The Art of the Custom Sales Quote

Rows of model homes in an array of colors to show a radius

For service providers who specialize in custom services, cost estimation for a sales quote is a real challenge. When you’re providing a quote for the full scope of the project up front, you have work to do in order to make sure you know what the project will entail.

Sales teams in many fields assume the added costs of pre-sale site visits, such as equipment installation, construction, and interior design. In these same industries, deciding to pursue a lead often means bidding against a list of competitors.

Walking the line between properly accounting for everything that could happen and keeping each bid competitive is a balancing act.

Tips for Walking the Line

Though you’ll never win them all, there are ways to mitigate the costs and risks associated with each quote you send. 

Tightrope walker balancing on the rope

Before you start your next quote, consider these three steps for figuring out your final number.

1. Find Your Estimate Framework

Is this project similar to one you did last quarter or is this unlike anything you’ve done before? Whether you start with a previous quote as a reference point or sketch it from the ground up, understanding your estimate framework helps you quickly find your baseline with as little effort as possible.

To many teams this means copying a previous quote, launching a quote from a template you’ve created, or even building an estimate from the ground up in your costing solution based on the needs of this project.

2. Evaluate the Biggest Risks

If you are basing this estimate off of a previous quote, it’s important to revisit how that project did at the end of the day. Is there anything from that your team learned that you should incorporate into the new estimate? Are there any other lessons from similar projects that you should factor in?

Engineers discussing project plans with computer

Beyond that, what are the biggest risks associated with this project? Are you concerned that you might need extra materials? Are there a few different client contacts, each with a different personality?

Some elements of the project may have higher levels of risk than others. By factoring in some contingency on the cost side, either for an entire project or for each individual category or cost type within a quote, allows you to take uncertainty into account. Create a process for factoring in risk that is separate from your target margin, so you can scale assumed costs on the area of the quote that needs it without pricing your company out. 

3. Dial in Target Margins

Does your team handle materials, labor, and outside service costs within a single sales quote? How are you factoring in your target margins for each of these types of costs?

Do you know what your overall target margin is for each quote before you send it? If you do, you have a much better chance of being able to assess whether or not you hit the mark when the project is complete.

Before You Hit Send, Review Your Terms

Not even the best engineer or project lead can predict everything, and pre-sale quoting is a game of spending time frugally to begin with. Make sure that your team is covered in the event that new discoveries are made after kickoff.

Encourage team leaders to talk about new discoveries and changes early and often. Not everything that gets called out will be billable, however, knowing what your team is discovering about the project along the way can be invaluable for planning the next one.


Is the Cost of Estimates Getting You Down?

We’re here to help.Tell us what’s going on with your team and we will share some suggestions on how you can reduce the cost and risk associated with your sales quoting process.