People can be funny when it comes to talking about money, and that includes clients. It may be they think it’s rude to talk about money, or if they don’t know you well, they’re wary to share their budget with you as they deem it “sensitive information”. But when it comes to business, the money conversation is a necessary conversation to have.
Understanding a client’s budget is the base upon which you can build ideas that will help them find success, and help you keep the project profitable. It is IMPOSSIBLE to write a winning proposal without one.
To avoid wasting your time talking to a client who can’t afford to work with you, here are some tips on how to ask for budget.
Should you ask your client what their budget is?
Knowing your client’s budget early on is crucial to moving any project forward. Budget will determine whether or not your lead is a good fit financially, determine the scope of the project, and help prevent scope creep. Asking for it up-front and will save you both the headache of unnecessary meetings, position you as a professional, and help you gain the trust of your client.
Some prospects will be hesitant to discuss the numbers with you, so you need to explain that knowing what they have to spend will help you help them.
For example, if you’re planning to buy a new car, chances are you have a budget in mind to work with. Explaining your budget to the salesperson will help them find you the right car for you faster than if you let them show you every car on the lot – 2001 Hondas to 2018 BMWs. Getting to the budget conversation early saves you time, and determines if you can afford what the dealership has to offer in your price range.
Asking for your client’s budget is no different. It is critical to creating a strong proposal that meets your client’s needs. Having the conversation early in the sales process will make it easier and faster for you both to get down to business.
How to ask for your client’s budget
How you ask your client budget questions is important. You don’t want to come off as money-hungry, but you also don’t want to come off as timid and too scared to ask. Your client should understand that you need to know the numbers in order to develop a proposal that solves their business challenges.
To start the conversation, ask your client some open-ended sales questions. This will get them to open up about what they have in mind for the project, explain their pain-points, and encourage them to share more information that will help you customize the proposal.
Explain why you need to know the budget – “What kind of budget could we expect to work with to complete this project? This will give us a better idea of what we can do to meet your needs, and help us determine the timeline we can complete it in.”
An analogy that might be easy for them understand is one of building them either a sailboat or an ocean liner. You can build both to be seaworthy, but their budget will dictate which solution is possible.
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Educate your client about your business
Keep in mind that this could be the first project of its kind for your client so they may not know what kind of money they need. They may be looking for an estimate of what you would charge for the project to help define their budget.
Take the opportunity to educate prospective clients about your business and how you price your proposals. Explain similar projects you have done in the past and what the price range was for each. This allows people to see the kind of work you’re able to provide and opens the door for them to say whether or not your services and prices are a match for their expectations.
Talking about previous project budgets also gives you the chance to gauge the client’s reactions. If you throw out a large number, and you can suddenly slice the tension in the room (or air over the phone) with a butter knife, chances are the client was expecting a smaller figure.
Whether you end up getting a defined budget, or a ballpark range, by the end of the conversation, it should be clear if both you and your client will be able to work together, and whether it’s time to move to the proposal stage.
Find out what the project is worth to them
Rather than focusing on how much the client has to spend, change the conversation to be about what the results of the project will mean to them. Highlighting the ROI allows your client to see into their future, and forecast the success they can expect.
If you explain that including a certain feature is going to cost $5,000, but that it will generate $8,000 in revenue because of X, Y, and Z, the client is more likely to focus on the ROI than on the initial $5,000 they have to shell out.
Position the value your agency can deliver rather than focus on the price you charge.
Know who you’re speaking with
When discussing available budget for a project, product, or service, make sure you’re speaking with the right person; someone who is able to make the decision when it comes signing the dotted line of the proposal.
The first person you speak with may not be the final decision maker, but it doesn’t mean this person isn’t valuable to you. They may be an influencer who convinces the decision maker that your product/service will solve their business challenges.
Whoever you speak with at your prospect’s company, acknowledge their role and build a relationship with them – make them feel as valued as the decision maker you’re trying to reach. A great way to do this is to include them in your dialogue. “Along with yourself, who else would be involved in making the decision?” and ask about the opportunity to meet with them as well.
Don’t be afraid to turn the lead away
What do you do when a client resists revealing their budget? If you’ve asked a few times, and your lead still hasn’t given you a clear budget to work with, don’t be afraid to cut the cord.
It may seem like a risky move the first time you do it, and like you’re turning away ‘good’ business, but it’s the mark of being a professional and knowing what your ideal customer looks like. Time is money. To remain profitable, you can’t waste time with dead leads who won’t finalize a budget, or seem like they are inherently flaky.
It’s understandable for your client to not know their full budget up-front, but after a thorough discussion with them, they should have a better sense of what you can provide, and what money they have set aside for those services.
If you’ve explained your services and the value you can deliver, but they’re still wary on giving you a defined budget, then it’s a red flag that they may not be your ideal client.
Knowing when to walk away is key to scaling your business and gaining customers that want to work with you.
Budget can be a tough subject to broach when you’re looking to close a deal. Some clients will be more open than others when it comes to talking about money; some will be more experienced in developing realistic budgets for the kinds of projects your company specializes in.
Asking for your client’s budget is a critical part of the sales process. It will help you vet leads, focus on quality clients, and write clear proposals that are destined to be signed.