By Mark Porter
Communications with a customer is vital to the success and profitability of any job and that communications begins before you get the job and even before you get the PO. Communication for the success of a job begins with the estimate.
The communication from the customer regarding the specifications of the job starts the process and is obviously very important but the key interaction between you and your customer, that often determines the success of a job, is your presentation of the quote.
I have seen many methods of presenting prices to customers that range from simply writing the price on the original specifications received from the customer and faxing it back to very detailed letters with bold and underlined references.
The reality is that the more detail the better. Any room for misunderstanding can be interpeted by customers intentially or unintentially in a manner that results in a damaged relationship with your customer and/or you spending more money on the job then you intended.
A good quote will
1. Present a Professional Image
A good quote should present a professional image to your customer. A price scribbled on a fax not only reflects negatively on the quality standards of your company but can also provide second thoughts to your customer on large jobs.
The print/packaging estimator has to consider his accountability should this job go wrong. I price scribbled on paper will not put him in good standing to his boss when he tries to justify his decisions. Nor will it invoke confidence to entrust your company with a valuable project.
2. Clearly define the job you are providing
A good quote will clearly define the components of the job. The number of pages, bind type, fold/glue configuration, color of foil, type of rule etc. There should be no misunderstanding of the exact product you are delivering.
3. Clearly define the services you are providing
A good quote will clearly define the services you are providing for the cost presented. This is very important as it will provide an opportunity to requote if you mis understood the job and included or left out certain processes.
4. Clearly State What is expected from Customer
The quote should also clearly state what is expected from the customer. If you are assuming that the customer is providing certain materials and providing those materials in certain ways by placing this information on the quote the customer can confirm or deny those assumptions before the job begins.
5. Allow for Special Instructions
Your quote should contain any special instructions or requirements you have for certain jobs. Ideally these instructions should be initiated when certain processes are selected from the estimate, allow you to pick from a list of common special instructions and type in specific instructions for unique jobs.
6. Present Pricing as Requested
Don't make your customer work to get the pricing he wants. If he wants certain processes broken out or he wants an each price instead of per M you should provide the quotation in that format.
7. Original Date
Clearly indicate the date this quote was origianlly provided so that your 30/60 day validation period cannot be extended.
8. The Quote should be Generated Automatically
Taking time to rewrite the estimate numbers into a format to present to the customer takes valuable time and represents potential errors from transposition and ommission mistakes. The quote should be automatically generated from the estimate.
9. Deliver Quote in Requested Format
If your customer want their quotes emailed and you fax it you are starting the process in a negative manner. Your quotes should be deliverable quickly and easily in the manner specific to each customer.
10. Track Quotes for Follow up and Analysis
Track desirable quotes to ensure you don't lose them for stupid reasons like " we gave you a big job 2 days ago we didn't think you could handle this as well", " we didn't think you could perform that process" or " I seem to have lost your quote".
Analyze estimates for won/loss, customer activity and much more valuable information
Thursday, August 30, 2012
Wednesday, August 1, 2012
MORE ACCURATE STANDARDS LEAD TO GREATER PROFITS
By Mark Porter
Often standards that are used in post press industry estimating are developed for the sake of expediency. It is vital that customers get their quotes quickly and therefore in order to meet that need owners and estimators have taken their knowledge and condensed it into simplier factors.
This is seen in many processes when standards such as $3 per M are applied or if the cost for running the process includes material. An example is laminating where say the cost of $125 per M includes the laminate.
This may get the price to your customer quickly but does it maximize your chances of making money on the job or minimize your risk of losing the job because your price is too high.
If your method of estimating does not allow you to take into account different conditions and materials then you maybe getting the pricing to your customer quickly but you are greatly reducing your chances of maximizing your profits.
Let's look at a couple of examples to see how changes in conditions or materials can dramatically change the price of a quote.
Last issue we talked about estimating cutting and we used the example of cutting sheets of 60lb and 100lb paper. (Please see the November issue of our Blog)
Lets say that we had settled on a price of $12 per M sheets cut because we didn't have time to look up calipers, calculates sheets per lift, number of cuts etc. On our 5000 sheets cut 2 out we would have gotten 5 x $12 per M or $60. As per our example though the 60lb stock would have cacluated to $50 and the 100lb stock would have been $75. This is a $10 to $15 dollar swing on 5000 or a $100 to $150 swing on 50000. The variances get greater with thicker and thinner stocks and based on the number of peces cut out.
Lets look at a laminating example where material is included in the running price. On a 10000 sheet run of a 19x25 sheet at $125 per M we would calculate $1250.
But the laminate material could vary from 1.2mil Gloss Polyproplene at $.065 per MSI to 1.2mil Matte Polyester at $.300 per MSI. The cost difference is significant.
If we say the labor cost is 10000 shts / 2000 speed = 5 hours x $100 / hr that is $500 in labor plus our material cost for 1.2mil gloss polyproplene is $309 (19x25x10000/1000x$.065) and the 1.2mil matte polyester is $1425 (19x25x10000/1000x$.300).
This now gives us a swing of $1250 - $ 809(500+309) = $441 limiting our chance to get the job or $1250 - $1925(500+1425) = $675 in loss on the job.
The more accurate your standards the better your chances are of maximizing profitability. If your estimating method compromises profits for the sake of speed you should examine your estimating methods.
Often standards that are used in post press industry estimating are developed for the sake of expediency. It is vital that customers get their quotes quickly and therefore in order to meet that need owners and estimators have taken their knowledge and condensed it into simplier factors.
This is seen in many processes when standards such as $3 per M are applied or if the cost for running the process includes material. An example is laminating where say the cost of $125 per M includes the laminate.
This may get the price to your customer quickly but does it maximize your chances of making money on the job or minimize your risk of losing the job because your price is too high.
If your method of estimating does not allow you to take into account different conditions and materials then you maybe getting the pricing to your customer quickly but you are greatly reducing your chances of maximizing your profits.
Let's look at a couple of examples to see how changes in conditions or materials can dramatically change the price of a quote.
Last issue we talked about estimating cutting and we used the example of cutting sheets of 60lb and 100lb paper. (Please see the November issue of our Blog)
Lets say that we had settled on a price of $12 per M sheets cut because we didn't have time to look up calipers, calculates sheets per lift, number of cuts etc. On our 5000 sheets cut 2 out we would have gotten 5 x $12 per M or $60. As per our example though the 60lb stock would have cacluated to $50 and the 100lb stock would have been $75. This is a $10 to $15 dollar swing on 5000 or a $100 to $150 swing on 50000. The variances get greater with thicker and thinner stocks and based on the number of peces cut out.
Lets look at a laminating example where material is included in the running price. On a 10000 sheet run of a 19x25 sheet at $125 per M we would calculate $1250.
But the laminate material could vary from 1.2mil Gloss Polyproplene at $.065 per MSI to 1.2mil Matte Polyester at $.300 per MSI. The cost difference is significant.
If we say the labor cost is 10000 shts / 2000 speed = 5 hours x $100 / hr that is $500 in labor plus our material cost for 1.2mil gloss polyproplene is $309 (19x25x10000/1000x$.065) and the 1.2mil matte polyester is $1425 (19x25x10000/1000x$.300).
This now gives us a swing of $1250 - $ 809(500+309) = $441 limiting our chance to get the job or $1250 - $1925(500+1425) = $675 in loss on the job.
The more accurate your standards the better your chances are of maximizing profitability. If your estimating method compromises profits for the sake of speed you should examine your estimating methods.
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