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Profit & Growth Tips for Digital Agencies

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How to Provide More Accurate Project Quotes

Posted by Laura Hernalsteen on May 4, 2016

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Good customer relationships are vital for the health of your agency, and every customer relationship starts with the same thing: pitching for their project.

Your agency’s project quote can be the difference between signing or losing a customer, so to maximise your chance of success you want to make sure your quotes are as accurate as possible, to improve your agency’s reputation for being reliable with your pricing, as well as being good at what you do.

Why Is It Important that Your Agency Provides Accurate Quotes?

There are two major benefits for your agency if you are providing better, more accurate quotes:

1) Improved Customer Relationships

Your customers will know that the amount you quote them for the work you’re going to do is what they will end up paying (assuming there’s no unforeseen hold-ups or problems). This builds the customer’s trust in you and your agency, which is vital for a good and hopefully long-lasting relationship.

2) Better Agency Forecasting

Providing good, accurate quotes will be beneficial to your agency, as well as your customers. It means you can more accurately predict your upcoming workload and identify peaks and troughs, and will also help with cashflow forecasting as you’ll have an accurate idea of your income from upcoming projects.

5 Things Your Agency Can Do to Improve the Accuracy of Your Quotes

1) Get as Much Information as Possible Upfront

In order to provide a good quote, you need to understand the scope of the project you are pitching for. You need to have a clear understanding of the resources that will be required, in terms of number of employees, necessary skills and skill levels, time and equipment.

This is why some agencies take part in roadmapping or strategy workshops with the customer before quoting for a project. While it’s not always feasible due to the extent of non-billable work it would involve, these are a good way to understand the project – although you also need to bear in mind that the project will inevitably change once you start working on it!

2) Understand Objectives and KPIs

How will your customer measure the success of this project? Understanding this will help you work out the customer’s real objectives, and how they will measure the return on investment of the project.

This will put you in a better position to align the work you do on the project with your customer’s priorities and main objectives.

3) Understand Budget Before Features

Once you understand your customer’s budget, you need to align their expectations with what they can afford.

If you know how much they are able to spend, you can fit your proposal to it, rather than coming up with a bunch of features that the customer loves, then finding out they can’t afford it, and then agonising over what to cut to bring down the price.

4) Set Customer Expectations

Your project quotes need to clearly define and set expectations of the outcomes of your project in terms of its scope (both in time and deliverables). While it’s likely your customer’s expectations and requirements will change during the course of the project, you need to be clear from the outset that if your deliverables dramatically change from what you identify in your project quotes, this will incur an additional charge.

Setting and managing customer expectations will help prevent project scope creep, and have the added benefit of making your customers less likely to challenge your invoices upon project completion.

5) Know Who Will Be Working on the Project

Having a good idea of which of your team members will be working on the project will help make your quotes more accurate. Having a clear understanding of the work involved will help you to match your team’s skills to the work required, so that you have people working on tasks best suited to their seniority and skillset. The more senior or specialist members of your team will provide more value and so you would reflect that in your project quote.

You also need to be sure that you have appropriate people available to work on the project at the time the customer wants the project to start. A resource management tool such as Scale will help you assess in advance the availability of your team members, by showing who’s working on what projects and when those projects are due to finish.

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