How to ask your client about their budget before creating a proposal

How to ask your client about their budget before creating a proposal

Asking the hard question upfront, “What is your budget?” will save all parties involved time, energy, and headache in the future. In this chapter, we ask several of the creative industry’s best and brightest minds how they approach the question of client budget and what they do when a client resists answering that question.

“If someone doesn’t want to reveal their budget to me, it is a bit of a red flag”. – Dennis Field

Client assessment interviews are a skill we learn over time. Even the most timid of creative professionals can learn to enjoy them (I speak from experience). But there’s one question that makes the stoutest of creatives stutter and stammer.

What’s your budget?

Writing a proposal without knowing your client’s budget is a terrible waste of your time. Nail this before you put pen to paper and you will put you in a far stronger position to win the proposal and subsequent project.

Of course, it’s not usually the budget question itself that causes creatives to clam up, but rather the objections we think our clients will give in response.

So how do you get your client to answer the question of budget?

We asked several of the creative industry’s top dogs two very direct budget questions:

  1. “How do you approach the question of budget with your clients?”
  2. “What do you do when a client resists revealing their budget?”

Here’s what they had to say.

Paul Jarvis of The Creative Class

How do you approach the question of budget with your clients?

I skip the back-and-forth by listing what my pricing starts at on my website on the homepage, the about page, and my portfolio page. It clearly says I don’t work on projects under $X. That way, if a client doesn’t have a budget of at least $X, we don’t waste each other’s time. Plus, if they do proceed, then they already have some idea of what the price will be, so it’s much less scary since we both know we’re on about the same page (or at least the chapter, ha). So listing my pricing on my site skips having to deal with budget questions, and then brings it down to specifics.

What do you do when a client resists revealing their budget?

If a client won’t tell me they have at least what my website says, then I’m not sure why I’d work with them. I only work with clients who trust the process and collaboration. I can’t remember any clients that haven’t revealed their budget to me though. Maybe that’s because I’m so upfront with my own pricing.

Kurt Elster of Ethercycle

How do you approach the question of budget with your clients?

I base my budgets on the value that client will receive. An ideal project budget represents a huge ROI for the client, and equitable compensation for me. One way to establish that value is to ask, “What’s the impact to your organization if you don’t complete this project?” An indirect way to ask and gauge the state of the organization is to ask, “Why start this now vs six months ago or six months from now?” That’s a great question which reveals volumes about motives.

What do you do when a client resists revealing their budget?

When writing a one-off proposal for a client, I do need to know their budget. And many people will resist revealing it because they believe I’ll just bill whatever amount they reveal. Initially I’ll ask outright, “What have you budgeted to achieve your vision?” or “What have you budgeted to ensure your project’s success?” If they resist, I’ll press with a range intended to shock. “Is it closer to $5K, $50K, or $500K?” That question often works.

Dennis Field: Product Evangelist at Invision

How do you approach the question of budget with your clients?

To me, I don’t make budgets an issue. They shouldn’t be. The simple fact is that the proposed clients and I are expected to work together to create the best solution possible. This starts from the very beginning of the relationship.

My approach is to lay out my terms and gauge if that fits within their expectations. If not, we know upfront and we can look at alternative options for them (usually referring them along to someone else). I like to be honest and ensure from the start we’re on the same page. If a proposal is needed, I’ll ensure I have the full scope and then only craft the full proposal once I’ve given them what they can expect from an investment.

It does me no good to play the guessing game when it comes to creating an estimate or proposal. It’s a ton of wasted time and energy, and I’ve learned from my experiences that you can get sucked into proposal creation mode with prospects. I’m up front that only if they need it and are ready for it, will I draft it. The chances of closing that deal is much higher, because the proposal is just outlining the detailed expectations of the project. They’ve already been sold prior to the proposal process even begins.

What do you do when a client resists revealing their budget?

If someone doesn’t want to reveal their budget to me, it is a bit of a red flag. We’ve all been in the situation where a prospect says ”Hey, I’m not really sure of my budget.” You then craft a detailed proposal for them to respond with, “Well, I was thinking it would be half that cost.”

Seriously!

Now what do you do? You’re in a spot where you either come down to their number (which sadly many do) and give a ton away for free, or you walk away after wasting hours drafting the perfect proposal and trying to guess at what they had in mind.

I believe this is a bit of a tactic, so what I do is let them tell me what things are valued at, I let them know up front what I’m valued at by giving them past examples. More often than not they’ll either say “Eeek! That’s out of budget.” or “I think that’s doable. Let me confirm and I’ll be in touch.”

So to answer your question, if I do ask it’s only because I’m having doubts and we need to get to the numbers before I can continue. If they refuse, I let them know that it’s important so I can ensure that we can deliver the appropriate solution for them. I stress that our job is to work together on the best solution possible for your company. If I can’t work with your budget, I know someone who may.

The important part of working with clients is the relationship part. In any relationship you have to ask the tough questions to get to the next step and to trust one another.

Keith Perhac of Develop Your Marketing

How do you approach the question of budget with your clients?

It really depends on how the client got in touch with us. If they’re a completely cold lead, I try to set expectations that any project they do with me will probably need a budget of over $10,000. In my experience, this seems to be the magic number, as it weeds out clients who are not serious about the project. I get a fair share of one- off emails from people who want Etsy clones and who have a budget of $1k - $5k. Setting the lower limit for a budget also makes sure that I’m not going to be spending hours on the phone and creating custom proposals and then have the client say that they have no money. (I’ve actually had this happen once, where a client said they thought the $10k minimum was just a guideline, and that we could do the project for $5. Sometimes I don’t understand people.)

For warmer leads (like referrals) I’ll always get on an initial call, mostly because I love talking to people about what they’re doing. During the call we’ll talk about initial budgets, see what they’re looking to spend, and try to work out what we can get done for that amount.

I used to be really nervous whenever I got to the topic of money, and not want to even broach the subject. Sometimes I’d even start working on project before we decided on a budget.

Not. A good idea.

At this point in my career, there are more people who want to do things with me than people I have time to work with. That doesn’t mean I have a ton of clients with budgets—it means that there are a lot of people who want to do things “as a partner” or “for equity.” As much as I wish I had that much availability, I just don’t — and it has forced me to have the budget conversation earlier, and be more direct with clients about what they can expect to spend. And in the end, people are much more appreciative of that. They don’t want to spend 6 weeks thinking they’re going to go with a developer and then find out that they’re too expensive.

Set expectations early, and I find that everyone is happier.

What do you do when a client resists revealing their budget?

I can understand why clients are reluctant about giving out their budget. It’s the same reason that a lot of developers are reluctant about giving out a proposal without hearing a budget first!

When a client is talking to you for the first time, there’s an anxiety that they’re going to be taken advantage of—that if they say the budget is $20k, that the quote is magically going to come it at $19,950, even if the deliverables aren’t worth that. And I respect that, as it’s a very real fear. Working in enterprise sales for 6 years has shown me that budget is a delicate balancing game on both sides of the table. Because negotiations have to start somewhere, I am usually happy to give a preliminary budget, with the full expectation that this will change as we further define scope.

This sometimes goes well, and sometimes doesn’t, but at some point someone has to put out the first number. Because development budgets are always woefully underscoped, I choose a project that I’ve done in the past that has a similar scope, and increase the budget by about 25%. That gives us a little wiggle room so that we can go down to match a client’s budget, while assuring us that the client has a realistic budget in mind in case things go over.

Marie Poulin of Digital Strategy School

How do you approach the question of budget with your clients?

I indicate a “starting at” price on my website, so most people who get in touch already have a rough idea of my pricing. This decision weeds out a lot of low budget clients, and prevents issues with the client revealing their budget.

At the point that they are contacting me, they already are committed to “investing” in their website, and they know they need more strategic work, so my proposal is not going to end up in sticker shock.

I think one way you can really start to open up that conversation is by just being very honest. I usually say something like, “Getting a sense of your budget gives me a better sense of the recommendations that I can make and what’s possible. We can achieve a lot or a little depending on how much you want to invest, and over how long. How deep I’ll get into your strategy and features will depend on your budget, so let’s get a sense of what would be feasible for you over the next 3 to 6 months.”

I think the car dealership analogy often makes sense here: if you want into a dealership, you already have a sense of what you can afford. You can’t expect a Jaguar if you have a budget for a Ford. Get to the money conversation early, and don’t beat around the bush!

Philip Morgan, author of The Positioning Manual for Technical Firms

How do you approach the question of budget with your clients?

Earlier on in my career, I always avoided talking about money with my clients. This had negative effects on me, the project, and my ability to get paid in a timely fashion every time. Business is about more than money, of course, but… it’s also about money. I’m pretty sure it was a combination of Brennan Dunn writings and Blair Enns’ Win Without Pitching Manifesto that got me past that limitation.

So now, I approach the question of budget through a process that begins during my first conversation with a prospect. I make it a point to ask: “How does your business make money?” It’s a very simple question that gets the potential awkwardness of discussing budget and money off the table right away. It’s phrased in a way that’s not nosey (for example, asking “What is your salary?” would be the wrong way to discuss money because it’s perceived as nosey). If I’ve been discussing money issues with my client from our first conversation, then later when the issue of budget for my work comes up, it won’t be the first time we’ve mentioned money!

Of course, I try to only do work that has a clear financial payoff for my clients. But even if the work doesn’t have that clear payoff, discussing project budget is a lot easier if you have the context that the “How does your business make money?” question will provide you. If that question has revealed to you that your potential client makes tens of millions in revenue and they’re arguing with you over spending a few thousand more on your work, you have lots of ways you can address their budget objections.

What do you do when a client resists revealing their budget?

This hasn’t happened since I started using the approach I describe above, but if it did, I would take it as a sign I have not earned my prospective client’s trust and I would not move forward in the sales process until I had earned their trust. Trust is not a binary “mistrust” vs “completely trust” thing. It’s possible to earn trust in small increments.

That’s why I like to start not by asking “What is the budget for this project?” but instead with a more “safe”, general question of “How does your business make money?” If a prospect is very guarded in their answer to this question, I know I have more trust-building to do. On the other hand, if they reveal revenue and profit margin and cost numbers right away, I know that I am further along in earning their trust.

Earlier in my career, I would treat every prospect as a potential “whale” and every project as my only chance ever to land and eat that whale (I think doing a bit of agency work trained me to think this way). Since then I’ve realized that it’s often better to think in terms of the smallest possible increment of improvement I can make for that client and propose that. The client and I can always ride the wave of success from a small, successful project into more ambitious engagements in the future. So this is another way to deal with the trust issue. Build it in little increments.

So to answer the question plainly, if a client resists revealing the budget, stop pushing, assess the situation, and find a small way to build trust with them. Maybe that’s a so-called “roadmapping session”, maybe it’s a smaller version of the project you had in mind, and maybe it’s just simply saying, “Maybe now’s not the right time to discuss budget. Could you instead help me understand how this work will benefit the business? I’m always interested in knowing how I’m making my clients’ lives better.”

The Common Thread

From these snippets we can see a few common threads that help us get to the bottom of the budget problem.

  • Bring up the subject of money early and often. Don’t be shy.
  • Be as direct as you can.
  • When asking for a budget, suggest a few ballpark figures.
  • Try orientative pricing on your web site to establish your minimum working fee.
  • Never let the budget question go unanswered past the first client assessment.
  • Don’t be afraid to say goodbye to clients who are unwilling to give their budget. But if their budget doesn’t work for you, refer them to another consultant who can help.

In the end, it comes down to repetition. The more you can ask the question, the easier it gets. If you’re really nervous, try standing in front of the mirror and practicing variations of the question. It can help you to feel more confident when the moment of truth arrives. Stand tall and ask with confidence!

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Preparing for your initial client assessment interview

Set yourself apart through your interview preparation and organization. Before the interview, talk to your client to learn about their business and their needs, be sure to accurately communicate the interview time and day, and provide a clear and definitive meeting place or platform.
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