Should You Ask Potential Customers Their Budget?

reportsDo you ask potential clients about their budget?

The question came to mind recently after I entered into discussion with someone interested in design. We exchanged some emails, shared thoughts and tossed around options. I liked the customer, the project was interesting, and the talks seemed to be going well.

Then I quoted her our standard rates.

The potential client didn’t respond. Nothing. Nada. Not even a, “I’ve changed my mind.”

That in itself isn’t surprising and it’s not unusual. Sometimes people can’t afford our services or expected to pay next to nothing for a lot of something. That’s okay; we understand words like “budget” and “economy” and “bank accounts”.

What did surprise me was the response I received to my follow-up email. I’d asked the potential client if she had any questions. We’d had a good exchange so far. There’d been strong interest.

“It’s out of my budget. Thanks.”

Just like that. It was a flat, non-negotiable response.

The response puzzled me. I didn’t mind that our quote was over her allotted budget. Not at all. What bothered me was the firm, decisive, unquestionable slamming of the door. What bothered me was being set to the task of shooting for a target while blindfolded with the lights off.

Aaaaand we missed.

We’d been put to some subconscious test. That doesn’t surprise me; people do this all the time. We set others up and hold them to hidden standards, then we watch them take shots in the dark.

But it does make me wonder. Should we ask people about budgets before beginning? Should we be the ones to say, “Sorry, we can’t fit into that,” before discussing with clients? What do others do?

I looked around for answers and found a mixed bag. Some people stated standard rates on their website. Some added a disclaimer that they’re open to negotiation. Some refuse to bargain. Some had contact forms that had obligatory fill-in fields for budgets. Some, like us, had nothing.

There are pros and cons to each of these methods, and there really aren’t any best solutions. It all depends what works for you and your business model.

Personally, I feel uncomfortable asking people what amount they have to spend. If I walked into a store and was stopped at the door to have my credit limit questioned, I would turn around and leave. I wouldn’t go back.

Then I think if that did happen, if the storekeeper did want to know what I had to spend, he could point me to this or that instead of watching me waste my time looking at stuff I couldn’t afford to buy.

Likewise, had I known the budget I had to work with, I could have tried to come up with solutions for the available amount. I could have pointed out that this project element wasn’t really necessary or suggested other options. I could have tried to help.

I did email the person and offered to look into it further. I was prepared to see how far we could go with the budget she had. I wanted to try to help her reach her goals, or at least get her partway there.

It’s a shame, really. If she’d felt comfortable discussing money, we could have found a solution together. I can’t help but wonder if she didn’t shut the door on herself by keeping me in the dark.

So today I have questions, and I’d like to hear your thoughts.

  • For freelancer and business owners: Do you ask potential customers about their budgets? When do you ask about it? How does asking about money make you feel?
  • For buyers and customers: Do you tell people your budget when you discuss your project? If not, why? Do you like being asked about your budget? How does it make you feel?
  • For both providers and buyers: If the rate doesn’t match the budget, do you discuss further and try to find a fit?

What’s your take on budgets?

Post by James Chartrand

James Chartrand is an expert copywriter and the owner of Men with Pens and Damn Fine Words, the game-changing writing course for business owners. She loves the color blue, her kids, Nike sneakers and ice skating.

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  1. We’ve all had this experience before, albeit often in different settings. Even so, sorry you had to go through it. I would agree with your penultimate point, she closed a door more for herself than for you. Obviously you’re willing to negotiate, and that demonstrates much more about your service than just your price, meaning she’s probably going to try and find someone “cheaper” than you now, which will translate into many levels of their service.

    Also, to answer your question, as a freelance designer, I never think there is a problem with asking a customer or client their budget. It all has to do with your approach. Even in a high-priced retail environment, salespeople can present themselves in a helpful fashion (though this is obviously not the stereotype); of course, we all remember that scene from Pretty Woman!

    More importantly, if you want to work with big-budget clients then you need to be willing to ask their budget. Most large firms ask their clients for their budget so that they can best adjust their services for the task, as services breakdown into multiple price categories anyway.

    So, ultimately, if small businesses are your target then you should be willing to experience a much higher rate of failure and these kinds of events, as you have to nanny them much more. But if big businesses are your market, then grow a pair and ask, because they want to know that you have their best interests at heart.

    Tyler Hayes´s last blog post…Hitchhiker’s Guide to the Internet

  2. Yes, I’ve never understood why this issue is so difficult in a service-orientated business. For product areas, this is how much the product is and that’s that. No further discussion.

    I understand that when you offer a service, it’s always different and hence why the price can fluctuate.

    But it does nobody good if we can’t all be adults and have an honest, open discussion about rates.

    Don’t shut the door, buyers or sellers. If you do have to leave the table though, at least be open about it.

    Andy Hayes´s last blog post…Irish Whiskey and Italian Communists

  3. James,

    Here’s what I do.

    1. Rates and “but remember, everybody’s circumstances are different” standard spiel on website.

    2. “In case you didn’t see it, here’s the three scopes people are generally looking for and the price points for each” mention in initial, telephone consult, after we have some rapport (and after I’m pretty sure I know what they want) but before we bother with a face to face meeting, tailoring the pros of the package that suits them, to parrot back needs they’ve just talked about.

    3. A little more talk so they can catch their breath if necessary, then, “it sound like X would really suit your needs. Do you agree?

    About like that. So rather than asking their budget for the hat at the department store, I dangle the price tags, and talk about whether they need a touque, a homburg, or a top hat to suit the occasion.

    We still lose some on price alone. That stings a little. But how I look at it, is these were not my ideal clients to begin with, and better to know that up front than to discover it sixteen revisions and two late payments later… ouch!

    Regards,

    Kelly

    Kelly´s last blog post…Tip of the Week: Be Portable

  4. Back in the day, before technology, when i used to do brochures, business cards, manuscripts and such for pennies I would always ask for their budget up front. Then I would figure out what the project was going to cost me and then agree to do it or not. I guess it was an ego thing for me. Doing it this way gave me some sense of having the upper hand, so to speak.
    Personally, I had no problem with your approach. I thought it was honest, straightforward and respectful. I’m still dreaming and thinking of what I want to do with my site, always with your expertise in mind, but I still have no money or definite plan, so don’t want to waste your time with all my speculations. :)

    prin´s last blog post…President Obama Delivers Your Weekly Address

  5. Thanks to the social stigma attached to money, I don’t think anyone really likes admitting they can’t afford what they would like to have or need. Having been on a tight budget for most of my life, I am very uncomfortable discussing the subject regardless of whether I’m buying or selling.

    I’m unsure of how you set up your proposals, but if I sense that budget may be an issue I offer three separate packages at different price points (*note to self* This should be incorporated into my business as a standard practice). IMHO, if you have the middle package set as your standard quote, it would help deal with higher and lower end markets. As Kelly says, it takes the focus off their budget, and places it on your price tags.

    I see working directly with my clients to find the right solution is one of the perks of working for myself. The inability to do so was one of the main reasons I quit working for someone else. If I was in their position, I would appreciate the extra steps someone takes to help me. It may not be exactly what they had envisioned, but it would get them to the point where they could start making money and increase their budget at a later date.

    I wouldn’t be where I am today if someone hadn’t taken that extra time and effort to help me gain the things I needed to get started.

    Angie Haggstrom

    Angie Haggstrom´s last blog post…The Great Debate — How Much Should A Writer Charge?

  6. I’ve just recently had a similar experience. The prospect contacted me and let me know right up front they didn’t “have a very big budget”. I responded with a quote that indicated what the regular rate for such a service was and then what I would charge her in consideration of her budgetary constraints.

    After I sent the quote I heard nada, zip, bup-kiss. Follow up = no response. I was irritated. Not because I didn’t get the job. Trust me, people like that I’d just as soon send to a competitor. I was irritated by the lack of professional decorum similar to your potential client.

    I’ve found thus far that if people have budgetary constraints they are usually right up front about it. If they don’t mention it, they are:

    A – Clueless. In which case they need to be edumacated.
    B – Not constrained. In which case I’m upping the limits on my Paypal account.

    My Rates and Services page is very clear. I am flexible and quote on a per job basis.

    One other thing and please allow me to be dead-on honest here: If I were looking for services and spent any time on MWP, I would expect to pay professional rates for what would obviously is a functional, professional business. If I went to Tumblemoose – not so much. That is just a reality and I’m ok with that given my current curcumstances.

    Any-who, my 2 cents.

    Cheers!

    George

    Tumblemoose´s last blog post…The tumblemoose community is the best

  7. I used to ask people their budget, and never found a person who would admit to even having a budget. Since I do not give free services, I had to decide, do I try and work with this person or not. Are they just protecting their money or do they really not have any money. Most of the time, if I did something at a super low price, I would find they would later spend 3 times as much with another company, I felt both ripped off and like I had missed an opportunity.

    Now I spend more time telling people who my perfect customer is. I do not have to quote my prices all the time, or first. First I say This is my perfect customer, if you fit this… then we can talk. If not , great meeting you!

    One of the great things about my perfect customer is that they like paying my fees and getting my services.

  8. I don’t have my rates posted, but I usually state my standard rates during the first correspondence. I emphasize that they’re *standard* and not written in stone.

    I hate money-talk (yet money-email is much easier!), but I find that putting it out there in the beginning is usually appreciated. When I go into a store seeking assistance, I appreciate being able to give them a budget range. Less awkward then pretending to be interested in the super-pricey items they show me.

    Zoe´s last blog post…Reclaim Your Dreams: An Uncommon Guide to Living on Your Own Terms

  9. i provide website consulting (seo, usability, analysis) to medium-sized companies. i’m not so good with big companies, and not so interested in the bottom end either.

    i give an idea of what a campaign can do for them and what it can cost on my website (start around US 10.000). that helps the people who want to spend US250 or US250.000 know that i’m perhaps not their best bet.

    during initial discussions i will find out if they have read my page on services. if they have, i know they are a target client and that what they are looking for is pretty likely to be what i can offer.

    ie; we won’t be wasting each other’s time (after all, we’re all professionals here).

    at the same time i am not always happy disclosing my budget to a service provider/sales person and can understand that others may feel the same.

    it’s a question of sensitivity mixed with practicality.

    ps black text on a grey background doesn’t work so well for readability.

  10. I would think that it wasn’t YOU she couldn’t afford, but rather the project itself.

    In my work there are circumstances where I know my charges would be four or five times what someone else would charge and I tell seekers that up fron so that they know to go elsewhere. It’s like renting a bulldozer to get to work: you’ve gone after the wrong tool.

    But that’s not the case here and I know your rates are reasonable, so I really think she just didn’t realize how much she was asking for. It might have changed nothing at all had you made her aware of your rates up front. It might have helped to have “typical project costs” as Kelly suggested, but then again what’s a typical project? I get that sometimes in my work: “How long do you THINK it will take?”. Unfortunately my answer often has to be “Anywhere from 15 seconds to 15 hours or more” which doesn’t help them much but it’s true. Maybe you can be a bit tighter than that, but there’s aways slop and variance, isn’t there?

    In general, though, sometimes you just can’t avoid wasting time. At least you did it all by email!

    Tony Lawrence´s last blog post…Why you don’t make money blogging

  11. Wooo, I picked a good topic – check out the comments and it’s not even 8am yet!

    @ Tyler – Good point. Big-budget clients and companies expect a certain type of behavior from service providers. They get all flustered and thrown off when the person they’re negotiating with doesn’t follow ‘standard protocol’.

    Heh. They’re actually pretty funny types to negotiate with. “… how can you quote me?! You haven’t asked my budget!!!!” They’re shocked.

    “No, I haven’t. I really don’t see the need to charge you more because you might have more disposable income. These rates let us sleep well at night and compensate us fairly. Unless you’d like to tell us what you were planning to pay us…?”

    Confusion reigns, and they need to have a board meeting to discuss this unethical Canadian who obviously knows nothing about How to Screw Companies Over.

    @ Andy – Well that’s it exactly! We’re adults, it’s just a rate… I’d much less rather have to discuss prostate cancer, but hey, they have full page ads of butts these days and no one even blinks. I just… don’t get it.

    @ Kelly – We do pretty much that. We ask what kind of hats they like. We ask about the weather and where they go. We ask how quickly they get dressed or not. Then we offer toque, cap or fedora and suggest one.

    @ Prin – As long as we’re in your dreams, we’re all good.

    @ Angie – Yup, that word ‘standard’ is a big one, eh? “Here are our standard package rates we typically offer clients.” Choice, flexibility.

    I *like* working with clients. I’ve helped people change their minds and go with something simpler, cheaper and better. I’ve told others they’ll need to find more money or change their plans. Any time I can *help* someone instead of just saying, “Oh, you have a job? Great. We’ll do it as is”, I feel good.

    @ Tumble – Yeah, I’m not at all upset at not getting the gig. It happens, nothing personal. I was just really surprised at the vehemence of the reaction, but it wasn’t a “me” thing, it was a “her” thing. Not much I can do about it.

    @ Zoe – I had to think about what I do, and I think I’m half half. Half I’m right there telling them because 1) their project is clear and straightforward or 2) I know they’re looking for someone cheaper. The other half, 1) the project is too complex to quote and I have to lead them out of the forest to a tree or 2) I see a better idea that would fit more, but I have to help them see it too.

    (You know, I just realized everyone’s going to come haggle with me now…

  12. @ Tony – I’m going to restate this one, because I think a lot of freelancers need to GET this one. (I do.)

    I would think that it wasn’t YOU she couldn’t afford, but rather the project itself.

    It is *NEVER* personal.

    And I *LOVE* this one:

    “How long do you THINK it will take?”

    “Anywhere from 15 seconds to 15 hours or more.” It doesn’t help them much but it’s true.

    If you knew how many times I wished I could see the future… heh, and how many people expect me to have that crystal-gazing ability…

  13. Great question. I’ve been on both sides of this issue, and ultimately I think it boils down to the underlying relationship the seller has with the buyer. If the buyer is uninterested or skeptical, budgets make a great excuse to stop the sales process. But an interested buyer will coach the seller and make sure the proposal fits the budget. As a seller, I like asking about budgets early on. The response I get tells me a lot about how serious the buyer is. If I get an evasive or vague response, I know I have more relationship building to do with the client before submitting a proposal.

    Brad Shorr´s last blog post…Do You Suffer from SME Info Dump Syndrome?

  14. For service-based businesses it is diificult to know how best to approach this.

    I tend to lean towards trying to get an idea on any budgetary factors, but I like Kelly’s ‘Rates and “but remember, everybody’s circumstances are different”’ approach.

    This strikes a good balance. To use the retail parallel it says, “Hey, come in and browse around the store, see if there is anything you like the look of, but if not don’t go away. Have a chat with us and we may be able to find something that is just right for you.”

  15. @James

    Yes, that word ‘standard’ has come back to bite me in the warm-and-fuzzies on several occasions. What started out as something basic suddenly turns into a huge time-suck.

    I realize after reading that back, I didn’t express myself as clearly as I maybe should have and feel I should clarify. I would not have handled it any differently than you (offering to work with the client). The passion for your work clearly shows.

    The latter half of my comment was more in respect to the client. I feel she clearly missed the boat on that one, and it really is too bad :) I think clients often fail to realize most of us aren’t out there to gouge them for all they’re worth.

    @Tumblemoose Very well stated!

    Gee Whiz…I barely get a comment typed, and there’s a whole list more waiting in my inbox :)

    Angie Haggstrom

    Angie Haggstrom´s last blog post…The Great Debate — How Much Should A Writer Charge?

  16. What it really comes down to is trading work. They have worked for their money, and you are working for their money. How much do they value your work.

    If I walk into a store I am annoyed when I have to ask a price. That puts me in the position of telling the sales person ‘ That’s too much ‘, and that’s exactly what you say when you don’t buy it. I would much rather walk into a store and find clearly marked prices, that way I don’t have to waste any ones time by asking.

    When you go get your car fixed the hourly rate is clearly marked so you have an idea of what your in for when you walk in the door.

    One last analogy: It’s may be a stretch, but you can compare Web design to having a classic car painted. What kind of paint job do you want?

    *100 point show winner?
    *Very nice driver?
    *20 footer?

    It all comes down to your budget. Maybe you can ask what type web page are you looking for? show winner, or a nice driver :-)

    Dave C´s last blog post…Joomla 1.5.8 Released takes care of some bugs

  17. Timely post, given the worldwide economic concerns!

    When a new or potential client is unwilling to respond to the question “what’s your budget?” with at least a ballpark range, it immediately raises a red flag for me.

    As you mention in your post, if I know the budget range, I know how best to help the client and their project.

    Paul Orselli´s last blog post…Hacking IKEA for Exhibit Design

  18. Lots of designers and visual arts people chiming in… And Angie :) Is budget more of a problem with the design industry than others, I wonder? (Or maybe writers get up later ;)

    @ Paul – Indeed. Knowing people’s financial position, for me, does not make me reach for their money. It makes me want to help keep costs as low as possible. I think it’s a common fear in buyers that service providers, knowing a large budget amount, will charge more. Not so.

    @ Dave – Agreed. There’s a huge difference between buying a blue guitar and buying one with a custom airbrush paint job. But doesn’t that fall into “What do you want,” as opposed to, “What do you have to spend?”

    @ Angie – You just haven’t had enough coffee. I forgive you. Here. *passes jet fuel*

    @ Peter – Ah, the difference between boutique approach and warehouse sales? Mmhm, I like.

    @ Brad – Agreed that there’s a thousand psychological influences going on with this. People are funny creatures on all sides of the cube!

  19. Oh, this is a great topic!

    My business is custom software development. I’ve had projects range from $200 to $50,000, and of course it depends entirely on what they need. There is no way to put a price tag on that! (And since I provide fixed-fee pricing, I don’t publish rates either.)

    I have always had difficulty asking prospects about their budget. I have it on my new client questionnaire, but if I am running going through the questions with them over the phone (which is typical), I rarely ask it. I always feel self conscious about it somehow, like they will think that I’m trying to screw them. Of course, my real objective is as you said. I’m trying to figure out how we accomplish their goal within their budget.

    I’m glad to know I’m not the only one who has this problem. (I always feel like such a lame business person because I’m uncomfortable asking the question.) But this post has inspired me to do better. If their default position is that someone asking the budget is trying to take advantage of them, I probably don’t want to work with them anyway.

    Avonelle Lovhaug´s last blog post…How to select a support vendor

  20. I’m still figuring this one out myself, but I love what Angie said about making the middle tier standard and having a spot to either work up or down. In the dozen years I spent booking weddings in a flower shop, that’s exactly how I did it. We had standard prices for everything. We always tried to book for more (allowing us more freedom to purchase higher quality materials with abundance), but were always willing to help those brides who had a stricter budget.

    Writer Dad´s last blog post…Yes, You Are a Writer

  21. This is a GREAT question because it’s one I’m coming up against. A query (which, don’t get me wrong, is nice to get), followed by a couple emails to determine the scope of the project, then an estimate and … silence.

    What irks me is that this is just such a basic piece of politeness–and saying, “Sorry, too much” doesn’t exactly take a lot of time. Especially when you’d been exchanging emails to begin with. (You know, as opposed to responding to a generic query and then not hearing anything back at all … that’s like having your phone ring and having no one on the other end when you pick it up.)

    If you’re trying to run a business, why would you NOT act in a business-like manner? Burning bridges is only good business if you’re in the Loot-and-Plunder business.

    –Deb´s last blog post…Curse-Breaking

  22. (Hmm … and I think I just came up with a great idea for a blog post….)

    –Deb´s last blog post…Curse-Breaking

  23. Is budget more of a problem with the design industry than others, I wonder? (Or maybe writers get up later)

    I think we’ve gone down this road a bit before… IMO, both design and writing suffer from the “I have a program on my computer—I can do it myself” syndrome, or its corollary, “My cousin can do it for 50 bucks.”

    Brain surgery and things which involve heavy equipment I don’t own, I know I’ll have to hire someone. And pay their prices. Intellectual output, many people (who are NOT a good match for most of us) will haggle about until their last breath.

    Goodbye, and I hope your cousin does a great job. I fix screw-ups for twice my usual rate. Just sayin’.

    Until later,

    Kelly

    Kelly´s last blog post…Tip of the Week: Be Portable

  24. @ Kelly – A peer of mine says, “Reworking existing content is far harder than starting over from scratch. Charge double.”

    @ Deb – Every day of my life, I am constantly amused (and sometimes disappointed) by how people have all sorts of personal issues that hold them back from really simple things, like being polite or being straightforward. I think people feel they’re admitting a ton of other stuff that hurts them inside, so they can’t do it and just hope it goes away.

    @ Writer Dad – The Olympic Pricing System (bronze, silver, gold packages) works like a charm. Choice, prices and levels of need. All in one fell swoop.

    @ Avonelle – Heh, see what I just wrote to Deb? We all get all screwed up thinking other people will think stuff about us, but I’d say 90% of the time, it’s all in our own heads.

  25. @James

    Yes, and it is up to ‘US’ to explain that if you want that custom airbrushed guitar it will cost you $xxxx.95, but if you simply want a ‘blue’ one, it will cost $xxx.95

    Maybe that is a better way to present the question, rather then ‘What is your budget?’

    Provide the customer with choices \ pricing and let them decide.

    Dave C´s last blog post…Joomla 1.5.8 Released takes care of some bugs

  26. Brett Legree says:

    I like Kelly’s last point and have sent people away a few times (when charging for computer work, in my cheap little town).

    They either know some kid who can do it for $20 or “Staples can do it for $75″.

    Yes, and will you still have your photos of your grandkids when they’re done?

    Thought not.

    Once or twice I’ve received a call-back when Staples actually did nuke the machine from orbit… “can you get my photos back?”

    Perhaps… for a price… heh heh

    (And as Tony says, it might take 15 seconds, or 15 hours.)

    BTW your rates are good for what you get – I know they’re higher than when you did my blog design, but you can do so much more now, I think it’s worth it.

    In this particular case, I wonder if something else was at work. In previous jobs there have been times I’ve gone out for quote, lined up everything pretty much and then the boss kiboshes the whole thing.

    Quite embarrassing actually…

    Brett Legree´s last blog post…a perfect storm.

  27. Brett,

    Very good point. Always make sure you’re talking to the decision-maker. From solopreneurs where the spouse will have veto power, to the business where the “buyer” really only recommends purchases to the boss, if you haven’t got the pursestrings involved in the conversation right from the beginning, you can waste a lot of time and energy.

    Until later,

    Kelly

    Kelly´s last blog post…Tip of the Week: Be Portable

  28. @James–true, but even if you didn’t want to say “I can’t afford that” (which, admittedly, can hurt to say), you can come up with SOMETHING to say. Even a generic, “I’ll let you know. Thanks for your time,” is better than nothing at all (and has that hidden, meaning of “I’ll get back to you” equals “No” but with nobody’s feelings getting hurt).

    –Deb´s last blog post…Curse-Breaking

  29. Definitely a lot of good discussion going on here today. Tony’s response really stood out and I have to agree with James, many times people don’t realize the scope of their own project. It’s like anything else, you see something pretty, you want the bling and then you realize it costs more than you wanted to spend.

    My mother always jokes about being rich in another life because she almost always gravitates towards the most expensive item on the shelf. That doesn’t sway her from getting what she wants, though. If that one is too expensive, she’ll negotiate with the sales people to either get a bargain on that high ticket item, or find an item in a mid-range price that still fills all her needs.

    Get the best that *you* can afford and don’t be intimidated by the quoted price or the salesperson. A quote doesn’t obligate you to buy.

    @Dave: Choices are always good and so is a little justification why the price is what it is. People want to know the benefits. Why does the custom airbrush design cost more than a flat, stock blue? You as the artist may know that airbrushing is a labor intensive process, the client may not. Maybe there’s a middle ground, like a smaller design that won’t take you too many hours to do, but would still add enough personal flair to the project. There’s always *something* you designer can do and sometimes if you do something small, the person will come back for more later down the road.

    @Brett: We’ve seen that happen many times too. People walk away, have the work done someplace else, it doesn’t get right or done at all, and the client ends up spending twice the amount they originally wanted to when they come back to us to fix it. There’s something to be said for paying to have it done right the first time.

    @Deb: Like I said earlier, a quote on a project doesn’t obligate you to plunk down your cash. Many quotes are free and there’s nothing wrong with telling the salesman you’re gathering up your options and you’ll get back to them when you’ve made a decision.

  30. GREAT topic – what I’ve learned to do after experiencing a lot of what you describe here, is to offer several different ‘packages’ of varying price points. One may be more of a lower budget ‘do it some of it yourself’ package, the next is a package quoting what they asked for, and the last is a package that includes what they asked for plus other cool ideas that they may not have thought of before.

    :D Christine

    Christine OKelly´s last blog post…Turning Sh** Into Sugar

  31. “The Olympic Pricing System (bronze, silver, gold packages) works like a charm. Choice, prices and levels of need. All in one fell swoop.”

    When I was working for a previous firm, we revised this to silver/gold/platinum because nobody was buying bronze. This then picked up sales of the former bronze/now silver!

    I’m still not sure if it was people being put off by the image that bronze meant worst/last, or if they were thinking of bronze jewellery!

  32. Graham Strong says:

    Hey James,

    To answer the question directly — yes, you can ask their budget. This is often easier when you are talking to a bigger company though, where the person is spending their budget, not their own personal money (as in the case of small business owners).

    I’ve had times where I’ve discussed with a client in-depth about their budget, right down to what quotes they’ve received so far. Not only does it help the freelancer come up with an acceptable rate (especially since the person has essentially told you what they will pay), but it starts you off on the right foot. Get the business out of the way, and then get to work on the creative.

    When people are spending their own money though it’s a bit more difficult. They may not know how much things cost, and therefore may not have set a budget in their own mine. But what they do know is the $100 for a website is too much… If you can ferret out that bit of information as quickly as possible, you’ll save yourself a lot of hassle and pain.

    ~Graham

    Graham Strong´s last blog post…Can Your Own Customer Stories Help You Sell More?

  33. Christophe says:

    Being asked my budget right up front can be an uncomfortable experience for me as a buyer, because of the clear implication: “Amazingly, our quote will be 98% of your budget! What a remarkably coincidence.”

    I respond much better to being given a quote, and then saying, “Well, that’s beyond what we can afford; what can we do to reduce the price?” I have absolutely no trouble being told that our eyes are too big for our wallet; that’s just life in the real world. But, as you point out, it would be an odd situation to walk into a store with no prices displayed, ask how much something costs, and be asked, “Well, how much are you prepared to spend on it?”

  34. You can let your marketing kill the “Out of my budget” objection for you.
    It all comes down how and who you want to work with and then setting up your marketing to position you in a way that attracts the kind of clients you want. Do you want to be Wal-mart or Nordstroms?

    Competing in the middle is tough. This is why specialization pays off. You can be the expert in that niche.

    This is the difference between a specialist and a general practitioner. Who gets paid more, a general physician, or a cardiac surgeon?

    No one price shops cardiac surgeons. If they do they’re the exact kind of nitpicking patient the top surgeon doesn’t want anyway. And because he’s the top dog, doesn’t need.

    If you want to make more money and you have a bunch of cheapskate clients it’s your fault. It’s also your fault if you attract clients you don’t want because your marketing appealed to them.

    I think about years ago, when I used to work in Downtown L.A. I was by no means rich when I was there. I vividly remembering visiting Beverly Hills and being scared inside to walk into any of these stores. I shouldn’t have been. Nothing bad would happen.

    I just knew I didn’t have money to buy even a pair of socks from these stores let alone multiple outfits. I believed unconsciously I shouldn’t be there because I couldn’t afford it. And I was weak for believing so.

    Those owners of the shops know this is going to happen. It’s a by-product of their marketing. You can do the same.

    If I get an email from someone I want to look at their site first to see what potential there is before I get on the phone with them. If they’ve got a product I want to sell or is a loser I won’t take it.

    When someone does get the privilege of talking to the specialist you do not want to start off by talking money or by telling them how you can fix their problems when you haven’t elicited their buying criteria first with questions like…

    “If I had a magical wand and we were playing wizard of oz and I could grant your wish and put you in Kansas, Kansas for you being concluding a successful project, what’s important to you about this project/website/direct mail piece?”

    “How will you feel about yourself 10 years from now if you still have this same problem, or worse?”

    “So, what do you think you need to make this project successful?”

    There are many more questions to ask but the point is you haven’t said diddly at this point, and they’re gonna say you. Very often. Or they’ll say I need to solve problem 1, problem 2, and problem 3. And you’re gonna say…

    “How much do you think this project could earn?”

    “What do you think the potential of your site is?”

    Let them tell you what their expectation is. Let them set the value. Oh, I think this site could be earning seven figures a year. “Seven figures a year. Wow. I can see it.”

    You didn’t say your work can earn them 7 figures a year. You got them to say it.

    “So you’re talking about this year? So that means that if this site is working for the next 10 years at that same kind of rate, you’re looking at something that could be potentially worth how much? 10 million dollars. Wow. So ten million dollars.”

    Only after this would you ask him for 10, 15, 25 thousand dollars because you have contrast. You built the value and now you’re taking it down the road.

    “10 million dollars, huh. What do you think that’d do for time you could spend with your family?” If family is their most important value you speak directly to this criteria.

    “What would the success of this project accomplish for you?” They will tell you it will enable me to spend time with my family or whatever their criteria are.

    “What’s the biggest driving factor that brought you to look for a copywriter right now?” The reason for this question is to put them in a take action phase. Presupposition. “Because I want to get this thing started.” You want the commitment to come from them.

    I learned all of this stuff from 2 men. Dan Kennedy and Harlan Kilstein.

    Look up Dan Kennedy’s Business of Copywriting Interview he did with Lorrie Morgan Ferrero and Harlan’s “Value Based Copywriting” program for two of the best programs on dealing with client attraction, presentations and management I’ve ever come across.

    Great topic selection James.

    Talk to you again soon,
    Note Taking Nerd #2

    Note Taking Nerd #2´s last blog post…If I Could Hear The Questions You Ask Yourself Would I Think I Was In The Presence of a Leader Or a Victim?

  35. Brett Legree says:

    @Harry,

    Exactly – pay a fair price up front for a job well done, or pay a lot more to have someone fix another’s mistakes. That seems to be a theme you know…

    Brett Legree´s last blog post…a perfect storm.

  36. Christophe says:

    “10 million dollars, huh. What do you think that’d do for time you could spend with your family?” If family is their most important value you speak directly to this criteria.

    Perhaps it is just me, but if an outside service provider started down this path of conversation with me, I would be wondering how fast I could get security up to the conference room.

    How much a project could generate in revenue really isn’t the concern of a subcontractor, and being drawn into that discussion is a rat hole. If pushed, my response would be, “Then you’re willing to wait to be paid until the project realizes that revenue? No, I wouldn’t think so. Then let’s talk about what I have to spend, not what I might make.”

  37. James,

    I have a lot of different thoughts on your experience, and it starts with her not being in a position to know what is necessary to get her idea on the internet. Mentally, emotionally, or financially she clearly didn’t do any homework on what the price range might be for basic setup all the way to an elaborate setup. Once you gave her the “QUOTE” she clearly walked away from the encounter with the wrong impression.

    You gave an example of being credit qualified when you walk in a store as being something that would turn you off. I agree that would turn me off also. Qualifying a customer is normal in business, for example simple question like: “Steve do you have a budget in mind for your blog creation.” or “Steve how much do you want to invest in getting this portion of your business up and running.”

    So I don’t open up a rat hole a lot of people don’t have a clue to what it takes for them to get a website, blog or internet business going and they need to do some more home work on their own to learn what will be required of him or her. The process is not as harsh as it might sound, but usually it requires thinking out the box and learning new way of doing things.

    I believe you did an excellent job in the initial conversations with her. In short I believe you can assist her by directing her to more information, other designers, and maybe a forum where she can learn more about the process and adjust her thinking so that it is a win win situation. I don’t believe that any good effort goes unrewarded in life.

    Thanks

    Tillman

  38. I think we should ask for their budget because if we give our prices straight away then there will be no chance for negotiation.

  39. May I just say…

    The response to this post has been amazing, and the comments are fantastic.

    @ Tillman – You’ve hit on something there. Anyone in the market for buying needs to do some research and ask around before settling.

    @ Christophe – I have always had trouble myself, personally, using the “yes, but you’ll make 50million, so I need my cut of that”. It goes against my values. I can see the logic in it and it does make sense, but it rubs me the wrong way every time.

    @ Note – I hear where you’re coming from. But I have to say that personally, I have trouble with this type of sales pitch. That’s just me though – it *is* effective and it *does* work. It just… I dunno. Makes me want to take a shower, lol

    @ Graham – Definitely different when talking to big businesses. However, with more and more people getting into their own business these days, the question of budget and when/how to ask about it (if at all) starts to really figure highly. Don’t you think?

    @ John – We actually decided to go for Budget and Gold. We skipped Silver, no one was buying. We turned Silver into Budget and then offered the Gold.

    The theory was that more people would go for Gold, because a) you get service on a platter and b) it’s GOLD, dude! Who wants to be the budget person?!

    The *reality* is that it’s 50/50 split now. Half take Gold, half Budget. And they’re both very comfortable with their choices, which means we’ve done our job well, actually.

    @ Christine – Yeppers, that’s what I mentioned before. Olympic Pricing Strategy. And then the extras. Like pizza :)

  40. There’s an old saying that those who a name a price first, loses, and I think a lot of people keep this in mind when they are negotiating and are therefore hesitant to name their budget. I recently had 2 potential clients who stated they were on a “shoestring” budget, which I didn’t find out until halfway through discussions, and I think in this case, the business owner needs to get a budget range to work with or else it’s a waste of time. Most people should be comfortable at least indicating a range.

    Also, I have received price quotes where it is not clear from the vendor that it is negotiable, and therefore if I can’t afford it I don’t pursue it. If an hourly rate is not included, I interpret that to mean that the package rate is not negotiable.

  41. Wendi Kelly- Life's Little Inspirations says:

    My thought on this is that it really isn’t as important what her budget is as it is that you know what your budget is.

    In other words, The Pen Men need to know in No uncertian terms what the absolute minumium price is that you are willing to do a package of work for or it just isn’t worth your time and you would rather put your feet up or go play.

    Then the whole thing becomes simple. “Our prices begin at “Blank” and go up from there- depending on what custom features we design especially for you. Each one of our websites is unique, and the price will reflect your personal needs and wants. We can give you an exact quote depending on what you decide you want and can adjust it accordingly.”

    OR something like that.

    Hairdressers have been dealing with this problem for years with custom perms and haircolor.

    Wendi Kelly- Life’s Little Inspirations´s last blog post…Inspired Movies

  42. Christophe says:

    As a business-owner, I’m completely comfortable with (and appreciate) statements such as, “Our typical engagement is from $2,500 upwards, although some small projects can be completed for $1,000 (although your project sounds more complicated than that).” No rational person (that you’d want as a client, anyway) will assume that means it is always $1,000 to $2,500, and it provides me a solid reality check on whether this is worth either of our time.

  43. Hey James,

    Love that you say what you feel. It’ll keep me coming back here knowing I’m dealing with a man who isn’t afraid to speak his mind.

    Talk to you again soon,
    Note Taking Nerd #2

    Note Taking Nerd #2´s last blog post…If I Could Hear The Questions You Ask Yourself Would I Think I Was In The Presence of a Leader Or a Victim?

  44. @ Note – LOL, I say what I feel, I speak my mind, and even better, I can politely debate, see your side and maybe even change my mind. (Or change yours, heh!)

  45. Graham Strong says:

    @James – Most definitely, as the number of small businesses increases, the question becomes more important.

    I think that the approach can be similar though, as long as you recognize that the business side might be more “personal” for a small business spending their own dime, not the corporation’s. You might even help them design a budget and put together a long-term plan with stuff they need now and stuff they need later.

    I like Wendi Kelly’s and Christophe’s approaches though too. Start with a ballpark figure, then decide if they are on the first baseline with the full catering package, in the bleachers with beer and grime dogs, or just driving by the parking lot…

    ~Graham

    Graham Strong´s last blog post…Can Your Own Customer Stories Help You Sell More?

  46. @Graham: We’ve done that before and it’s been successful. Helping map out a plan for a client shows them they can have what they want if they’re willing to give up instant gratification and piece it together over time, starting with the basic needs and moving up from there when they’re ready and have the means to do so.

  47. I was recently thinking about the crickets and wondering when the break-up is official.

    Over the course of six months, I’ve had some clients who seems really interested in the prospect of working together only to dissolve into a silent mist. I usually do 2 follow-ups whether by phone or email and then call it a break-up.

    To answer to question, I like to get a range of what a client is thinking. Within that range I can give them a few different options. It’s a fine line between keeping your rates competitive and massaging them to fit the situation. Good luck to all who have to balance on it.

    paulina´s last blog post…Who Needs Copywriters, Anyway?

  48. I often do ask potential clients about their budgets. I like to know. Sometimes, I can work within their budget. Sometimes, I can say, alright, but I charge xx for that. Most of the time I will seal the deal even with the higher fee, as long as I don’t scare them off. And I give them every reason to say yes. I like to work with my clients rather than just say this is what I charge and that’s it. Because people will slam the door. I don’t like it when people slam the door in my face. So, I try to work within their budget, unless it is way below MY budget.

  49. I include my rates on my website. I’ve tried it both ways, and found that I get a better conversion when I am transparent about what I charge. When I didn’t have rates published, I spent way too much time on quotes that customers turned down. This way, they have a good idea of what to expect in terms of cost, and they know that I use the same rates consistently.

    As for budget, yes, I do ask my clients what their budget is, but it’s not mandatory for them to answer. Sometimes, they’ll say “don’t know” or “have no idea what something like this would cost.” Other times, the budget they list is WAY too low, and then I can avoid creating a quote and gently let them know that my services are out of their price range.

    Once in a great while the budget is way more than I’m going to charge. No, I don’t up my fees, but I will make suggestions about additional services they might find beneficial ;)

    Melissa Donovan´s last blog post…An Introduction to Search Engine Optimization

  50. There is a great book called High Probability Selling with a Web site at HighProbSell that contains some great tips on how to handle this situation. I agree with Angie that a great way to handle these situations is to offer three price points with descriptions of how they differ. My very favorite way is to know enough about what other specialists do and their work that I can strongly recommend them and explain to those I refer what it costs and why it is worth it. That way their new client already knows what to expect and why and they can focus their time and talents on doing instead of selling.

    Internet Strategist´s last blog post…DoFollow Lists of Blogs, Social Networking Sites and Forums; DoFollow Search Tool; Understanding Do Follow, No Follow

  51. Urban Panther says:

    As a purchaser, I think it depends on what I am purchasing. I have bought many homes in the last 20 years and I always tell the real estate agent my budget. Let’s not waste anyone’s time here! I ain’t buying that half a million home. If it is service based, then I investigate pricing. I want to work more like a team with the supplier of the service. “This is what I am thinking, and this is how much money I have to spend. What can you provide within those parameters.” You will then come back with what services you can offer within that budget, and if you are clever, you will say “But for an additional x number of dollars I can also do this for you.” Chances are, I deliberately left some wiggle room, and will upgrade.

    Or, I will laugh hilariously (as I believe I did, eh?) and tell you it ain’t gonna happen. Then we will find what works (as we did, eh?) and firm up a deal. And chances are really good I will do business with you again (which I more than likely will, eh?).

    Urban Panther´s last blog post…The true hunters are always female

  52. I had this experience not too long ago with a potential writing client. In their respone, they gave specific details of their project, and asked for my rates to do these projects. It was a lot of heavy SEO research, writing, and rewriting, which would easily take an hour (or longer) per article. I quoted them my standard hourly rate. They replied with a curt “I have people who will do them for $5!” and slammed the metaphorical door in my face.

    Those sting because you wonder, were they expecting you do to it for less than $5? Seriously? There comes a point where you’re better off just letting them go, and not finding a middle ground.

    I was going to mention the saying “whoever names the price first, loses,” but Carrie beat me to it! Do you consider this when asking the dreaded budget questions?

    Thanks for this thought provoking post – and excellent responses!

    ~Kimberlee

    Kimberlee Ferrell´s last blog post…Blog Showcase #4: Write About Everything

  53. @ Kimberlee –

    Those sting because you wonder, were they expecting you do to it for less than $5? Seriously?

    Yes. They were. And yes, they can get the work for less than $5. And yes, sometimes it’s very good work. We can’t blame people for shopping internationally, and we cannot, in the world we live in, say that cheap is crap or that you get what you pay for, because online, it simply isn’t true.

    Some cheap providers suck. Some very expensive providers suck just as badly. Where you live and what you charge has absolutely no real bearing on how skilled you are at all.

    Take Quebec rates compared to rates in … hell, I don’t know. Texas. Wildly different. At 45k a year, we live comfortably. The person in Texas might be on borderline poverty.

    Skills. That’s where it is. You have them or you don’t. And as for rates, what you provide *beyond skills*, to me, is what makes the difference.

    So yes. Those people expected you to write for less. Should that sting? Absolutely not. We live in a virtual world with no borders. You do what’s right for you, and enjoy the clients that you work with. Make sense?

    Right. More Shiraz, anyone?

    @ Urban –

    Or, I will laugh hilariously (as I believe I did, eh?) – Yes, you did. *grin*

    And tell you it ain’t gonna happen. – I took my chances it would. *bigger grin*

    Then we will find what works (as we did, eh?) – Yes, we did. *nods*

    And chances are really good I will do business with you again (which I more than likely will, eh?) – I hope so, considering your reaction *huge grin*

    @ Internet – Another good tip is to make it clear what they get for the rate and why you charge what you do.

    @ Melissa – Ahh, I love you today for coming to comment, specifically because I know you post your rates. I swear, one day I’ll try it.

    I will say that our branding has affected who contacts us and what they expect as far as rates go. Most expect expensive and are surprised when they find value for their buck. But also, many people don’t contact us, thinking we’re too expensive for them. We might be, but they never know until they ask, eh?

    @ Nicole –

    I give them every reason to say yes.

    That right there. Rock on.

    @ Paulina – Two follow-ups? Hm. We do one. More than enough to know whether the client was interested and hemming or definitely not interested.

  54. I like to think of it as managing expectations and avoiding wild surprises.

    As you say, it depends on your scenario and context.

  55. Hi James – you’ve had lots of great answers already but to add my tuppence worth.

    I don’t usually ask a potential client for a budget unless our initial dicussions lead me to suspect: a) the budget is really low or b) they’re inexperienced at buying writing services and don’t know what a realistic price would be.

    I don’t publish my rates but when asked I say that my day rate is normally £XXX per day but that I prefer to quote a fixed price per project. At least then they have a rough idea.

    Normally we discuss the spec and I send in a quote accordingly. Fortunately so far – unlike your situation – when I have come in too high the client has been happy to discuss what elements of the spec we could lose to meet their budget. They may then choose to walk away but at least they’ve opened the door to have the discussion.

    Rachael´s last blog post…16 errors your brain doesn’t want you to to see

  56. I see I am a little late coming to this party. James, you have obviously raised a hot-button issue. Bless you for doing it.

    I came to you sometime ago for a project. I found nothing whatsoever to dislike about you, your services, ethics, way of doing: nothing.

    You were not at all afraid of price that I could see. Did I make it easier for you to quote a range of prices because I was unafraid to assist you in that matter by asking? I don’t recall, but I do recall being quite pleased with your pricing and the manner in which your quote was couched. In fact our short email discussions left me thinking you far superior to the norm we usually expect to find among good, intelligent, aboveboard businessmen.

    True, though our discussions were several months back, not a red cent has moved from my pocket to yours. I probably left you with the understanding that I would hopefully be back to you in a reasonable length of time. The best of intentions often go awry. Man proposes and God disposes. In my case many things, including lack of money and family matters intervened to keep me from coming back.

    That said, I think you should not second-guess your approach to your business. You are part of the top 2% of the elite as it is in this man’s mind, and that is pretty rarefied air you are breathing up there. Just keep your guns blazing and all will be fine.

  57. As much as some of us don’t like to breach the “what kind of budget do you have” subject, sometimes it’s necessary. I work in the SEO/SEM field and I have had some clients say to me that they are interested in what I can do for them but they simply can’t afford it. One client proposed paying a certain amount and asked what they could get for that and we took it from there. Ever since then I have just asked him slightly ahead of time what his next monthly budget is and we plan it out from there.

    Rob McGuire´s last blog post…Your Blog Will Reveal Your Intentions

  58. That exactly what happens if you are a freelancer or a service provider. The $$ factor matters at all times. It is what makes or breaks a possible long-term business deal.

    At first glance, asking for prospective client’s budget can indeed be awkward. Many clients shun their way from high-priced service providers. But truth of the matter is, you should always quote your ‘price’ top avoid any confusions and ‘close’ the deal.

    Business Opportunities´s last blog post…Low investment business opportunities online

  59. Everyone? Lawrence is my new best friend.

    Lawrence? You just made my morning.

    @ Rob – Indeed, we have clients like that as well, who can’t really afford what we offer but who ask us to chip away slowly at it depending on what they have that month. It works very, very well.

    @ Rachel – Quoting per day is a great way to go. It’s better than quoting by the hour. “A day and a half” versus 12 hours sounds more appealing to customers.

    @ JD – Yes, that’s one I really have to get down to a science, I think!

  60. Speaking as one who has passed a small amount of money into the PayPal account at MWP, I do want to reiterate that the charges I paid were more than reasonable. I think I mentioned before that in one case I actually sent more money than requested because I obviously got more value than I expected.

    I did the “chip away” thing and still have more to chip, but the results from that work were excellent. My RSS subscribers jumped 36% and traffic to my e-book sales pages jumped 22%. That’s after 1 month – pretty significant stuff, I think.

    I mention this because all this talk about budgets and customer foot dragging, expectations and so on could easily leave a new reader with the impression that they better pile up some cash before they ask for quotes. Perhaps true if you have a lot to do; I could probably drop half this months income on work I’d like to get done someday, but there’s a lot to be said for going after the low hanging fruit first. In my case, it definitely paid off.

    Tony Lawrence´s last blog post…Network Subnets for Humans

  61. Hi James. As partial owner of our family landscape company, this is a constant issue with us. Because we are contractors, we have the added issue of having to meet clients in person, listen to their wants and needs, walk the area with them, design a sketch, and present it to them. As you might expect, this is all very time consuming.

    It is far more efficient for us to at least ask sometime in the initial stages of understanding what a client wants a basic ball park budget. Most people really do not know how expensive it is to design, buy, and install a new landscape.

    In the real world (outside email), we are able to visually see clues as to whether they can afford what we might present to them (nice cars, upscale neighborhood or not, etc.).

    So to answer your questions:

    A) As a business owner, yes I try to tell people up front an approximate amount they might be looking to spend. For contract jobs, I don’t think that’s a problem. Other times, it’s better to ask what kind of budget they have first. Just depends on how I feel, I suppose. But I’m never shy when it comes to opening communication about price.

    B) I think you know my answer on this one. When I first contacted you about a new design for my company, I told you my general budget early on. I like to tell people my budget so that way they know what they have to work with (and don’t).

    Now one could say “Well then the company could charge you more (your top budget price) when it normally would have cost less.” To that I say, well I usually do a little research first to make sure that’s not the kind of company I’m hiring, though I suppose it’s not 100%.

    C) If it doesn’t fit, I let them know what I can do or refer them elsewhere.

    John Hoff´s last blog post…Understanding The Psychology Of Your Website Visitors

  62. It’s frustrating because we cuold almost always work out a perfect product to fit a clients budget if we knew what the budget was, but they never tell us.

    And they never will.

    I think it is because they don’t know themselves, or in a lot of cases, they know what to expect, but they are scared that if they state their budget they will miss out on the million to one chance that you might quote half the price they are expecting.

    TB – logo designer´s last blog post…Lands Legal, a logo for lawyers

  63. Hi James,

    I’d say that whether to ask for budget or not, really depends on two things: the customer’s understanding of your business, and the level of trust, and partnership you have been able to establish between yourself and your customer.

    About their understanding, if they understand your business, they might also understand how much time it is going to cost, and will know your ballpark figure, and will know that you know their ballpark figure. In my experience, these customers are more willing to discuss the budget, and it is surprising how often such customers have realistic budgets, and match the offered price.

    About trust, also in my experience, the more they trust you, and the more of a partner they see in you, and the less risky it is in asking them about their budgets.

    The biggest issue I’ve seen with asking for budgets is that some (most?) of the customers automatically start thinking you’ll aim to take it all, while you might have settled for less if you didn’t know. But if you build trust, and show them that you really care most about solving their problem, and not about taking their money, in my experience they are more open to discuss budget, and if you ask this question it doesn’t ruin the relationship even if they are unwilling to reveal the figures.

    As most of commenters agree, if budget is made known early on, the expectations can be corrected, and a win-win situation can be reached quickly.

    On the other hand, customer’s time investment into the process can be huge if the budget is concealed, and the cost of that time won’t show against the budget. If the total cost of whatever product the customer is buying is expressed not only in the amount of money they pay, but also in the amount of time they spend to choose, they would probably be more willing to discuss the budget early on.

    In any case, I believe that either never asking about budget, or starting a conversation with “Hello, what’s your budget?” is wrong, and can cost you lost opportunities.

    But in the end, having an open discussion about budget mostly helps the customer – if their budget is too low, and they invest a lot of time flirting around before they find out, they have wasted their own time (for you, it is merely cost of sales–standard part of business). If they do find out, either they get a chance to review the budget, or the expectations, or to forget about the whole thing while their time investment is low.

    In my business (ERP implementation) I’ve seen too many customers start with unrealistic expectations (expecting how you nicely put it “to pay next to nothing for a lot of something”), and choosing an ERP system can sometimes take months, even years. Sometimes, after a huge time investment from both the customer and the vendor, and a lot of haggling around the price, both parties are sometimes so eager to close the sale, and sometimes do a lot of compromises which in the end result in inadequate solution. In the end the customer pays little for a lousy solution/product, the trust is lost, and relationship broken.

    A lose-lose situation after a long time, as opposed to a win-win alternative early on. It should be obvious.

    Best regards,

    Vjeko

    Vjekoslav Babic´s last blog post…Sure Step in action: Architecture Assessment

  64. I find with my customers, if we are talking about undertaking a more serious project, tone and well placed euphemisms can flush out their budget. Even if I totally miss read the situation and I find myself in your circumstances with a customer that has not responded to you after you’ve just dropped the hammer of the price tag, a heart to heart, down to earth courtesy call can usually lead to some common ground.

  65. Definitely ask them their budgets. No question. Just get the BS out of the way. Nothing can be more efficient than deciding in one email whether a client is in your target market or not.

    People who don’t understand how money works piss me off. People who like to call themselves businessmen and women who don’t understand money piss me off even more. How the FFFF can you expect to charge people 75$/hour for your stupid tarot card reading business ( just an example :) and get mad when a web designer (who is helping you to CONVERT visitors and probably will make you thousands of dollars over the next year) charges you the same rate? No FFFing common sense and it drives me crazy.

    Keep up the good work, and FIRE these idiot customers immediately, thats my policy :)

    For the record, I’m not always this angry or free with my words but its an hour after the SuperBowl so you do the math :)

    Conrad Hees´s last blog post…Challenge Your Business Model!

  66. I feel like I need people to tell me their budget, then in line with their goals I can hammer out my propsal for them, one they are more likely to accept.

    If they are overly concerned my rates are high, I guess I want to know that up front to.

    I figure if they haven’t thought enough about what we’ve talked about to give me a ballpark, they are probably either not very invested or they are going to be high maintenance. Just my limited experience…

  67. geek05@free blogger templates says:

    for me i would rather ask my clients about their budget and potential target price… so i can keep up on what im working on.. if i am doing a 100$ price tag project and my clients lately tells he got 50$ budget that was a big missed..

    geek05@free blogger templates´s last blog post…Universal Mobile Charger

  68. I do it all of the time. You need to know what their budget may be, I know sometimes customers may get defensive. You just have to learn a good way to throw it into the conversation. It’s a good way to eliminate tire kickers and not waste your time.

    As a builder, I run into these types of situations all of the time. It’s best to try it out and find your niche for this.

  69. crazy wabbit says:

    I asked 3 prospects in one day, all did not give an answer.

  70. Its a very fine line between asking a budget and feeling rude to your clients. But I think that the business owner should be honest and up front with the client and vice versa. Interesting post, sparks some good discussion.

  71. What many business owners don’t understand is this:

    Your client is often a novice and knows NOTHING of the costs for the services they approach you.

    They don’t know you personally, either. The internet in particular – or even the telephone are so impersonal. They don’t know whether they can trust you.

    SO YOU HAVE TO WIN THEIR TRUST BY BEING TRANSPARENT ABOUT COSTS FROM THE BEGINNING.

    When you aren’t, and simply ask “What’s your budget?” They’re hesitant to tell you.

    Why?

    They think you may overcharge them!

    If, for instance, a job may cost $3000, but they say they have a budget of $5000, they fear you will charge them $5000.

    Where’s the rocket science in this?

    Just give them your range of prices upfront so they can make an informed decision before approaching you.

  72. I don’t think its a good idea because people are very personal with there budget and they may even feel your trying to stereotype them

  73. The best clients are the ones that tell you their budget BEFORE asking for pricing. It’s more common with universities and governments because of all their red tape.. but if you ever come across a customer that tells you how much they have to spend.. then hang onto them! It’s a blessing!

  74. Personally I don’t ask them, as this can look unprofessional, you price is your price, if they think it is to much the you can usually come to some sort of arrangement

  75. In any business, especially web design, inquiring about a budget during a preliminary quote or consultation is definitely acceptable.

    It lets you know where you stand. Be honest and straightforward.

    If the client is trying to low-ball you, it’s not a client that you want to work for.

    People would much rather know the real costs upfront, and by getting a budget, it allows you to see what you have to work with.

    Not to say that you shouldn’t try to strike a deal, but you definitely don’t want to take on jobs that end up as horror stories on blogs. :P

  76. As a customer who has worked with lots of vendors I don’t really like the question because I know where they’re going – how much can they spend and how do I maximize it. That said, if i were in sales I’d probably broach it somehow so I’m not wasting both parties time. It’s almost like the whole salary negotiation thing when looking for a new job.

    I usually ask what their costs are and how flexible the are. To each their own.
    .-= Investing Tips´s last blog ..Easy Investing – Getting Started =-.

  77. I believe asking customers for their budget is particularly important if you are using 3rd party products. Using an open-source solution can save hours of work if the client doesn’t insist on owning all of the source code for the project. You might switch to a commercial alternative if an open-source option isn’t available, but the point is that you do get work done for less if the customer is on a budget. You might even be able to negotiate on reducing the features that you deliver if the client has a really small budget.
    .-= Nitin Reddy Katkam´s last blog ..WSUS in a Windows WorkGroup =-.

  78. @ Nitin – It’s funny, but open source reminds me of biological food or fair trade coffee. “If you choose this banana, you’ll be helping humanity, saving money and encouraging small developers…” hehehe

  79. It depends, I would definitely ask my customer and find out whether the services we’re offering will fit into his/her budget or maybe we could find another solution or lower the prices. We both have our own budget and we should make sure that while negotiating, we don’t run into losses but asking from a customer about their budget is a better way so that you can be prepared on how to approach that customer or what type of plan you should present to the customer so they don’t feel that it’s out of their budget.

    I agree that not everyone would like to discuss their budget with everyone and some will just say, No thanks. It all depends upon individuals, some may negotiate nicely and others will simply leave it because they will feel that the price is too high even to negotiate.

  80. Its a shame… this happens specially in web work. When it comes to design and marketing, everybody has their own good ideas. so for some reason, the clients do not trust the designer.
    Anybody can design. We don’t need license to do web work. You can’t fix somebody’s bathroom without a license. Beside, working with design looks like a fun work, no body wants to pay. And their is no tangible raw material that is needed before you can start designing. You can virtually find every kind of software for free that will do the work.
    hopefully good design will be appreciated and bring big results.
    .-= sample of´s last blog ..Free sample of Pantene Pro-V Nature Fusion Shampoo =-.

  81. The question of weather or not to ask someone their budget is a tricky one. To a certain extent it depends on how the approach has been made and the kind of business relationship that is being considered.

    If I have a very specific brief and go out to several companies for a proposal, I would not state what the budget was before receiving the proposals. If I receive proposals that I think are going to deliver what I want and they are within my budget then no problem. If I get proposals and the ones within my budget are not convincing, but some proposals that exceed my budget are persuasive that they have understood the brief then I would contact these people and at that point state what my budget was and enter discussions about possible amendments to the brief to bring the job within my budget.

    If you have a company that you have done quite a lot of business with then there is probably a bit less concern about revealing budget up front.

    I guess some people just get embarrassed talking about money.

  82. Thanks for the great post – we are looking for a car at the moment. I hate when salesmen ask me for my budget. The very first car I bought.. I paid more than I should have because the salesperson sold me a car that was worth less, but was priced to my budget. It’s a quesiton that always makes me nervous. Therefore, I prefer to quote and let the customer take it or leave it. I will also point out to them where they can cut $$ if they need to – e.g. the basic contact form instead of the whizz-bag form etc.

    Jorge

    Jorge
    .-= Jorge´s last blog ..Summer Camp Savings =-.

  83. I think you absolutely should ask the client’s budget, if only because so many clients – especially small businesses – don’t have one. They might have an idea of what they’d *like* to spend, but that’s not the same thing. If you don’t have a budget pre-planned, how can you gauge the success of the project?

    If a customer (who otherwise seemed serious, and had a good project in mind) doesn’t have a budget, I try to help them to make one. For instance, if you’re upgrading a web-shop, ask them how much a customer is worth to them, and then work out how much it’s worth spending to get an extra one. You should be able to say things like ‘if we spend $5 to get a new customer, we’ll get $25 back over the next 6 months’. You want 1000 new customers, you might say ‘let’s spend $5000 on changes and additions designed to attract new customers’.

    It’s at that point that a designer/developer can answer the question ‘what’s the best way to spend $X to achieve Y?’ – which is a much more useful question than ‘how little can we possibly spend?’.

  84. Great read. I think you are right James, when you say there is no proper way to address pricing. I mean, that’s the reason I’m reading this article right now; I did a search for “Is it wise to ask a client about budget”.

    I’m a graphic designer, and my prior approach was to make sure I had established a strong sale of my abilities and what I could do for the potential client before I would bring up money. I think this is fine if you are only risking a 5 minute phone conversation. However when it comes to meeting someone for coffee to discuss a project, I won’t step out the door anymore without first establishing that me and the potential client are on the same page when it comes to budget.

    I am wondering what your/or others thoughts are on including a “What is your approximate budget?” field in a project questionnaire contact form.

  85. I absolutely feel there is nothing wrong with asking someone’s budget. If you walk into a car dealership, a Real Estate office or the likes, you’re always going to be asked your budget. One of the reasons for this is to point you in the direction of something you like at a price you can afford. Your budget may not cause the person asking to falter on price, but it may allow them to understand how they can best help you.

    In service industries I think the same applies. We have the option of working with the person and adjusting our prices for them if it is a project we are extremely interested in working on, or we can simply do as product related industries do and use the stated budget to help direct them to how we can help them achieve what they NEED for an amount they can afford.

    I’ve found that realistically most people expect to be questioned on their budget during their initial consultation. We as professionals are the ones who are fearful of doing the questioning. But, remember, that they’re just as fearful to question price, not knowing whether or not they can afford our services and if not, whether we will work with them. I always take the approach that I am the professional and I need to steer my client in the direction we need to go. By me bringing up the budget it allows us to work more smoothly together from the start and avoids either party having too large an expectation of the other or feeling overwhelmed throughout the process.

    • Agreed with Freddie.

      There are so many people who ‘price shop’. It’s better to ask a persons budget, because working for someone who is cheap on price will always be a pain. They will always want more than the service they have chosen includes!

  86. As a real estate agent, defining a clear budget is essential to provide the best service to customers. It is important to qualify clients to be able to provide them with the best options within their budget. Talking about their budget at the beginning, makes for better, more productive business

  87. Just today, I’ve received a quotation request for a website design. I emailed her back informing her to please also state what her budget is (which I have clearly and boldly displayed the reasons at my website contact page).

    *****************************************************************************
    And here’s her reply:
    Do you not have a schedule of rates that we can work from?

    If the budget is 1million, that’s how much u will work towards
    If I tell you that my budget is 50 000, you will bill me that amount
    if i tell you that the budget is 20 000 you will do it to that amount.

    Lastly, if I say 5 000 – you may not even consider my request.

    So…that goes to show…that your marketing strategy does not work
    for me and we cannot do this project.

    Thanks
    *****************************************************************************

    Here is my reply:
    Dear XXX,

    You are correct to say that we do not fit for your company/project. That’s how we differ. You’ll be surprised we have a lot of clients who work comfortably with us. This is how we screen anyone before we decide to accept their project from their attitude and the way they look at things. It helps both sides from wasting their time. In fact, you have already helped saved a lot of time.

    Thanks.

  88. The “insert model”, usually costs between X and Y. I will need to learn more before making a specific proposal, but if our solution meets that need, is that going to fit into the budget?”

  89. It is amazing how lucky i was to find this forum/thread. I am a photographer dealing with lots of quotation requests daily. Most of them get deep silence, I am actually having troubles understanding why people are so like that. In over a year, I have only received the “sorry, next time” twice to be exact. And I don’t display prices on my website, but I do state “prices from…” description on each type of service I provide. The question for marketing gurus would be, how do we get the ideal customer?

  90. I absolutely ask each and every client. About 90% don’t directly answer, but some can give you some insight. They might give you a range, and upper limit or might say I like so-and-so’s website and they paid around $x,xxx.
    I ask it not to get the most out of them – but to help me, help them. I can make suggestions to add or subtract features for a successful project. One alternative I have implemented is giving options.
    Through experience I learned not to give one estimate for one result. Based on our conversations I will put together 2 or 3 options that have different prices/options and they can choose. I have been surprised a few times when I incorrectly assumed a customer would choose the lowest price option and they came back with the highest priced option.

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