How often do clients ask you for an “apples-to-apples” quote?
They send you an RFP to strictly follow so they can see a direct cost comparison between you and your competitors. But in the AV world, true apples-to-apples comparisons don’t exist.
Most of the people in the AV community work in competitive situations — we bid on projects, against other companies (and probably even against each other). Competitive bidding is the world we think we live in. But it’s not as comparable as it may seem.
Each company does things their own way. Since we approach projects uniquely, exact cost comparisons aren’t possible.
Yet, our customers don’t understand the complexities. They just want a way to directly compare costs between companies. By first understanding their perspective, we can better resist their request and actually give them the insight they need to choose the right bid. Here’s how:
Why Customers Ask for Direct Cost Comparisons
Customers want to know what they’re paying for. When clients see a variety of proposals that drastically differ in price, they may not be sure what the difference is. In sending a strict RFP, they’re looking for a way to understand.
As AV suppliers, we often resist apples-to-apples quotes (as we should) because our approach is unique. The way you would complete the job isn’t the exact same as the way your competitor would.
Customers get around this resistance by creating RFPs that commoditize what their suppliers do. Since the bids won’t match on their own, the client says, “I need a quote in this format. Will you use a product that matches what I’m asking for (instead of what you’re recommending)?”
This is the game they play to get the type of quote they want. It’s not good or bad, but it’s how they’re working the system we’ve created.
How to Resist An Apples-to-Apples Quote
The customer is always right in business… but they’re not right in this. A direct cost comparison isn’t realistic. Don’t give into their request. Instead, ask them for competitors’ bids, talk about the root of the issue, and be transparent.
1. Ask for Competitors’ Bids
When a customer asks you to follow their RFP, don’t make the mistake of resisting outright. Instead, start by saying, “I will try to comply with you. I understand what you’re asking for, but here’s what I recommend: Take your competitors’ bids, cover up everyone’s prices, and send all of us the details of each quote. Then we all know what we’re comparing.”
The client will say, “No, I can’t do that!”
And they probably won’t. Out of the 30+ times I’ve asked clients to do this, two have actually done it.
Ask for it anyway. It makes customers start to think about what they really want to see.
2. Ask Why They Think It’ll Help
If they refuse to send out the covered up prices so you can make a real comparison, you have to find a way to continue to resist the comparison and position yourself uniquely. Often, that means confronting your fear of money or clients and being willing to walk away from business. However, it usually doesn’t progress to that point.
When a client is asking for a direct cost comparison, we have an opportunity to better connect and understand their needs. Ask them why they think a direct comparison will help. Most likely, they already received a few proposals, the prices aren’t the same, and they don’t know why. They want an easier way to compare the bids.
In this type of discussion, a client once told me, “Your competitor came back 30% less than you.” I said, “That’s exactly why looking for apples-to-apples is the wrong approach. I know my competitor — they’re really good. It would be really unlike them to make that big of a mistake on their quote. Perhaps you and I have a misunderstanding about the scope if my competitor is quoting that much less.”
By asking how this will help, we open the door to explain why the prices are different and get to the root of what the customer actually wants.
3. Be Transparent
The only way to resolve a misunderstanding of scope is transparency. Talk about what they really want to accomplish.
In this conversation, take the chance to say, “Look at me on my own merits. Am I meeting your objectives? Is this the fit and finish you need? Do I have the credibility to do a good job? That’s what I want you to consider. It shouldn’t be important to you how someone else chooses to do it. Am I the right supplier or not?”
Being transparent requires real bravery. It takes overcoming our fears to get out of these awkward revenue-sucking conversations.
There’s nothing good that happens in an apples-to-apples conversation (other than the client gets more of your gross profit). But when we find a way to address the customer’s core needs and concerns, we give them the tools they need to make the best choice without compromising our quote.
How ‘bout them apples?
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