Estimates vs. Proposals

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April 20, 2007

Proposals and Estimates: Understanding the Difference
Sherry Bruck
President/Creative Director

Proposals and estimates. It's surprising how often these terms are confused when you're dealing with creative/marketing agencies. Knowing which is which will improve communications and get you what you need more effectively.

The request
Your boss has just come to you and said, "We need to do marketing! Find out how much it will cost.” Now what do you do? You can't ask agencies for estimates because you don't know what you need to get the job done--brochures? A website? An advertising campaign? And if so, where will you advertise? Where do you start?

You need a plan.
A proposal is a plan just as an architect’s blueprint is a plan. It spells out specifically what marketing materials are needed, their specs, quantities, how they are to be created, a timeline and budget. Just as you'd never go directly to a building contractor and ask him to build you a house without a blueprint, you shouldn't ask an agency for an estimate without first establishing a plan.

Think of a proposal as a blueprint.
Imagine asking an architect to design your new home without first telling him what style you prefer, and answering specific questions like: How many square feet do you envision? How many bedrooms? And most important, what is your construction budget? An architect needs this information upfront in order fulfill your expectations and do their job.

The thought process is the same
Before engaging a firm to create a proposal, ask yourself some crucial questions. The answers will get you started on developing a strong plan. For example:

• What is your project budget?
• What is your timetable?
• What specific deliverables do you imagine needing?
• What quantities of printed materials do you need?
• Who will write the copy?
• Will you need photography?
• Is there a sales force trained to utilize the brochures?
• What do you want to accomplish?

These questions must be answered upfront, otherwise the proposal, like a blueprint will be incomplete and ineffective. Be clear with your agency about your budget goals, just as you would with your architect. While many clients are uncomfortable talking about how much money they have to spend, setting a budget range ensures the proposal will deliver a plan you can afford to execute.

Expect to pay for the proposal.
A good proposal requires opinion, ideas and input from an expert, much as a blueprint requires those from an architect. Asking a creative agency to map out a proposal for free is like requesting an architect to design your house for free. You'’ll usually get what you pay for.

Next – the estimate
Now that the parameters of the job have been established in your proposal, it's time to obtain price estimates. Specifications for predetermined deliverables are given to prospective agencies to find out what they estimate it will cost in time and materials to produce your job. Much as your architect's blueprint will enable a contractor to give you an accurate price quote, a well thought-out proposal makes it easier and faster to get estimates from agencies for what the work will actually cost. Creative firms benefit by having specific guidelines to work from; you benefit by being able to fairly compare estimates on an "apples-to-apples" basis.

Flexibility is key
Although the proposal is your marketing road map, you must also be open to a change in direction that can make it more effective. As with building a house, unexpected challenges can crop up. What started as a 20-page brochure may need to become a 24-pager to accommodate new product information crucial to your sales force. Remember to leave room in your budget to allow for changes to the plan.

Final Tips
Remember any successful relationship needs synergy. Choose professionals that have experience in your market sector, explain your situation, hopes and concerns, and realistically discuss your budget. Review the firm's portfolio of work, ask about their processes and remember to discuss their case studies! How they answer your questions will speak volumes about whether they are the right agency for you, so you can make your final decision not only on price, but on chemistry with the agency's principals, their philosophy and design style.

A Win/Win Proposition
Knowing and understanding the difference between proposals and estimates will foster greater communication between you and the creative/marketing firm(s) you ultimately choose. The end results will clearly reflect the extra time you've invested in the planning and proposal stages of your projects.