We often come across people using words quote, estimate and proposal interchangeably. But when it comes to negotiating over some terms or conditions, you need to be clear about which title to use and when. When your clients demand a quote, they will be extremely disappointed in you if they instead receive an estimate or a proposal. So let’s put an end to this confusion by discussing the widely accepted definitions of each.
A quote provides a rough approximation of how much you’ll charge your client for providing any product/service and isn’t legally binding. It specifically includes the cost of all efforts you offer to put in for completing the job over a pre-defined timeline. Quotes are usually short lived since the price rates keep fluctuating when you’re running a business and you need to keep updating the prospects with the latest and re-verify the terms upon which they agreed before starting your contract.
When we quote in daily life; we mean those words to be an exact representation of what someone else said. Same goes with the clients, even if it’s only subconsciously. Once they accept the quote, you have to complete the work as detailed in the quote and at that price. Osmos Cloud’s quoting feature enables you to create a quote of client’s choice in no time, increasing the overall chances of its acceptance.
Estimates play their role when your client demands a ballpark figure to be shared. They’re offered for such services where you wish to account for variables. An estimate usually exhibits a rough idea of your service package and unlike quote, it’s highly negotiable. It’s understood by both parties to be subject to change, once you jump into further details of the project.
You can easily make an estimate in line with the client’s expectations and make it work wonders. If you’re not concerned about the role of precision in winning the business, estimate is your thing to go for.
Proposals are mainly the long documents used by businesses (such as marketing agencies, consultants) where they explain the entire project, process, scope, and price, etc. It’s is an extremely detailed workup of how much a project will cost a client and is submitted as a part of the competitive process to win. It’s usually written when a prospective client requires more information and persuasion about your capability and how you can meet their needs.
You can be on track of taking your business to new heights by showcasing the value you can add to the client’s project through a well-structured proposal, including examples and testimonials of the past work to gain trust. Proposal is considered to be the most comprehensive version of an offer and is an amalgam of all the details present in your quotes and estimates. While a proposal is not binding, it’s usually considered as an ‘agreed upon contract’ once accepted by the client. From here, the project will usually begin on set terms. A company that is detail oriented and aims to come up with a clear-cut proposal outruns the competition only focused on their usual old-fashioned way of doing business.
Importance of rolling in the write document
Despite the overlap, you need to understand that quotes, estimates and proposals are not the same at all. As you can clearly read above, each type of document has a unique role and function and knowing the difference is extremely crucial to the ultimate success of your business. It’s important that when you submit any of these to a client, you take the time to understand what they’re expecting to receive and why? So that when you’re asked to deliver a quote, you’re not delivering it based on what you think, but on what the client demands.
A practical and consistent outreach strategy can help minimize the frustration and confusion that can come along with creating bespoke deals with customers. And to get this right, why not try Osmos Cloud. Click here and start your free trial period for amazing quoting features and much more!