We find ourselves in this situation quite often when a customer calls for a quote – as a business owner we are obliged to serve every call we receive even though we may guess the caller is just shopping around or a competitor and wants to get an idea how much we charge for the same product or service.Every job is different and there is no fixed formula, however most of us go with the material + time combination and work out the price by the adding up the material cost and hourly rate.When the customer gets the price his reaction often is “But I can get cheaper somewhere else” or “This is way too much and/or doesn’t fit within our budget” and so on. At this point in time we find ourselves in a tricky situation and we need to ask ourselves whether we should say “Sorry but this is the best I can do” or should we say “Ok I will match the price” and give a discount or revisit the quote?Every business is different and most of us learn this with experience. It also depends on the type of work or service we provide. The following are a few tips we can use to decide whether to say “No” or “Ok”
1- Future referral
It is important to gauge whether the caller is an important lead or it can be used as a reference point for sales and marketing. If the caller has a wide network or represents a networking group or an organisation where we would like to get our foot in the door, we should definitely consider giving a discount.
2- Time of the year
We all have targets and need to meet the quarterly or yearly deadlines, so if you find yourself in a situation where you are little short of meeting a sales target for the financial year then it is worth giving a discount and finishing high in the books.
Location is another important aspect. If your are operating in an area and want to expand to another location and the caller is from the new location then it is a good opportunity to expand your reach and give a discount to secure the job.
One should always calculate the odds for the job, for example material shortage, location, weather and other external aspects, caller personality, past experience etc. If the job poses a great risk then it might be worthwhile not to get involved.
There are plenty of other points to consider when quoting, however above are just few quick tips to help you out.
YZM Technologies is a Perth based Software Company specialising in building custom software, databases and mobile apps and helping small businesses achieve better results by optimising business processes.