What’s your budget?

[fattony]

On one side I absolutely hate this question but on the other I agree there is a need to establish the clients budget.

I recently enquired about a service but the package was bespoke and I was asked my budget, I skirted around for a bit but eventually gave a figure of £5k - £6k (my gut was telling me this bespoke package would be £5800) the quote came back at £6k, (amazing that) I now wonder if that’s a coincidence or a genuine price.

I see it as showing a weakness, because of that I hate asking potential customers that, but I need to find that information out early so I’m not wasting my time with someone who can’t afford the service, so how do you do it?

 

[billybob99]

On one side I absolutely hate this question but on the other I agree there is a need to establish the clients budget.

I recently enquired about a service but the package was bespoke and I was asked my budget, I skirted around for a bit but eventually gave a figure of £5k - £6k (my gut was telling me this bespoke package would be £5800) the quote came back at £6k, (amazing that) I now wonder if that’s a coincidence or a genuine price.

I see it as showing a weakness, because of that I hate asking potential customers that, but I need to find that information out early so I’m not wasting my time with someone who can’t afford the service, so how do you do it?

It's not rare for quotes to come back near your budget.

Happens a lot in the software dev space. I simply try to get as much info as possible from the client and send them a ballpark cost initially - the ones that never reply back, you can assume are not interested.

The ones that do come back and are serious, are happy to pay for a discovery phase, put together a software requirements specification and take it from there.

Obviously it varies industry to industry.

There must be some info you can capture to get a ballpark figure to each client without wasting a lot of time.

 

[Mr D]

One of my more recent employers had some good sales processes.
The sales rep would sit down with the client, go over what the client said they needed. Then tour the facility with the client, suggesting things as necessary or optional. then back to sitting down with client again. And establish budget now they were both on the same page.
Going over the list of requirements they'd discuss what was required, what was optional, what upgrades there were.
Meeting could take overall half a day or more.

Back at base or back somewhere comfortable the sales rep would type up notes and send spec in as discussed. Following week (or so) they'd go back with detailed breakdown of multiple setups. What was required being one of them. Which tended to be under the budget, not massively but comfortably under.
Leaving room for some of the optional stuff and upgrades. Which he just happened to have system specs and prices already printed out for...

Was rare for the sales reps to just sell the basic requirements in the end.

 

[ryedale]

I do the same as Billy Bob

Writing quotes can take up two hours per quote and I used to waste so much time on ones that were never going to happen

I tend to give a ballpark range before putting the proposal together and that immediately finds out if someone is looking for a £3000 website for £200 and saves me the effort of writing it all out.

 

[tony84]

I explain to companies what I want and I ask them what they will charge.
It is not down to you as the customer to tell them your budget, it is for them to quote their price.

If they ask you what your budget is, I would refuse to give it - you can make light of it or be straight to the point but that information is sensitive for exactly the reason you say. Even if they can not give you an exact price, just a ball park based on limited information would give you an idea if you are both on the same page or not.

In December I spoke to 2 companies regarding some compliance work, one came back at around £2k with someone coming to my office to sit with us for a day and impliment everything. The other quoted £4k for less than the first company, £2k was a little higher than I wanted to spend but that shows my expectations were wrong and I need to reassess.

 

[AstEver]

I explain to companies what I want and I ask them what they will charge.

This would be a perfect and desirable situation i.e. the customer's full awareness of their need and the seller's full understanding of the need.

 

[Alan]

If they ask you what your budget is, I would refuse to give it

In some sectors this is a vital question, when I was doing web design / development a client that wouldn't indicate a budget needs to instantly be dismissed as a time waster / tyre kicker - why because a website can be £100 or £100,000 and if you haven'y actually thought about a budget it indicate you are not taking things seriously.

 

[pentel]

A supplier who asks for a budget before giving any indication of prices is a supplier who will take you to the cleaners.

If a potential customer has a need for a £100 website and has a budget of £100,000 they won't be paying £100 if the supplier is aware of the budget. Would more like do it for £50,000 - £75,000. Bargain.

Lots of threads where this sort of thing has happened.

 

[DavidWH]

A supplier who asks for a budget before giving any indication of prices is a supplier who will take you to the cleaners.

Rubbish.

If a customer came in to our place, and said they had £500 budget, I can work with a £500 budget and set their expectations, rather than wasting hours working on a design with 3d letters, illumination, costing £1000's, that they can't afford.

An indication of price for a sign from us could be anywhere from £25, to £10,000.

If you have no idea what kind of sign you want, the budget will tell us what type you can afford.

 

[pentel]

@DavidWH I am pretty sure that If I was to come to you and ask you how much a sign 1500mm x 1000mm on 3mm white alupanel with the name of a company ( 10 letters) in standard red vinyl, 4 holes for fixing, would cost you would be able to give an "in the range of £*** - £***" sort of response without needing to know my budget.

I would be able to do the same with what I manufacture.

Unfortunately not everyone works that way.

Helping a customer who does not know what they want is also a regular occurrence, however a few questions will usually pin it down enough to be able to give some sort of range of costs and options for the customer to consider.

 

[DavidWH]

Yes if you came to us and had an idea what you wanted but sadly 99% of customers don't.

I had a call on Friday, it literally went "how much to sign up my Berlingo Van?"

I gave a from price, and they promptly hung up. It's impossible to give an accurate price of such basic information.

 

[tony84]

@DavidWH - you would not start a design etc before agreeing a price I assume. You would probably say as you mentioned in your post, our prices start from £x up to £x depending on the complexity/size etc.

@Alan - I agree but you would presumably try to get an understanding of what they want. Ask a few questions, get an idea and that would narrow your prices down. You are hardly going to say to a customer it could be £100 or £100,000 are you? You would ask a little about what they want, try to build up a rapport and then after 10 minutes or so give them an estimate subject to sitting down and getting everything down on paper... I assume? I have dealt with a few IT companies recently and all have given me a ball park subject to getting a full spec written down and signed by both sides.

We get people calling and asking how much we charge. Due to regulatory requirements, we have to have a maximum so our maximum fee is £1250 and our minimum is £0. Within 5-10 minutes on the phone I can normally give them an exact figure of our fee, the only time that changes (3 times in 7 years) is when the customer has given us incorrect information about their circumstances.

 

[Gordon - Commercial Finance]

I don't like getting asked what my budget is, because I think more often than not the real question hiding behind that is "how much can I get away with charging you?"

I do understand that its difficult though and its a good way to save everyone's time being wasted, but I like to keep my budget to myself.
I'm meeting a building contractor at a property tomorrow that I'm developing to get quotes for various bits of work. If he asks me what my budget is I won't be telling him. I want to know how much the work costs first, and then whether I go ahead or not with what I'm thinking about doing for the place will depend on whether the budget stretches to it.

 

[DavidWH]

@DavidWH - you would not start a design etc before agreeing a price I assume. You would probably say as you mentioned in your post, our prices start from £x up to £x depending on the complexity/size etc.

@tony84 we try and ensure that happens where ever possible, as our design service isn't complimentary, or we charge for the design time separately.

I'm slowly putting together a price guide for some bits, all with a realistic from price, but like everything, there's always something more important to do for a customer.

 

[fattony]

I don't like getting asked what my budget is, because I think more often than not the real question hiding behind that is "how much can I get away with charging you?"

I do understand that its difficult though and its a good way to save everyone's time being wasted, but I like to keep my budget to myself.
I'm meeting a building contractor at a property tomorrow that I'm developing to get quotes for various bits of work. If he asks me what my budget is I won't be telling him. I want to know how much the work costs first, and then whether I go ahead or not with what I'm thinking about doing for the place will depend on whether the budget stretches to it.

Because you think that if you say your budget is £60k their price will be just under, here’s your price sir, you’ll be pleased to see it’s less than what you budgeted.

And always wonder if they added and extra £10k on because it’s still within budget

 

[sherbetdipdab]

I think it's fair if you are selling something (eg software or web dev) that can range massively in price. Something like "just so we are on the right page, and we are not wasting EACH others times, are you thinking more the £1000 end or the £10'000 end?". They can say which end and often will say errrr around the £6-7000 which then gives you an idea. If they say £1000 then you know they are not right for you and time wasting and can politely decline.

 

[Gordon - Commercial Finance]

And always wonder if they added and extra £10k on because it’s still within budget

Yes that’s my fear. If the cost would have been £40,000, but I say my budget is £60,000, then they quote me £55,000 and as long as I never find out if should have been 40 then I will be happy that I got a deal within budget.

 

[Mark T Jones]

Whilst I understand the idea of filtering time-wasters, I’d suggest that as the supplier / salesperson it is your role to manage expectations, perhaps with some broad indication of price range?

 

[tony84]

Or rather than asking budget, why not tell them what you would charge. That will either get them running a mile or stay.

 

[fattony]

Yes that’s my fear. If the cost would have been £40,000, but I say my budget is £60,000, then they quote me £55,000 and as long as I never find out if should have been 40 then I will be happy that I got a deal within budget.

I completely agree here.

Tony84, that’s not a bad shout, case study on website with size of project and budget could also help

 

[Alan]

Whilst I understand the idea of filtering time-wasters, I’d suggest that as the supplier / salesperson it is your role to manage expectations, perhaps with some broad indication of price range?

I'm not sales person but it is called qualification I think.

I agree, using the words 'what is your budget' is likely to get a negative emotion triggered and clamming up.

Although the other day was looking at a car, and the sales person asked 'what is your budget' and I was happy to set an expectation rather than they waste my time showing me cars I wouldn't buy.

 

[AstEver]

The question ought not to be whether asking about the budget is appropriate or not but rather in what situations it is appropriate and in what it is not.

A similar question, good in dealing with price buyers, is 'what price are you looking for?'.

 

[Gordon - Commercial Finance]

Although the other day was looking at a car, and the sales person asked 'what is your budget' and I was happy to set an expectation rather than they waste my time showing me cars I wouldn't buy.

Car salesman are a funny one with this. I once went to go and look at cars and the guy asked me "what's your budget" and I think I told him £10,000 or something. Then he proceeded to start showing me cars that were £11,000 and £12,000.....
I asked him what he was all about - I told him what my budget was are you suggesting that I could get these more expensive cars for my budget, or are you just trying to encourage me to be financially irresponsible and overspend?

 

[alan1302]

Car salesman are a funny one with this. I once went to go and look at cars and the guy asked me "what's your budget" and I think I told him £10,000 or something. Then he proceeded to start showing me cars that were £11,000 and £12,000.....
I asked him what he was all about - I told him what my budget was are you suggesting that I could get these more expensive cars for my budget, or are you just trying to encourage me to be financially irresponsible and overspend?

And what did he say?

 

[Root 66 Woodshop]

I think because of products being so widely available on the internet these days, that asking "what's your budget" enables you to understand what the customer is expecting from you...

You can go online and buy a Euro Cylinder for as little as £4.00

But is it the correct one that you need?

You can go online and buy a basic CCTV kit for £199.00

But can you install it, do you have the tools to drill through your walls?

While some kits on the market are as cheap if not cheaper than the £199 mark in some cases, it's all about your property, and what you expect from the equipment you've purchased... we wouldn't even consider installing anything off the internet that costs £199.00 as majority of these kits have fixed lenses, therefore in some cases not fit for purpose... but when we ask the question... we nearly always get "I don't know"... which then allows us to lead onto the next question... What do you expect the equipment to do? - It's at this point we can determine whether they're fishing or whether they're worth the business.

As some have said, it can be a question that is asked you may not want to answer... but if that's the case, how can you expect a service never mind the correct service if you don't give us the information we need?

 

[Gordon - Commercial Finance]

And what did he say?

To be honest, I can't remember exactly.
I do remember that he certainly wasn't suggesting I could get a 12k car for 10k. He was trying to get me to "stretch" my budget.

 

[Gordon - Commercial Finance]

I'm not sales person but it is called qualification I think.

Now that I'm thinking about this, and you mentioning "qualification", I suppose it is not that much different to what I do. I get a lot of enquiries about financing property auction purchases, and one of the first things I ask is "how much of your own money can you put in?". Filters out the Homes Under the Hammer people who think they can be developers and be on someone else's pound.

 

[estwig]

I get a lot of numpties calling me, either unrealistic or just fishing for info, I use a lot of qualifying questions, mine are more specific than this:

What is your budget for the whole project (assuming you are only part of the project)?
When are you thinking of going ahead?
Have you given any thought to what colour, size, style you would like it to be?
Have you asked the wife (business partner)?
Are you ok with paying a deposit?
Could you send me some info about what you want?
Have you given any thought to dealing with the extra enquiries, or knock on effect of this?

So many you can ask and then gauge the response, there is no need to ask, 'what is your budget' as that will often kill the deal, or at least create a hurdle.

 

[Inva]

Our company is in the bespoke web development field and i understand this situation completely. I think that in some fields setting a budget makes a difference in the initial phase. A lot of people are put off by this, but i think it's a mistake not to declare your budget in a bespoke project.

It's in the client's advantage to say "I have X budget, what can i get with this?" Then they can shop around and ask the same question at every company, take offers, and figure out who gives more product for the price. In our case we sometimes give 2 additional options, one with a little lower budget and one with a little higher budget so that they can better understand the possibilities. But as a client you can always ask for this explicitly: "I have X budget, please tell me what i can get for this and also a bit less and a bit more".

In a perfect world every client would come with a 20 page brief and be quoted on it, but in the real world, most have no clue what they want and no plan whatsoever. You then have to guess both the features of the project and the budget of the client, therefore essentially doing their business plan for them, with 99% chance of wasting your time because they wanted something else or cheaper.

 

[AllUpHere]

I'm not sales person but it is called qualification I think.

I agree, using the words 'what is your budget' is likely to get a negative emotion triggered and clamming up.

Although the other day was looking at a car, and the sales person asked 'what is your budget' and I was happy to set an expectation rather than they waste my time showing me cars I wouldn't buy.

Cars aren't really relevant to this conversation as you can easily find out if the price has been artificially inflated as they have a 'going rate'. At a dealership having the prices on the screen is also a bit of a give away.

 

[Gordon - Commercial Finance]

Cars aren't really relevant to this conversation as you can easily find out if the price has been artificially inflated as they have a 'going rate'. At a dealership having the prices on the screen is also a bit of a give away.

I think they are as the buyer's budget will determine which cars the sales person shows them/tries to sell them.
Only relevant if the buyer is being led by the sales person I suppose, not relevant if you're wandering around sorting yourself out, or if you know what car you're there to see. But then if that's the case, no one is asking you your budget.

 

[AllUpHere]

I think they are as the buyer's budget will determine which cars the sales person shows them/tries to sell them.
Only relevant if the buyer is being led by the sales person I suppose, not relevant if you're wandering around sorting yourself out, or if you know what car you're there to see. But then if that's the case, no one is asking you your budget.

I was referring to others members not wanting to be asked their budget, because they feel like the salesperson will then just provide a price based on their budget, not based on the actual cost of the work or product. Obviously this isn't a problem with cars.

 

[Gordon - Commercial Finance]

I was referring to others members not wanting to be asked their budget, because they feel like the salesperson will then just provide a price based on their budget, not based on the actual cost of the work or product. Obviously this isn't a problem with cars.

True.
Slightly related I suppose, but a bit of a tangent.

 

[BusterBloodvessel]

I understand completely not wanting to give a budget. My usual tactic is to try and often keep things friendly and upfront along the lines of;

“I’m investigating doing <xyz project>. At this stage I really don’t know if it’s something we can justify or go ahead with but you’re the expert and I’m coming into this blind - I don’t know if it’s going to be £500 or £50,000. If you can give me a ballpark or full quote I need to look at it and see if it’s something that works now, perhaps something we plan into next years budget or maybe it will be way beyond payback or justification”

Personally I think that gives an honest reply without naming any budget. There’s an element of “acting dumb” but at the end of the day if it’s something completely alien from my business (e.g. I sell car parts to national distributors and I’m asking for an app to be built) then to a point I AM dumb! I know what I would like, but I have no idea of what i would like is even achievable and, if it is, at what cost?

 

[Alan]

because they feel like the salesperson will then just provide a price based on their budget, not based on the actual cost of the work or product.

Do businesses only speak to one salesperson? I though it is pretty much standard practice to get more than one price, especially if you are unsure of the price, except in trivial situations? I would have thought it very unwise for a Salesperson to price based on your budget rather than what gets delivered, as they are likely to loose the sale to a competitor.

then to a point I AM dumb! I know what I would like, but I have no idea of what i would like is even achievable and, if it is, at what cost?

In this situation, you are fishing not buying, so you probably shouldn't even be talking to a salesperson, but doing research either through your network, or using consultants to advise.

 

[Mr D]

Do businesses only speak to one salesperson? I though it is pretty much standard practice to get more than one price, especially if you are unsure of the price, except in trivial situations? I would have thought it very unwise for a Salesperson to price based on your budget rather than what gets delivered, as they are likely to loose the sale to a competitor.



In this situation, you are fishing not buying, so you probably shouldn't even be talking to a salesperson, but doing research either through your network, or using consultants to advise.

My boss in one job took on the role of speaking to the salesmen while I was not in the office.
Security system, £7000 budget that half we were getting back from the council, only up to that figure. Spend £7500 and its all our bill. Spend £6000 and they send us a cheque for £3000. Weird but workable, government spending.

She got 5 quotes in writing then left it to me as the expert to sort out which 2 should be presented to the board. With me to do the presenting and her to close.
She managed to get 5 different quotes for some quite different work the only common part was security doors - and the spec for them was all over the place.
We had a set of written specs I'd worked out, ignored by her.

Managed to get 4 of them to do new quotes based on written spec and within budget.

Dippy manager saying what came into her head to each salesman and showing her ignorance of security. Of course they push for what they want to sell rather than what the customer insists on buying when the customer appears to not have a clue.
I was somewhat amused by the quote that included 8cm thick steel door on the office that had a sliding receptionist window easily broken with a fist. Must have been a very persuasive salesman.

 

[Inva]

“I’m investigating doing <xyz project>. At this stage I really don’t know if it’s something we can justify or go ahead with but you’re the expert and I’m coming into this blind - I don’t know if it’s going to be £500 or £50,000. If you can give me a ballpark or full quote I need to look at it and see if it’s something that works now, perhaps something we plan into next years budget or maybe it will be way beyond payback or justification”

Translation in English: "Could you please do my business plan for me, pretty please?"
Personally i would not waste my time, especially since you included this part "perhaps something we plan into next years budget".

I will gladly pay you Wednesday, for a hamburger today?

 

[BusterBloodvessel]

Translation in English: "Could you please do my business plan for me, pretty please?"
Personally i would not waste my time, especially since you included this part "perhaps something we plan into next years budget".

I will gladly pay you Wednesday, for a hamburger today?

Your analogy doesn’t make any sense whatsoever. I am not asking for something today to pay later.

I am scoping out a project to see if what I want is (a) even possible, (b) affordable now (c) not affordable now (d) affordable or not affordable now but could do more or less for me.

Ok my description of £500 or £50,000 was an exaggeration! But I can think of 2 projects I have worked on in the last 6 months. The first was a photography project that I thought from past experience might cost around £5000. Chatting with a photographer and outlining what I wanted to achieve actually resulted in them suggesting an alternative method of doing things and I got exactly what I wanted for £1200.

The other was a web based system that I thought might be around £3000, again based on my (limited) previous experience with that sort of thing. Again talking through our business and what we were working towards, the supplier was able to do this for £3500, but they actually suggested extra things they could do and demonstrated some systems they had created for similar companies - however this case in at a total of just over £7000 - as this was in November I didn’t have the spare budget to go for that but I could see the benefits of spending that extra and put it into this years budget - I actually just signed off on that project last week.

Perhaps I wasn’t so clear with my post (and perhaps we have deviated from the original post a little) but I Generally think that where you can have open conversations with suppliers about what you want rather than “I want this and only this” and or “this is my budget and that’s that” can help them to better understand your needs and hopefully get you exactly what you need/works for you.

If somebody comes to me for car parts in the product areas I work in, I can analyse their range from the ground up, tell them where they are going wrong, show them their coverage, lost sales, potential extra sales or upgrade opportunities. That’s what I do, and it’s what I know inside out. If I approach somebody for a web system such as in this example, then I’m looking for the same expertise that they have...not me.

 

[Noah]

Recent experience : We were asked to do new product development by a business which was already producing something similar, but were surprisingly vague about specifics. I worked out our costs and gave them a detailed quote; they were taken aback but respected the justification behind the quote and asked if we could meet in the middle.

I reviewed quote, drew out some assumptions, and offered to meet their budget on the explicit understanding that this would limit flexibility on specification. They are considering, probably going to bite.

With respect to budget, I didn't ask and they didn't offer until after quote; I was happy with that because I am confident in our pricing on materials, labour, and fixed costs, and they can take it or leave it - we do not need the project (although it would be nice to have it). If any of these conditions are not met, I imagine to would be much harder to quote before budget.

 

[Alan]

If somebody comes to me for car parts in the product areas I work in, I can analyse their range from the ground up, tell them where they are going wrong, show them their coverage, lost sales, potential extra sales or upgrade opportunities. That’s what I do, and it’s what I know inside out. If I approach somebody for a web system such as in this example, then I’m looking for the same expertise that they have...not me.

That is consultancy, I assume you would charge for that work if there was a reasonable amount of work involved?

Actually charging for consultancy is a reasonable way of weeding out the tyre kickers.

If you came to me and asked what is possible and not possible with a web app and expected me to analyse your business requirements and work out an optimal outline for a solution with pros and cons and indicative prices, then I'd suggest an initial consulting ( discovery ) phase of say £3,000 as an example. If you are a tyre kicker with no budget you would probably decline.