Estimates vs. Quotes: How to Handle Price Changes Without Losing Customers

Lots of Nigerian business people, sales people and entrepreneurs are not aware of how the use of language or the use of words can set up expectations when talking to potential customers and potential clients. So this is one of the things that we are going to be looking at today. Now the reason why we're looking at that today is because in conversations that I've been having with some of my clients over the last week, it's something that we've been trying to tackle.

And I figured, let me just come over here and share some of that goodness as well. Now one of those words in particular is quotation. Now lots of people don't realize that when you're having a conversation with a potential customer, a potential client, and you are based in an industry where things are subject to change, like FX for instance, Forex. So you buy things from the original equipment manufacturer and your products are priced in dollars.

It's not very feasible for you to give somebody a quote, you know, today on the 1st of January and then, you know, maybe February 14th. You know, the, the potential customer thinks that you're still going to honor that price. Even though, you know, things might have gone up or down, you know, there might have been wars here or there that affect the cost of oil, that affect the cost of FX, that affect the cost of, you know, different kinds of things.

So if you are someone in those kinds of industries, you want to be very careful before you tell somebody that you are giving them a quote or that you have issued A quotation. Because when people hear quotation, they have fixed expectations regarding price. Let me repeat. If I tell you that I've given you a quote, your own understanding is, Oh yeah, that number is locked in. So even though you buzzed me 3 weeks later, you expect that I

figure is good to go because I told you that now, quote, I issue you. So we should be careful. When people hear quotation, they have fixed expectations regarding price. Now for my clients, what we've been working on changing, that's one client, particularly the solar space. If I want to use a solar example, we've been trying to work on how instead of saying quote, because any small thing they're on the phone, they'll say, oh, let me issue you a quote, I need, blah, blah, blah,

blah, blah, blah. So I can issue you a quote. I'm going to send you the quote tomorrow. I'm going to, you know, every single time, quote, quote, quote, quote, quote, what people are hearing is fixed expectations regarding price. So we're now trying to switch things up and start saying estimates instead. When you hear estimate, ordinarily estimate just means, you know, now rough idea, you know, it's not really set in stone jaws, you know, take care.

I'm just for guidance. But it's not as if this thing is fixed. So you're having a conversation with a potential customer, telling them I'm sending you a quote. It's not the same thing as telling them, I am sending you an estimate. Estimates can change. Estimates can be reviewed upwards. In fact, the customer, when they hear estimates, they're hoping that estimates can be reviewed downwards. But either way, when people hear estimates, they think, OK, this thing is subject to change.

So for those of you who are in industries where you know, any sorting, you know, you know, American president invades Iran, then the cost of oil, then the cost of FX. All of a sudden, the things that I used to buy before at $88.00, you now be buying it at, you know, $23. And of course, if you're buying at $23, there's no how that you can be selling at the old price because no one makes sense. Somebody will eat the loss and it can be you who is eating the loss.

So if you're in that kind of industry and that's the reason why we're using solar, stop telling people quote, quote, quote, quote, quote, say no. Now estimate that they give you, you talk to the person on the phone. Oh, no problem. Based on this, based on this, OK, I will give you estimates. So between this and this, that not the estimate when we show on site and I look at one or two things and no problem, I have issue you quote, but that initial number that you're throwing out that estimate, you do true, not quotation, not quote, not invoice language can set expectations.

All right, So now estimate will be the issue. Rough idea. That's what you're trying to give them. Now the time will come eventually for you to give a quote, but that is after you have done a thorough qualification and discovery and you know that you're dealing with a serious person who has a need, who has a sense of urgency. They have a sense of timelines. You know, they get ready to go, no problem. You can give them quotes because you know that these people are likely to take action anytime soon is a good deal, but until you have done a thorough qualification and discovery process, you can't just be rushing and giving people quotes.

Just tell them that. Sure, that's not a problem. I am willing to give you a couple of estimates. In fact, we can talk tomorrow morning like about 10. I have about 3 estimates I'd like us to go over. How does that sound? So now estimate. You go to estimate them while you are doing discovery. Once you are done with discovery, you know that is a serious person. They have a want, they have a need they can afford, they're interested, they have a timeline, they have a sense of urgency.

Good, bam, send them quotes. We can take it from them. Then also another thing that we're working on with this client that I'm currently working with is how we can introduce this whole thing of validity for the estimates just to inject a sense of urgency into the process. Because when you say quotation, remember when you say quotation, people assume that the price is fixed, you know, go change. And it's been leading to some absurd situations where you spoke to someone, no, 2-3 months ago and you know, the conversation stalled.

You're talking now and then you bring up some new figures and they're like, but two months ago you told me that is, you know, 10.2 million now, now you're saying 13 million. How you see quotation versus estimate and then also validity. So also something that some of you might want to take note of for those of you who prices are subject to rising and falling depending on, you know, the cost of foreign exchange or the cost of oil or the cost of this or the cost of that.

For those of us who are in consulting services, you know, we don't have this problem because, you know, whether Donald Trump, you know, bombs the moon or not, you know, has no effect on how much it is already charge. But there's some people that are tied into new cycles, capital flows, foreign exchange rate and commodity prices and, you know, things like that. So these are people that have to take note. But either way, even for people in consulting circles, yeah, you can.

Yeah. Validity will even work. So because it will make sense for you to talk to somebody in January, then the conversation stalls and then, you know, because of Tinbu economy, you continue the conversation in August and then they expect that they're going to pay the same price. OK, yeah. So we should all be doing estimate validity. So the plan that we have with our people and you know, we're testing it. So I'll let you know how how it goes.

So we still a triumph as we do it with clients. I'll let you know the updates. You know how that is working. But so far all we're doing is we're working with two weeks just to inject urgency. So Madam Olga, no problem, we can give you an estimate. Here is the estimate. Estimate one, estimate 2 estimate 3. But Olga, Please note these estimates are valid only for two weeks until so, so, so and so date. Are you are you good with that?

They'll say yes and say OK, cool. Most of our happiest clients usually take about two to three days to look over these sorts of things. So would it make sense for us to continue the conversation on Tuesday? Let's see which of these estimates you are growing fond of. You know, something like that. You secure an advancement. So let us use a case study. And like I said today, the case study that we're going to use is solar precisely because the people that were trying to work on some of these issues with are a solar company.

But of course, I'm not going to use my clients real name. So now let's pretend that we have an entrepreneur based in Lagos and his name is Chidi. And Chidi has a company called Brent Volt Solar. And Chidi has been having the situations where he's been talking with somebody, but by the time Chidi want to close or by the time Chidi they do follow up, the customer will get angry because there's been price change. So let's say there's a situation where GED was talking to Missus Okoro and he gave Missus Okoro a quote for 4.5 million, but that was just based on WhatsApp photos, you know, because apparently in this industry it seems OK that you guys talk about the phone, then you exchange some WhatsApp photos.

You say, OK, based on this, it looks like he can take this panel, looks like he can take that panel, blah, blah, blah, blah, blah. And then, you know, you give a quote before a quote before what's it called before inspection. So let's say in this situation now that Chidi gave me Sissoko record for 4.5 based on phone call and then based on WhatsApp photo, but then she did not show up on site. Then by the time Chidi climbed the roof now look around they say oh boy, we suppose use reinforced mounting brackets here.

Then you know because of some things when we're not seeing the picture we will need like around our kind 20 meters extra cable. So because of that this quote now Miss Okoro, this quote now we don't review arm you go pay 4.9. Now, of course, in that kind of situation, Mrs. Okoro will be pissed like you told me 4.5 so now 4.5 with in my mind, then all of a sudden 400K just enter the picture from where should be pissed, man pissed.

And that's because language has been setting the wrong expectations. When you tell Missus Okoro quotation, Missus Okoro thinks fixed price. That is our expectation. If you tell Missus Okoro no problem. Now I'm all the Yan OK based on WhatsApp, based on phone call, I think give you estimates estimate could be like around that kind of 4.5. If you tell somebody around that kind of 4.5 and then when you show tomorrow, it turns out to be 4.9, no be estimates now still estimate.

It's not as if she'll be happy then you know that Nigerian thing, you bounce back and forth with a price groundnut here and there. But at least if you tell somebody that 4.59 estimate then no problem. You know the shock, no go too, no go too much. But if you tell somebody quote, as far as this person is concerned, price is fixed, 4.5 is 4.5. Which one are you telling me? 4.9 That is not what you told me. That is not what you told me.

The Enquirer go begin quire, go not start. So this is what I recommend for Chidi or anybody in that kind of situation. At the initial stage, at the initial inquiry where you know, somebody refers you to Miss Okoro or Missus Okoro got in touch with you at that initial toasting stage. Excuse me? You can just say something like, OK, Missus Okoro, can I give you some estimates just to see if it fits your budget? Is that OK with you?

Now, most people will say, yeah, sure, no problem. Let us see the estimates. Let me know, Self. Let me know, self, whether this is something I can proceed with or not. So excuse me. So excuse me about that. It's been a long day. I've made two podcast episodes today. Then I've also had two coaching calls. Sorry, Yeah, I really should come up with a voice care routine. You know, some people have been telling me I should be drinking okra that is good for the voice and a person.

I should be eating his nail. I guess it's time for me to try out those remedies and and see how it works. OK, so as you tell Missus Okoro, Yeah. Can I give you some estimates? I just want to see if if it's your budget. I just want to be sure that we're in the right correct range. Miss Okoro says sure. No problem. Then. That's why you now start talking about validity. You say Maram Okoro, this estimate where they give you is valid just for two weeks.

So now I told these people that I'm currently training, you don't just say 2 weeks when we're talking sales. Sometimes when it comes to expectations, we suppose make a concrete. So in this case, you don't just say Mr. Coro is valid for two weeks. You say, Mr. Coro, these estimates I've given you are valid for two weeks until the 7th of May. You can see now you have made the concrete when you say valid for two weeks, you know, two weeks differ.

You know, two weeks is just something that's hanging in somebody's head. But if you say valid for two weeks until 7th of May when I don't concretize them, you're setting some expectations down. Now since we're talking about solar, where the price of things can go up depending on where Donald Trump decides to bump or it can go down depending on where you know fiscal policy. You know, one thing, one thing and then foreign exchange the price of dollar this and this price can go up or down.

It would make sense to explain to Mr. Coro in this case. Now Mr. Coro, these estimates have given you are valid for two weeks until the 7th of May. The reason why is because Madam you know that foreign exchange dollar big issue in Niger. And Madam I only deal with top notch quality. I am buying direct from the OEM, from the original equipment manufacturer. I'm buying direct from the manufacturer straight from Germany.

Madam, you know Germany nadem get correct correct products. Germany nadem be the king and queen of manufacturing and they buy from Germany direct. So Madam Abed Novaks 2 weeks this estimate because any small team dollar go up, price go up. But of course Madam, I'm sure you know that if dollar come down, price come down, she will laugh. You see, just small talk. Then you will now transition into getting an advancement.

So you tell Madam Okoro that you know what, I can issue you a final quote. But that would depend we suppose. Come for site visit first. Let me come and see everything on my 2 core crore. I measure everything, you know? Then that way I'll be able to give you a solid price that you can rely on. OK, Madam, how you see him? You know, you're trying to get an advancement. You're trying to see if she's cool with that. Let's just assume that Madam is cool with that.

Then you now try and get an advancement. Advancement means you're trying to put something physical down on the calendar. Sorry, advancement. Really. What it really means is that you and the person that you're talking to, the potential customer, the potential clients, both of you are both mutually agreeing that this is the next step that we're both, we're both going to take to move this agenda forward. So remember, it is only an advancement when both of you agree.

If you suggest something but the other person says well, well, let's see, let's see is not an advancement. Let's see is me. I was proposing something. The person in committee person just say well, you know, God willing anyway Mossy and that's one advancement. An advancement is you say Tuesday next week, Madam says, Oh no, actually I'll be on the road on Tuesday. I'll be back in Lagos on Thursday. It's a fantastic Thursday.

My calendar is free. So for that Thursday my which one works for you morning, afternoon or evening? So oh because of school runs this and this and that and that I'll be back in the house around that kind 10 so oh ten OK, so Madam Vivashob 10:30 will be would that be OK 10:30 is perfect. That is an advancement. You were talking, Mrs. Okoro was talking you put narrowed it down initially you said Tuesday, she said no Thursday for Thursday she said around that kind 10 you said OK Madam, what about 10:30?

She said no problem that is an advancement and that is how we move deals forward. So, OK, no problem man. So these are the estimates value for two weeks. The site visit is going to be two weeks from now on Tuesday. I mean, sorry, two weeks from now for do we say Thursday on Thursday, 10:30 AM after that I can give you a formal quote that is going to be locked in. But Miss Okoro, like I said, you know, you know how this in the apple now we're only locking it in just for one month.

So this is how we're going to move the thing forward. But the main thing the owner to pass across to D is we should be careful with our use of language because it is setting wrong expectations in the customer's mind that is boxing or saying later on and that is also unnecessary quarrel. So for those of you in the solar space apart from solar, what again those of you in the export yes, because my brother and I, we used to do export this used to mess with us.

You give somebody a quote and then America will do this. America do that you know, next thing bam, prices don't change and then things are not in our favor. So that's the reason why export solar who again oil, people that import from China and Bangladesh, import from Germany, import from everywhere. Don't be giving people quote, quote, quote. Again when you say quote, the person thinks good fixed price. That's the reason why they will talk to you in January, then they'll call you up February 14th.

And so why I'm ready, I want to pay and they will now start calling that. And that was January price, you see? What do you mean? That was January price. This is what you told me. I went together myself and I'm not ready with 4.5. You're now telling me it's 4.9. How so? No more quote, quote, quote, quote, quote. OK, you tell them it's an estimate. Maybe we hear estimate. They know it's rough idea. You give their estimate validity.

You don't just say 2 weeks. You say this estimate. These estimates are valid for two weeks until December 21st. That is something concrete. Don't just say 2 weeks, two weeks away. Sounds in front, in front, in front. Nobody is really thinking like that. These quotes are valid for two weeks until March 23rd like that. So yeah, that's it. That's just what I want to talk about today. So let's be careful with our use of language before it puts us in a bind.

So that is it. If you found anything useful in today's episode, if you've gotten value from today's episode and you'd love to connect with me, you can call me, send me a text message or a WhatsApp message on 08064662140. If you're interested in the 15 minute sale audit, you can WhatsApp me on the same number 08064662140. If you're shy and you just want to join my WhatsApp channel, that's not a problem. You can be there, get a load of all the updates, and then when you're brave enough, you can call me or you can send me a text message.

So applying these principles can be tricky. If you need help, you want me to look at your particular circumstance. That's the reason why I give up my phone number. So get in touch and let's see if I can be of any help. So that's it for today. I'll catch you all some other time.