54 replies to this topic

[sanity]

Truth is, everyone has a number in their head. They have a good idea of what they can spend or they wouldn’t be shopping in public. If they don’t then they shouldn’t be asking you to invest your time in writing a proposal — and you most certainly shouldn’t provide them with one.

As most of us know when a potential clients asks "how much for a website" it's like asking "how long is a piece of string". I long ago learned the value of asking for an idea of their budget up front - which is not always greeted well.

Here's some tips to get the budget out of a potential client:

http://www.37signals...ives/000974.php

[ukdaz]

Thanks for that tip!

I'm definitely going to keep that one up my sleeve the next time I have to pitch to a client.



Daz

[Respree]

I think most clients can appreciate that you don't want to waste their time and vice versa. If they're hesitant to disclose a budget, you could tactfully ask "Just so that we don't waste each other's time, is your budget more like $500 or $5,000?" I'm pretty sure they'll know which it is closer to.

[thirstymoose_2000]

My opinion is that if a client won't give you a number they are not very serious --- walk away. They are not acting in a professional manner. I have a very low conversion rate on these types of inquiries so I no longer bother with them.

The one exception might be if they do have a farily detailed outline of what they are looking for and sincerely say that they have no idea how much this type of work costs. The work they've invested qualifies them as being fairly serious.

Normally if you really push they will have some sort of ceiling.

The secret I have found that you explain it is better for both parties to work with some sort of number because it saves time for both parties and the designer can give much better recommendations and suggestions.

I remember doing one that I gave the person three different price points because they didn't have a budget (it was a hospital so I went a head and did it). I gave them a good-better-best scenario which they appretiated. But it normally isn't worth that much effort for the ROI.

[Adrian]

My opinion is that if a client won't give you a number they are not very serious --- walk away. They are not acting in a professional manner.

The fairly technical director of the company I work for would hate giving budgets. he'd have an idea in his head about what sort of ceiling there is, but I'm pretty sure he'd refuse to say it, because he'd then expect the company to quote to the budget, rather than quote for the work. And by that, he'd expect to be overcharged.....

He wants to know how much something will cost to do, not tell someone doing a quote what to aim at. If that cost is well above what he's prepared to do, then he'll start looking at compromising features/fnctionality of whatever it is, and whether it's still worth doing.

Though saying that, in some respects he's probably a better 'client' than most, as he's is fairly technically minded and has an idea about whats going on. I can imagine that many are a pain, but for some, its just that they are too used to being screwed over by annoying customers.

[Tim]

he'd have an idea in his head about what sort of ceiling there is, but I'm pretty sure he'd refuse to say it, because he'd then expect the company to quote to the budget, rather than quote for the work. And by that, he'd expect to be overcharged.....

That's exactly what I'd think if I was in a client's shoes, so that's what I assume my clients would think as well. I have a Website Strategy Planner, basically a 12 page document that I send out to all new clients that asks many questions about what they want to achieve, etc., and one of the questions asks about their budget. Not one client has given me a dollar figure, ever. Most leave it blank, other's write things like "we have limited funds".

It's a good tip though.

However, I'd then be worried that a client might ask me "Why do you want to know my budget? Are you going to overcharge me?" What would you answser to that? Would you actually increase your quote if the budget was higher?

[sanity]

However, I'd then be worried that a client might ask me "Why do you want to know my budget? Are you going to overcharge me?" What would you answser to that? Would you actually increase your quote if the budget was higher?

I can appreciate that the prospect might think this but then on the other hand as two professionals who are looking at getting into a business relationship you'd like to start off with more trust.

As much as a prospect may worry that if they give you their budget you might quote up to that what about the others who are prepared to spend? If you don't have an idea of their budget how do you know you're giving them the best solution. Works both ways.

Put it this way you don't go to an architect and say draw me up some plans for a house and not tell them how much you're prepared to pay to build it.

[DCrx]

This is an intriguing issue, mostly with price only playing a supporting role? The question also feeds into recent news, with Best Buy as poster boy for how not to do it.

However, since we are quoting 37sigs, this may be an interesting addition...

[list]$150/hr Standard Rate 
$200/hr if you want it NOW 
$250/hr if you want to watch over my shoulder while I work 
$300/hr if you want to help 
$400/hr if you worked on it first 
[list]
-- All hours are not created equal

Should price be "context aware" to use a neutral term? ....Charge double for table based layouts? Charge the same for clients who create problems? How about a “I don't know what I want, but I know what I don’t like" fee?

[Adrian]

I don't know, I think generally I'd tell the architect what kind of house I wanted, then ask him how much it would cost, not tell him how much I want to spend, and then find out what I can get for it.....

If a potential client asks for something that they then find is way out of their budget, they then have to re-evaluate what they want.

Ok, if they have no idea what they actually want, then there's a problem. But I can't see that having an idea of a budget, and no idea of what is wanted actually helps much anyway.

Yes I think at some point you need to know how much they are willing to spend, especially if an initial quote is above it, and you need to work out what options there are of bringing it within that budget.

[Paul_H]

A friend of mine who worked in sales for insurance companies, and various high tech companies such as IBM, says the biggest mistake rookie sales people make is to quote a price before knowing the clients budget.

He said he’s gone round in circles many a time repeatedly asking what the clients budget is only to be met with “how much will it cost”, but he never cracks – not sure I would have that much will power.

[kensplace]

Find out what is required, offer price to do the work.

If you are going by how much money client has, then you are a rip off merchant. Charge how much it costs.

If they dont like your figures, find someone who does.
If no one does - your crap at your figures - or your abilities.

[sanity]

Ken I think you're kinda missing the point.

It's certainly not about ripping someone off. It all comes down to using the client's budget to provide the best strategy. A budget will help you determine how big/small/complex/not complex a site is. If it requires eCommerce will an open source system be suitable or do they want a completely customised solution. Will they want an online ordering system that is processed online or on their budget would they rather just collect card numbers and process offline. Does it extend to organic optimisation, PPC campaigns etc, etc.

Having an idea of a client's budget means you can provide them with the best possible solution to fit that budget.

[DianeV]

And there's the corollary to what Sophie has said: if you don't know the client's budget, the client needs to know what range the fee will likely fall into. Otherwise, your time and his/hers may be being wasted.

[Paul_H]

Find out what is required, offer price to do the work.

Knowing their budget makes a huge difference to what you offer and what you talk about in the information gathering phase. Most clients, are not 100% sure what they want and have no idea how much things cost. If you keep mentioning features and options they would like be can’t afford you are going to lose the client.

Imagine a client asks for shopping cart, you starting chatting to them without asking what their budget is. You ask what features they would like but they aren’t sure, so you mention custom design, telephone support, optimised, dedicated hosting etc. They think that all sounds good and are happy so far. So you also mention you can provide an offline application to mange the site, which will also integrate with their stock control software, and generate invoices. Now they are really impressed and want this too. So you prepare a quote, £10-£15k. The client receives the quote and never speaks to you again. They think you’re trying to rip them off. Turns out they had no idea how much dedicated hosting, a custom design and an offline application would cost and they only had a budget of £1000. If you knew their budget from the beginning you could of kept the talk to things they could

[thirstymoose_2000]

I don't know, I think generally I'd tell the architect what kind of house I wanted, then ask him how much it would cost, not tell him how much I want to spend, and then find out what I can get for it.....

You have it backwards. In my previous 'analogue life' I sold home building packages for about five years. The first question you ask is how 'much money do you want to spend'. Are you seriously going to pay an architect several thousand dollars to design a house that you can't possibly afford to build? Because unlike the norm in our industry, an architect will charge for EVERYTHING.

In our case, should we spend hours of our time developing a proposal based on what clients say they want just to find they can't afford it or don't have a budget for it? If a client won't give you a budget will they cover your cost of developing this porposal as an architect would be payed for developing the blueprint for a house?

I have been very successful dealing with clients by asking how much they are thinking of spending and then working with them to prioritize/decide what they can get for that price. It's my experience that what people want and what they have a budget for are two seperate things.

Don't get me wrong, the client can give you a brief scope of work to give you an idea and we can quickly ballpark them. I'm speaking of actual esimates. It is not in your best interest to go far into that process until you have a budget.

Why are people so afraid of asking for a budget? Trust me, clients know you're going to have to ask.

Ever buy a car? What was the first criteria in your decision making process? Price. You look at your price range and then look at cars withing that price.

As mentioned above there is no use talking to a client about features like shopping carts and CMS when they can't possibly afford it.

And Ken, your strategy would not give a very good return as you hand in a price based on what the client says they want without working on the best strategy WITH them. I get a far higher conversion rate when I design a strategy based on the clients' budget.

To be honest, it's somewhat insulting that you suggest we are 'rip off artists'.


Sanity, Diane, Paul bang-on!

[gravelsack]

My opinion is that if a client won't give you a number they are not very serious --- walk away

That is seriously bad advice.

Many professionally trained negotiators will decline to give you a number - the game (for both sides), as they see it, is to get the other to give the figures first.

[thirstymoose_2000]

But the figures for what? How can you possibly develop a strategy for building a web site without knowing a budget?

I guess it all depends on how you work with your clients. I can understand if you're negotiating the purchase of 20 computers with XXX chipset, CD-RW burners, XXX RAM and XX hard drive. Then yeah, you negotiate a price.

But in terms of developing a strategy for a web site, two of the most important factors are budget and deadline. How can you possibly quote a price of $20,000 when you don't even know what you're building or how long you have to build it?

I guess if you work based on clients providing a full set of specs you could price in this manner, but in most cases I consult with the clients to get to that point.

[gravelsack]

A professional company with competent purchasing staff will give you an invitation to quote which details full specifications and deadline.

Sure - there may be some discussion over the exact specifications, and your quotation would need a comment covering any post-quote spec changes.

My point is that this quote:

My opinion is that if a client won't give you a number they are not very serious --- walk away

... is incorrect when dealing with truly professional companies. Few as they are, they tend to be the big hitters financially. Not the ones to walk away from IMO.

[Adrian]

If you're working with someone who has absolutely no idea what they want, then yeah, if you're going to get anywhere, you're going to need something to work on.

I imagine they are also some of the worst clients to work for though.

Going back to the architect thing. If you want to build a house, you generally have some idea of the number of bedrooms etc you want.

If a potential client doesn't know whether they want a full online shopping sysem, or a poster style website, then yeah, perhaps a guide of what they want to spend can help you let them know what they can have. I think I would be quite worried about those kind of clients though.

[gravelsack]

I think I would be quite worried about those kind of clients though.

Agreed - when a client doesn't really know what he wants, its a problem.

Its also an opportunity to establish trust and authority.

If you can talk him through 'what he can have' and specifically the ROI stuff, how you can track it and how you are NOT going to encourage him to spend money where there is no ROI.

If they 'get it', and you do the job properly, they become clients for life.

If they don't 'get it', thats the cue to walk.