It is difficult to turn down a job. You need more revenue to grow, and more jobs mean more revenue. You also know that doing well for a customer on a small job may mean that they come back to you in the future with a more substantial order. Yet, your time is valuable and finite. So, what is the best way to handle the low-value RFQs?
1. Understand the Profitability of Your Time Spent Quoting
It is crucial to have an understanding of the monetary value of the time you spend quoting. Note that if you spend an hour quoting a low-price job, you can eat into as much as 16% of the profits of work for ten jobs. Over a week, the average shop spends as much as $1,750 on quotes they do not win.
Quoting involves more than just time; in many ways it is also a financial investment due to the commitment your valued estimators put into quoting jobs, including those that your shop does not win.
If you can understand that time equals money when it comes to your quoting, you can begin to fully grasp the positive impacts that utilizing technology and shifting your pricing methodology can have on your entire quoting process.
2. Leverage Technology to Reduce Quoting Time
Using technology can reduce the time it takes to quote, allowing you to quickly quote on the lower volume jobs that have the potential to turn into something more significant in the future.
There are many benefits to using technology to streamline your quoting, such as using a geometry engine that you can customize to your shop’s capabilities. Technology speeds up the entire process of quoting, allowing you to spend less time quoting smaller jobs and more time prioritizing larger jobs and jobs you have a greater likelihood of winning.
3. Consider Your Pricing Methodology
It is imperative to understand your buyers and your competition. If you are the only shop in a 100-mile radius that offers a specific technology or capability, you can assume that for certain jobs, you “own that market.” This means you can set the price higher and not spend a lot of time on the quote – set the price and get the quote out the door.
If you are up against a lot of other shops with similar capabilities, then it is essential to know how they price so that your shop can stay competitive. Having this understanding of your competition means that you can better allocate the time needed for quoting particular jobs.
Read the full 7 Deadly Sins of Quoting for Job Shops eBook here.