By Michael Killen from Sell your service.
Who is this post for?
If you’re tired of screeching to a halt or feeling awkward about project budgets, then this is for you. This is without a doubt the most important question you can ever ask.
This question has stopped me from working with poor quality £500 customers. It’s the fastest route to changing your business. I promise that by the end of this post you’ll start finding higher paying customers.
So you want better value customers? You also want customers that pay more. Finally you want to increase the chance that you’ll make MORE MONEY each time you speak to a customer.
I was sitting opposite two customers, both for the same project. This was last year, my website design business was doing OK, but needed a serious injection.
So we’re talking away and I’m learning about what they want. Responsive site, SEO, portfolio, CMS. Blah blah blah. Out of no where, I asked-
“So what’s your budget?”
Shit. We had literally been talking for 10 minutes. I had never met them before. They sat there in silence and I looked like a gormless goon.
When I worked in lead qualification for a large data security company, it was the first question we asked. Literally. But being 25 and thinking that I knew it all, I skipped that question.
I wanted to be different. I wanted to be a designer that focused on what you wanted. Eventually customers would respect that and want to spend more money with me, right?
So there we were, a big project (which secretly I was dreading, because they had lots of ideas. Experience taught me that they don’t want to pay for it) and two guys who wanted something to happen.
“You are the only designer we’ve spoken to who’s asked us that.”
I was stunned, I thought I was going to get thrown out. I assumed that customers decide the project budget and I decide to take it or not.
“We’ve got £3500 in our budget, is that something you can work with?”
What?…We had moved away from me asking them questions. Now they wanted to see if I was OK with the budget. Now they were looking for my approval.
The meeting wrapped up and I sent the proposal. I thought about what I asked. The question about the budget. Inside my proposal I took their budget and broke down the costs. Line by line about what they’d be spending and what I’d be delivering.
I need you to ask ‘WHAT’S YOUR BUDGET?’. I need you to ask this within 5 minuets of sitting down and talking to a customer. Seriously. So ask new leads WHAT IS YOUR BUDGET?.
1. But that’s so rude! I can’t ask that!
You think it’s rude because you feel there is an imbalance. However I bet that whenever you buy someone, you ask how much it’s going to cost. Is that rude to ask it the other way around?
The Ferrari principle.
I’m not really a super car fan. But if I walk into a Ferrari dealership and I get talking to the sales guy, he will ask me, what’s my budget’. He’s not being rude, he’s asking what I’m willing to pay for a car. If I low ball him and reply £3500, he’s going to offer me one of their wheels.
However, if I return with a reasonable amount. Say, £250 000, we can get talking. I’d only be offended if I didn’t have the cash in the first place.
You’re not being rude at all. You’re running a business and people will respect you because of asking. Big business and successful businesses ask this question. How often have you written out a proposal only to be told “ooh, we expected only to pay £400”?
Start positioning yourself as an in demand expert. In demand experts ask what the budget is. They are gauging how realistic the customer’s goals and resources are.
2. I do ask that, but they won’t answer me.
Next time you ask for their budget, understand that you need to be silent. The MOST POWERFUL way to get the answer you want, is to be quiet.
It is going to get super uncomfortable. Uncomfortable and long. A long, uncomfortable silence.
The principle is thus – ask what their budget is. Say, ‘So what’s your budget, give me a pound (£) figure.’ Then stay totally silent until they give you a proper answer. If they don’t respond, then stay quiet.
If they make up an excuse, then stay quiet. If they give you a ballpark, then stay silent.
Staying silent after an answer is negotiating 101. You’re not forcing them to talk to you, you’re not forcing them to buy from you. But you need to know what resources you’re working with and what they expect from you.
By staying silent, you are telling them that ‘your answer is unacceptable’ without actually telling them. Instantly they’ll begin searching for your approval again.
Get used to the silence and how uncomfortable it can be. I have waited for 5 minutes (because I was literally watching my watch) before they finally snapped. In one meeting they kept talking and talking. Giving excuse after excuse until I packed up my stuff and began walking out.
In fact, they did then give me an answer but I decided that if it takes 5 minutes to give me an answer, I wouldn’t like working with them.
3. They ask ‘well how much will this cost?’.
This is a great answer. Businesses who have been around a while might reply with this. This is fine. It’s a simple objection. More of a test than anything.
You see, the website/graphic design/copy writing doesn’t COST them anything. A cost implies that it’s a wasted expense, something that is lost because they have to buy it.
You’re providing a return. A return on their investment. It’s your job to help them believe with confidence that you are the least risky option. If they invest £5000, £10000 or £1000000 in your business, you will provide a return.
Ask them how much they want to make. Some great questions are-
- If we got 10 customers through the site in one year, how much would that be worth to you?
- If you spend £5000 on my copy writing skills, how much time would you expect to save?
- How much do you charge per hour? If my services provide a result in half the time you would do it, is that worth the investment?
People are protective of their funds. Usually because they’ve had a bad experience in the past. We’re all guilty of it, even me. If someone asks how much it’s going to cost, ask them what they want.
I have no idea how much a garden would cost me. If I got a landscape designer in, they couldn’t just give me a price. They’d ask what features I want, the timescale it needs, if I need support after it’s finished.
Then they can give me a price, and as long as it’ll return a value, I’ll be happy.
If the worst happens and they’re still not happy, ask again ‘what is the pound sterling budget you’re willing to invest?’ and stay silent.
4. Their budget is low, almost unreasonable.
This happens A LOT. In fact, I’ve written a whole post about a woman who expected a 1000% return on her investment.
This happens. Yes it’s disheartening, but it happens. You still have options though.
This applies to both you and them. Be honest with them and let them know that their budget and goals are unreasonable. They can either lower their goal expectations. Or they can raise their price.
DO NOT FALL for the I know someone who can do it for £XXX. Great, so do I. Personally at this point I’d pick up my stuff and leave there and then. Go ahead and pay someone peanuts, I know what you’ll get.
However some people are clueless, so they might need educating. This way they can raise the budget or lower their goals. However, do you need this kind of low paying work? Do you need this money or would you be better off searching for a higher paying customer?
Be honest with them and you, don’t work for peanuts. Don’t compete on price.
Did you even know this was an option? Sometimes people are way off the mark. You know the feeling. Something in your gut tells you these people will be penny pinchers.
Honestly, some people just don’t get the idea of an investment. They tell you that you’re ripping them off, but they’re not asking you to leave. More often than not, they’re unwilling to negotiate on price, purely because they enjoy watching others squirm.
Be tough on yourself more than anything. The budget might even be OK. You just get the feeling that the project will run on.
Often, people like this make changes halfway through. So a 20 hour project becomes a 50 hour project. Before you know it, you’re working for minimum wage.
Walk away. Find customers you want to work with.
REFER AND EDUCATE.
So your first option could just be to pass the work on. We all know someone who wants the low value stuff, let them have it. Problem solved.
On the other hand, educate. Demonstrate your value and prove that you’re not a cost, you’re an investment. If they give you £X you will return them £X+Y. Return on investment is the name of the game.
If I could guarantee (hypothetically, you knew it would happen) that if you gave me £500 000 I could double it in 6 months. I bet you could find that money.
Dig a little deeper and ask the right questions. People do have the money, they just would rather spend it on other stuff.
Here’s the crazy part-
“People will rather WASTE money on something they can PREDICT the outcome of, rather than risk spending new money that MIGHT loose or win.“
People much smarter than me will be able to tell you why. The principle is that change is scary to people. I know guys who have spent THOUSANDS on PPC and advertising. Only to break even or even LOSE money on it. They keep doing it though because they KNOW the outcome. In a bizarre sense, it gives them comfort. They can control that they lose money.
However, here’s you, telling them they can get a return. IF they do something different! Madness. It might take a bit of education and talking to help them understand.
But know this, some people can’t be persuaded. It happens. Move on.
5. They give a decent budget.
TA DA! It can happen. It really can. This answer is always good. But still needs to be handled properly.
Don’t leap on the table and shake hands. You hear these kinds of numbers and deals all the time. You’re an in demand specialist.
Agree that their budget sounds like something you can work with. But keep probing.
I even know of guys who will stay silent AFTER hearing a budget. Just to see what happens.
But we’re not like that here. We want to help folks.
So, they give a half decent number. Then what? Well, ask them what they expect to get from that.
Hardly ever do people say a specific return. I’ve never heard “for our £10 000 website investment, we expect 1 new customer a month at £2000 each”
It’s always, “well we want a website and some e-commerce”. Ask a question that other designers just aren’t asking. Ask them “what kind of pound sterling return is your investment going to get?”
This will force them to think in terms you can understand. Because now we need to work out if their goals are realistic. Keep asking what else and why? Why do you expect that return? OK then, what else?
Get a list of priorities from them. Understand what they expect when they start to work with you.
So to wrap it up, ask the lead what their budget is. Practice on a mate. Practice in the mirror. Make the question sound as natural as your own name.
I really mean that too. Practice. Ask people in conversation what their budget is. ‘We’re going on holiday to Jamaica this year’.
Cool, what’s your budget? Make it confident and make it natural. I guarantee that you’ll start seeing the benefit quickly.
So now you know how I made £3500 from asking one question. You also know how you can do it. You’re on my blog and you can accelerate your results if you download our free marketing plan. It’s just below you.
Start getting the leads you deserve and finding customers that value you. It all begins with this specific digital creative marketing plan. No hype, no buzzwords, just a template and format to help you sell your service.