may make sense for a service that is quite repetitive in nature (laser eye surgery, perhaps). But not for a service like business coaching or website development, etc where there will be more customisation based on client needs and budget.
I recently met with an architect who explained to me that their contracts always include terms and conditions that they must adhere to by their industry governing body and that they are legally bound to. But to soften the blow, so to speak, they present an accompanying document called a fee proposal that is more customised and focussed on client value and outcomes. I thought this was a great idea for services where there is a lot of fine print or legalities to include – include the mandatory conditions but introduce them with a proposal that invites input from the recipient.
Of all of these possible documents, then, is one better than the others? No, not necessarily.
It’s all about knowing your audience and purpose.
These documents are actually part of your marketing materials, and the role of marketing is to move your audience – to act, feel, believe, buy into an idea, buy a product or service.
So, you need to understand your audience and their preference of communication style. Are they a numbers person or a visual person? Do they care more about features or benefits? Are they most concerned with technical specs or brand image? What is the most important factor in their decision making?
You may use another word to describe your offer of services. One business owner I know sends out a document simply called “Options”. I like this. It sends a clear message that he’s thought of a few different ways to service a client and satisfy their needs. It also highlights that there is room for discussion and revision, putting both supplier and prospect on a level playing field.
You may want to test using different terminology and see what affect this has on your conversion rate. If there is another term that you use, let me know. I’d love to hear what’s working for you and your business.