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newbie advised not to quote

     
4:34 pm on May 1, 2003 (gmt 0)

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A marketing consultant advised that I never quote a project. Instead, the advice is to say, "I can do X, Y, Z for you. What is this worth to you?" However, in my experience, whenever I have asked a similar question, such as "What is your budget for this project?" I get the narrow eyes and tightening of the mouth reaction. I have even seen a hand tighten by reflex into a fist. What is the savvy way to approach money up front? My region is mountain states, USA.Thank you.
5:00 pm on May 1, 2003 (gmt 0)

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Walk quietly, and carry a big stick...
5:13 pm on May 1, 2003 (gmt 0)

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For all of those American Historians out there, it should have been quoted as:

Speak softly and carry a big stick...

If the work is worth doing, it's worth getting paid for. So ask for the money and if they are reluctant to pay - go find the big stick!

5:18 pm on May 1, 2003 (gmt 0)

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I think the biggest problem is clearly defining scope of a project before issues of money are discussed. I occasionally face a situation, in fact as recent as yesterday, where a potential client explained to me a desire to have me build a website for a mortgage broker.

No problem I say, when you say website, what did you have in mind? Is this simply going to be a sort of online brochure or will it require additional functionality?

He replies something to the effect of, "well, we're not sure exactly what we want, we think we would like to collect name address and social security number and with that information return a mortgage rate. Either it would e-mail us the info and we send a quote to the customer or we could do it dynamically."

OK... sounds great. I say...

before I could continue, the next question out of his mouth was, could you give me a ballpark on what this will cost?

I sort of stumbled and said, you know, why don't you determine what you are looking to spend and then we can devise a plan from that. I'm just not comfortable throwing around figures without having a handle on what the project really entails. I think if I did it would lead to disappointment for one of us.

then the conversation ended and I haven't heard back from him since. I suspect, he got that same feeling of rage when I suggested developing a plan off of his budget.

The problem is, the question of how much will it cost without definition of scope is tatamount to asking how much for a house. I think I want a house... how much is that gonna cost?

Tough question to answer, even tougher question to be tactful in response to.

So in response to not quoting, I would say no to quoting, but I've been having a hard time as well figuring out where to start.

A collegue told me that she sells a hompage with a set price and then her foot is in the door and they can define price and scope as they go.

I'm really thinking about trying that.

5:48 pm on May 1, 2003 (gmt 0)

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More often than not, people who ask for a quote actually want a quote. And if you don't give it to them, they keep asking until someone will give them a quote. I always give a quote to the best of my ability and make sure it is clear that is an estimate based on the information I have from them. My closing ratio is pretty good - I know I don't lose gigs based on my quotes anyway.

I like your friend's idea about a set price for a homepage. I think that is really a bright way to establish some rapport, and get an idea of what actually will be involved with the particular client, and website.

5:54 pm on May 1, 2003 (gmt 0)

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I lose confidence in a firm that is quoting a service before they ask enough questions to establish what my needs are. This is particularly true in an area like web design, where you can get a web site done for $200, or $200,000.

Service buyers DO want prices, but I'd recommend holding off on the quote until you have a good understanding of their needs and expectations.

6:41 pm on May 1, 2003 (gmt 0)

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Hi all

I kind of like the idea of the homepage too, getting your foot in the door.

Your there, you can keep working and building on your prospect. At least they WILL expect to hear from you regularly

Yes, I like that idea :-)

9:34 pm on May 1, 2003 (gmt 0)

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The potential client called today. He says he is "very disorganized" and thus needs to see things, and make changes, before he is satisfied. He wants to have a meeting. He has a rough draft of his copy and what he would like to accomplish. I've worked with this type of customer before in print graphics, and know there would be tons of rework. So my next challenge is to get a fair price for what could be a rollercoaster.
10:41 pm on May 1, 2003 (gmt 0)

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Okay Guys,

This is marketing 101. Get them hooked and convinced and then make em pay! Does anyone want to work for a client for free - excluding me!

11:57 pm on May 1, 2003 (gmt 0)

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The potential client called today. He says he is "very disorganized" and thus needs to see things, and make changes, before he is satisfied.

Use a series of questions to get him organized.

Ask him to search for websites that would be most similar to what he wants. Then take it to more specifics from there.

AW

7:54 am on May 2, 2003 (gmt 0)

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Ok guys just a question don't you ever ask to meet them before giving them a quote?

When I receive call from potential customers asking for a quote I always say that it greatly varies depending on what they want their website to do, the functionalities, and also additional services (hosting, SEO etc...) so I could give them a price bracket (starting low, ending high), but then add that if we could meet we could define the project closely and I could send them a definitive quote the same day.

Ok I was lucky enough to have only customers calling from not too far away (and the UK is not as big as the US) but meeting a customer gives you an edge I think - they can put a face on your voice and it gets 'personal': you can see their company, have a chance to meet the person that will decide on what the site will end up looking like, the kind of stuff that should have an impact on the design and 'feel' of the site, the kind of stuff that don't gets to you over the phone.

Then what I do, if they're not sure of what they want, I do a search and select 10-15 URL from sites with various GOOD designs (from their competitors or not), and stick 3-5 URL's I did (will save me time if they like these - just have to change the color scheme and tweak a little the original file), and then build up from there.

They then come back to me saying: I like the navigation from this site, but not the design; the colors and way pictures are shown on this one but not the products description etc etc...

Also check this from AlphaWolf about competitors asking for a quote:
[webmasterworld.com...]

Leo

4:24 am on May 3, 2003 (gmt 0)

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Ok guys just a question don't you ever ask to meet them before giving them a quote?

That would be limited to within a certain area. Even when I've had clients within meeting range most decisions have come via phone or e-mail.

It really helps if the person has a few sites bookmarked they want to use for inspiration...maybe just the colors or navigation or font, etc...

IMO it's also best to limit the choices you show to a client. meaning, better to have 2 or 3 mock-ups in your graphics program as opposed to 5.

After all, they are paying for our design sense if they picked us and we should be able to steer them in the right direction.

To the original poster- I think as a professional you should be prepared to offer an estimate.

I think it's fine to ask if they have a specific budget. Some companies (even small ones) may allocate a % of advertising/marketing budget to Internet expenses.

If they are looking for how much something will cost before they figure how much they want to spend, take them on a tour of sites you've done...or go over sites they like and explain what you can do and give rough estimates.

Yeah- it's a run on sentence...but I'm American. We have the right to butcher the English language! :)

Regards,

AW

4:55 am on May 4, 2003 (gmt 0)

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Ok guys just a question don't you ever ask to meet them before giving them a quote?

I consult in a different marketing field that might get me 1-2 big assignments in a year and I have found that SEO fills in the gaps nicely. I no longer build web sites because I tried it at the low end and was tired of dealing with self-made people who enjoyed getting a yard for my inch. Interestingly, I am in Australia while my clients are in the US. The other day someone was looking for a SEO in my city but he didn't bother replying to my email.

In this industry, results speak louder than words, so it is easy to speak by phone and swap URLs to make a point. Yahoo's IM has a voice chat feature that works with my firewall, whereas I can't get MSN Messenger to do likewise, and this works out free for both parties.

I start with a very small, low-risk job, e.g. an evaluation or critique for US$60-$100, payable half with the order, half on delivery. One of these has led to a week-long assignment and they're asking for my annual rate. :)

- Ash

3:48 pm on May 4, 2003 (gmt 0)

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In this industry, results speak louder than words, so it is easy to speak by phone and swap URLs to make a point.

Well, that's cool, but unless you have a link to your company on thier site- how do they know you actually worked on it?

Do people usually take your word or ask who they can call at each website to qualify your statements?

Yes...you see under 'blue widgets' That site at #2 was at #35 3 months ago. Send me your money now, thanks. :)

AW

4:06 pm on May 4, 2003 (gmt 0)

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One useful negotiating tip that might help.

If you have quoted a price and they start to haggle NEVER reduce the price without also reducing what is on offer.

If you just drop your price, you give the impression that you were trying to overcharge.

You are better off explaining that the quote is correct for the work specified, but if that is above their budget you can prepare a lower quote, based on less features, fewer pages,lower SEO package (or whatever).

It starts the relationship off well if you train them to understand pay more/get more, pay less/get less.

5:03 pm on May 4, 2003 (gmt 0)

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4 eyes,

I think that is VERY sound advice!

I have always done it that way - unconsciously - and it usually resulted in long term relationships!

m

4:56 pm on May 13, 2003 (gmt 0)

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Another school of thought says that you could put together a "menu" of pricing, which kind of assembles a quote for you on the fly...

Here are some stupid figures...
HTML initial page $20 (includes design)
HTML additional page (for each) $5
Dynamic page $10
Content managed page $40
Shopping cart (first 20 items) $35
Shopping cart (add'l 20 or part) $20

Please ignore the $$ figures they just serve to demonstrate the point. If you do the homework and calculate what you want for each aspect of your work, coming up with a quote on the fly is quite simple. If the client doesn't know what they want you could even provide them with a copy of the pricing and let them decide what they want to have and how much to spend.

This very open approach can pay dividends and you can load or discount the pricing in your pricing structure as you see fit, but at least this menu concept gives you a ballpark figure to start with.

Personally I think a client does not want to listen to a load of fumbling around as you try to establish how much money they have to play with. I know it makes some sense, but somehow it comes over like the opening lines a person would use when trying to calculate how much they can take you for.

7:06 am on May 22, 2003 (gmt 0)

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Agree 100% with 4eyes.

Also I find it helpful to take 3-4 discussions with the client before giving a final quote.

First discussion is usually of very general nature and the clients themselves are not very clear of what they want .. they are looking for ideas and suggestions and want to know the possibilities etc .. so I talk in terms of rough estimates and ranges both in terms of time and money.

As discussions become more specific .. so do ranges. Final quote is only after I feel its more or less nailed down within 20% margin of error or so.

7:33 am on May 22, 2003 (gmt 0)

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A marketing consultant advised that I never quote a project. Instead, the advice is to say, "I can do X, Y, Z for you. What is this worth to you?"

I think when this trick works .. it is used in a more subtle way .. and probably not advisable if you are new.

It can get you more than what you would get based on amount of work... but only if you are experienced enough to handle it well and I guess you almost know when you are there.

Also it will work in situations when you approach a client and tell her if she is willing to pay you X amount of dollars if you save her 2X per annum (or help her earn an extra 2X per annum)...and then proceed to explain how a you can build a website which will do it. It will not work when she approaches you with a requirement of a 10 page website with a list of all that she wants on them.

5:43 pm on May 23, 2003 (gmt 0)

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There have been many excellent suggestions here, but as business people and webmasters, the best approach is simply having several approaches refined to use.

It is very simple to know that every good approach will not work on every customer, this is always true, but you can follow guidelines.

One of the major guidelines that I follow is quite simple, I do work which is efficient and stable, I expect to be paid for the services I offer. Any self respecting client also knows that to get good work, you have to pay, and they are rarely afraid to pay a fair price. The secret is simply showing them how your price is in fact fair.

Another bit I frequently use is the simple approach of telling them: "We can do anything you want, it is simply a matter of time and money." By telling them this, I am in a backwards way, fishing around for budget information, or cost expectations. However, back to point 1, for the services it should be a relatively clear price scheme, your work is work $XXXX and regardless of their budget that should remain the case.

2:14 pm on May 24, 2003 (gmt 0)

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Hmmm, well, I don't know if this is helpful or not, but when someone approaches me and says "I want a website", I say, "that's great! What do you want your website to do for you?" and we go from there with a series of Q & A until I have a rough idea of their needs and desires (two different things).

I've gotten pretty good at estimating my time, so at that point I say "I can build your professional website that does a, b, and c in X hours. Including one set of tweaks, let's call it Y hours. My standard rate is $75/hr, so let's set the budget at Z dollars."

Doing this allows me to weed out the people who don't know what they want and are really not ready to buy. It only takes about 10 or 15 minutes to ferret out their wants, and I've never lost a job this way. Sure, sometimes people say "gosh, I don't want to spend that much", so at that point we start pulling items out of the cart until we get to the figure the customer is comfortable with ("ok, well how about we forego the complex flash intro with the 25 image slideshow of widgets and original score, and go for a plain HTML page with a .jpg widget montage?" etc).

Hope that helps,

Chris R

9:39 pm on May 24, 2003 (gmt 0)

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I get the narrow eyes and tightening of the mouth reaction.

Yea, you have to be careful in the beginning because you're setting the tone of the whole relationship. I always tell clients that cost is just a function of time. My hourly rate is fixed, so really everyone gets the same rate.

And if they don't want to reveal their budget, fine. Just ballpark them - it's a great screening opportunity for both sides. (Do you really want to spend two hours meeting with someone, and four hours working on a proposal just to find out they really can't afford the site they are asking for?)

I've found that most clients need you to tell them what they need and what to spend. You won't get their trust if your pricing isn't fair.

10:16 pm on May 24, 2003 (gmt 0)

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A marketing consultant advised that I never quote a project. Instead, the advice is to say, "I can do X, Y, Z for you. What is this worth to you?" However, in my experience, whenever I have asked a similar question, such as "What is your budget for this project?"

Defining services (packaging, features, benefits, and price) is difficult because you limit yourself to a fix group of potential contracts.

However, the "all singing, all dancing" be anything and everything to everybody is even more flawed, in that vague specifics produce less.

The best of both worlds... vertical pricing (as suggested by 4_eyes) and as you develop new contracts beyond your core "fixed services" you should be always adding new service packages to exapnd your market penetration.

Most people do not know precisely what they want > thus they look for specifics to help define what they can live with.

In the end, the more specific you are... the more profitable you are.

Every deadend lead that you get from "I can do X, Y, Z for you. What is this worth to you?" reduces your profitablity.

The "specifics" provide only those the are serious about hiring you.

10:51 pm on May 24, 2003 (gmt 0)

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There's really only 2 reasons why people don't buy;
-The product is no good for them
-The cost isn't!

Getting an agreement after you have demonstrated a point, is very powerful, "So, does that make sense?", "Is that ok?", "Are ya happy with that?"
If they're not, then you can tackle it before ya move onto the next point.
If they say they are, then ya know they can't use it as a reason not to buy later...known in the business as a trial close.

By the time ya get to asking for the order, there is only one possible hurdle to overcome (in theory) as they've been happy with all the selling points so far...and that is, the cost!

...but at least you know it's just that, so to qualify them before movin for the throat, "So you're happy about everything else, it's just the money side of it is it?" <Snuff 'em out for any last minute hidden mutants>

If there *is* something else, then ya need to make a mental note of it and be sure to cover it in your next pitch, so you're not caught again in the future...but anyway, you answer it, then repeat the above again.

Once down to price, well, if you've already built in 20% for such eventuality, then you can move down, or ask for their thoughts on what they had in mind.

Generally, they're never really *that* far from your price if you're within average market boundaries, "Well if we can wrap this up today, can we meet half-way on the difference and I'll grab your domain name and get crackin as soon as I get back?"...Or, if the job is meaty, "I'll throw in ya domain name and hosting as well?"

Unless it's a simple brochure site, one should try and set up at least 2 appointments, one for the fact-find, one for the real pitch when you go through the above. If they try and lock you down for a price at the first meeting, or when you're not prepared for it, just ignore it with a, "...umm let's see, will you be supplying your own logo or do you want us to create one for you...", or similar questions.

Remember, he who asks the questions is in control of the conversation - Something people have trouble in believing sometimes but if you have a structured series of questions you are in effect directing the flow of the decision-making procedure and conversation.

11:17 pm on May 24, 2003 (gmt 0)

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Remember, he who asks the questions is in control of the conversation - Something people have trouble in believing sometimes but if you have a structured series of questions you are in effect directing the flow of the decision-making procedure and conversation.

Excellent point TheWhippinpost!

Although your first point I disagree with.

There's really only 2 reasons why people don't buy;
-The product is no good for them
-The cost isn't!

1. the product is what they were looking for (and therefore of use to them), thus if they pass you by > then either the information is conveyed wrong or you simply have a inferior product to the potential customer's thinking. (This can also work the other way -- a superior product well beyond their specific needs).

2. If cost is an issue > (and always an issue) you are probably targeting the wrong market.

Quality "of"... is "normally" directly proportional to cost "of" and most people understand this methodology.

This is also directly proportional to available information... more "cost" the more you will need to convey "why"?