Creating services estimates for a potential client can cause a freelancer or micro-business owner a lot of anxiety. There are so many “what ifs”. What if I quote too high? What if I quote too low? What if it’s a waste of time? What if, what if, what if! Estimates are educated guesses. Sometimes they are accurate, sometimes not, but there are other reasons beyond the dollar figure of your estimate that can prevent a customer from following through and ordering your services. Following are a few reasons your estimates may not be converting to actual work and income.
You quote too high
Perhaps the one aspect of creating services estimates that leads to more anxiety than any other is estimating the time it will take to deliver. Overestimate time and the quote may be too high and you may not win the job. Quote too low and you may wind up eating up your profits. A good sense of the time it will take to deliver the service, the costs, the market, and your customer, will go a long way to delivering an estimate that doesn’t make a prospect run the other way.
Time & costs
If you are freelancing, do your best to estimate the time and your costs based on past similar work. Tracking time is an essential part of creating accurate estimates. The time and costs tracked in past projects can help you more accurately estimate time and costs for similar jobs in the future. If you don’t have a body of past work to draw from, you’ll have to “wing it”. If you aren’t tracking time costs, now is the time to start. While it’s tempting (and prudent) to liberally estimate your time and costs, it’s a balancing act, and personal. What earnings for the work can you live with at the end of day? What are the chances this client need your services in the future?
Read “Time Saving Tips for Freelancers” to see a list of time management and tracking apps.
Do you know that others are charging for similar services in your city/state/country? This information can help you determine if your prices are competitive. Many freelancers only guess at these costs. While you don’t want a low price to be the main benefit to the customer, you should have an idea of what others in your market who have similar skill and experience are charging for their services.
Read “How to Price Freelancer Services” to get some ideas how to gauge whether your prices are competitive.
What does the potential client value? Consultation can help you determine this. Are they shopping for price, expertise, results, reliability? What moves them to make a purchase decision? An in-depth consultation can take time, but, it pays dividends if you can learn these things about a potential customer. What they reveal to you can help guide your estimate or even guide a decision to say, “Thanks for the opportunity, but, I’ll have to pass”.
The prospect was shopping for the lowest price
If getting the lowest quote was the prospect’s main concern, you may never know, and, it may very well be the reason you didn’t get the job. If they were shopping, that’s fine and expected! The lowest price, though, is only one possible factor that drives a purchase decision. During a consultation, before you create an estimate, you have a chance to build rapport, learn about the customer and their company, describe the quality of your services, your experience, reliability and the great customer service you provide. It’s a chance to weed out those that only want the lowest price. The more you discuss the project with the prospect, the more they will reveal. If they are unwilling to engage, sound suspicious or guarded, and say something like, “Just give me the cost” then they are likely shopping for the lowest price.
You don’t follow up
You may not have been awarded a contract because you failed to follow up. If you send a potential client a quote and don’t follow up, it sends a message to the customer. You don’t care, aren’t that motivated, aren’t really interested. The more time they invest in consultation with you, the more likely they are to pay for your services. If you don’t follow up, you can bet your competitors will. As the old adage goes “Out of sight out of mind”. If you don’t follow up, you are allowing yourself to be forgotten. Send the estimate and call (if possible) or email to confirm they’ve received the estimate. Let them know you are available if they have questions about the estimate or need further consultation. If in a week they still haven’t replied about the estimate, email them asking if they have come to a decision or need more information from you to help them decide.
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Your services estimates don’t have a valid-until date.
If the estimate you submit to a prospect is open-ended, they have no incentive to reply in a timely manner. If, on the other hand, the estimate has a “valid until” date and a disclaimer about the estimate expiry terms, you create a sense of urgency and the would-be customer may reply sooner. The estimate expiry date also gives you another reason to follow up. When the expiry date is near, contact the prospect and let them know the estimate is expiring soon and ask them if they have questions or need further consultation to help them make a decision. When you create an estimate in Flare, you select a “valid to” date which is displayed on the estimate. You may add a disclaimer message in the footer of the estimate, such as:
“The rates quoted in this estimate are valid until the “Valid To” date. Estimated costs may increase if services quoted are purchased after this date”.
You provide too few details
Providing too few details about the services you are quoting for is another reason an estimate may not convert. When you quote for a job that is comprised of several steps or main tasks, it’s a good idea to list sub tasks or describe the main line items so potential customers know what they will be paying for. By doing so, you are also providing a way for the prospect to compare apples to apples if they are shopping for estimates from other service providers.
You don’t provide added incentives
While a time-limited estimate is one way to nudge a potential client toward a purchase, providing a discount or free add-on service is another method of closing the deal. Following are a few ideas of offering incentive through savings or value.
- 20% discount if services are purchased by [some date before the estimate expiry date].
- 20% discount if you purchase today!
- Free “low cost” service if you purchase by [some date before the estimate expiry date].
- Pay before [estimate expiry date] and get 40% off your next purchase.
Flare’s Estimate Feature Can Help
Flare Cloud Accounting is an all-in-one small business accounting application that includes an easy-to-use estimates feature. Create professional estimates in seconds, convert estimates to invoices in one click.
Your Turn! Submit Your Ideas in Comments
How do you ensure your estimates convert to work? Let us know in the comments below.