Have you ever sat down with a customer and presented the proposal to them, only for them to look at the price and say “oh we don’t have that much. We were thinking $500 for the whole thing”?
It used to happen to me a LOT. It’s really disheartening to hear from someone that you’re too expensive, or they didn’t realise it would cost that much.
“I’ve asked around and that’s easily over 10x what they charge”
“It can’t cost that much! We only have $1000!”
“Our last website only cost us $1000!”
If you want to stop having these conversations, then you need to understand the customer’s budget. However this can be a thorny subject for some people.
Asking for the budget seems like a faux pas to many business.
They’ll think I’m greedy
One of the most common reasons I hear funnel builders not asking for the budget, is because they think that their customers will think they’re greedy.
The fear goes that if you ask someone for the budget, it’ll appear like you are only interested in the money. I can understand that you need to make it clear that you’re willing to help. You need to do everything you can, to assure the customer, that you’ve got their best interests at heart.
However this also should have come earlier in the process. If you’re talking to a new customer, why are they talking to you? Surely there must be an element where they already trust you, or believe that you are going to help them?
The fear that they’ll think you’re greedy if you ask in the budget, is no more true than you thinking their selfish for wanting to improve their business.
The reality is that unless you know the customer’s budget, you can’t truly qualify them. How many of us have ever presented a proposal, only for the customer to say “I wasn’t expecting it to be that much!”
Admittedly asking for the budget immediately, might not be the best course of action. It is in fact one of the first questions I ask, even if it’s a brand-new customer who I’ve never interacted with.
“And what type of budget have you allocated for this project?”
I still get an enormous amount of tyre kickers, time wasters and people shopping around for a price. The reason I am able to command higher prices for my services, is because I don’t entertain the idea of lower-priced finals.
If I have a brief discussion with them about starting a marketing campaign, improving some of their activities, or any other kind of work engagement. I want to know how serious they are. A business that quotes $25,000, is potentially someone I can work with. A business that quotes $1000 probably isn’t someone I can help.
The more you understand about the project, through qualification causing discussions, the better equipped you are to ask the budget question.
It also give you a clear indication of what their expectations are compared to what they are willing to spend.
Asking the customer about their budget, shows that you’re serious about your business. There’s not a huge difference between $10,000 and $12,000. There is an enormous difference between $500 and $25000.
They don’t know
But what if they don’t know their budget?
Again this is probably an indicator that they are a new or inexperienced business.
Every other purchase on the planet, from houses to cars to groceries, has an inherent budget allocation. In our minds where clear on what we are looking to spend for the everyday services that we consume.
If I go into a restaurant and it’s clear that breakfast is gonna cost me £25, I’m either going to instinctively believe it’s worth than or it’s not.
For the record, The Rusty Pig in Ottery St Mary, Devon is absolutely worth paying £25 for breakfast.
For someone to not know what their budget is, to solve a problem they have, is an indication that they are either inexperienced or at the early stages of the project.
It also means they probably haven’t really thought about what it is they want from the project.
They probably just conscious of the fact that they want a new landing page and email sales campaign.
A business that understands they want to generate $500,000 in revenue, will tell you that they are willing to spend hundred and $50,000 to reach that number.
A business that doesn’t know what their budget is, probably doesn’t know what they would make if they were successful.
We don’t inherently exclude anyone who doesn’t know their budget. But there’s also a few key questions and tips, in order to get the answer out of them.
Many times they’ll tell you they don’t know, because they really don’t want to tell you.
“We can’t tell you”
Anyone who tells me that they can’t tell me the budget, for a variety of reasons, is instantly a red flag for me.
I’ve even walked out of meetings with potential customers, because they’ve kicked up such a fuss about telling me the budget. You’ll see just how awkward this really is (for them) when I tell you one of my budget asking secrets.
There are a few reasons that people can’t tell you the budget. Cover one of those below.
But one of the main reasons is that they don’t trust you. Ultimately, they don’t want you knowing how much they’ve got to spend.
Either because it’s an exorbitantly high number, and they don’t trust your ability. Or it’s a ludicrously low number and they don’t want to embarrass themselves.
Anyone who flat out refuses to tell you their budget, walk away. Make it clear you only work with professionals, and professionals know their budgets.
“You’ll just max out the proposal”
Another reason people are sometimes hesitant to give you a clear budget, is because they feel your max out the proposal.
I’ve got no idea why customers fear this. Or, why funnel builders think that their customers are worried about this.
If you tell me your budget is $25,000, I’m going to attempt to give you $25,000 worth of value.
Or would you rather have $23,000 worth of value, and $2000 change?
A budget is designed as the resources you are willing to invest, into YOUR OWN BUSINESS. If a customer isn’t willing to divulge the budget, what they’re really telling you is that they don’t trust that you will deliver.
Or, just as commonly, they believe that they aren’t worth the investment themselves.
I’m very hesitant to work with customers where their budget is everything they have. I’d rather work with a customer who has an allocated marketing budget, and our budget for the project, no matter how big is just a part of that larger spent.
Customers who have put everything on the line to work with you, are usually harder to work with. They’re more likely to micromanage you and be breathing down your neck for the whole project.
If a customer refuses to tell you their budget, or they think you’ll just max out the price on the proposal. Explain to them that it is your job to get the maximum level of return for the maximum level of investment. They shouldn’t be afraid to tell you their budget, because of course your max out their budget, and you will do a great job because of it.
However, as I mentioned, this thinking is usually an indicator that they don’t have any more resources to spend. In my opinion, I’d walk away from this because it’s likely they’ll be a difficult customer to work with.
Stay quiet after asking
He is my favourite tip about asking for the budget.
Whichever of the questions that you use below (I’ve given you some ask the budget question in examples below), make sure that after you ask the question, you stay totally silent.
The only words that you want to hear out of the customers mouth, after you ask what their budget is, is a number and a currency.
What you are looking to here is “we have a budget of $25,000”.
Or “we were looking to spend around $35,000”.
You are not going to accept “we were hoping you could tell us”, “we have a number in mind but were not willing to divulge it” or “I don’t know, how much do you cost?”
All of those answers are extremely weak. The problem, is as soon as they give an answer, we are often inclined to reply back. We’ll usually say something like “that’s fine” or “I’m sure we can talk about this later”.
Instead, next time, I want you to stay totally silent even after they give an answer. Unless they give you a currency and a number, that is a clear indicator of their physical budget, you do not say a word.
Is this awkward? Yes. Is it gonna make your skin crawl? Yes.
That’s the point.
The point is that you have made it clear, by staying silent, that they haven’t given you the right answer. By this point they will be desperate for your acceptance. They want to say something, in the period of silence, to break the tension.
In reality, it will only be 3 or 4 seconds. But it will feel like an hour. Stay completely silent, until they give you a dollar and number figure.
Even if they keep talking themselves through it, or even if they stay silent while thinking, you stay quiet as well. Until they give you the answer you’re looking for.
Do some maths
Another example is to run through some mass with the customer.
If you’re running a qualification call, you want to ask their goals and what kind of revenue they’re hoping to generate. If they give you a goal that they want to generate $100,000, you can do some very basic maths, to work out a budget for them.
I believe that a 1:4 ratio is perfectly acceptable as an investment, 4 of financial goal.
That means I believe for a $100,000 doll, a budget of $25,000 is perfectly acceptable.
In fact, depending on the customer, their situation and their resources, we might even increase that to 50% of their goal.
Why so high? Well first of all I need the resources to be able to generate them a return. A 2:1 return on investment is pretty good. Doubling someone’s money is better odds than you’ll get at any casino.
Also, if it structured correctly, my marketing funnel should continue to generate them revenue long after I’ve completed the build. To invest $100,000 and to get $100,000 back including hundred customers who have spent $1000, you’re essentially giving them hundred qualified, paying customers for free.
Sounds pretty good deal to me.
If the customer genuinely doesn’t seem to know their budget. Run through this maths in real time with them. Ask them if it sounds reasonable to invest $25,000 to get a $100,000 return.
If they argue with you and say no. Walk away. All have a bit of fun with them, and ask them which bank or investment fund they know of that will yield them a 4:1 ratio return on investment, and you’ll go work for them instead.
Asking for the budget
Below I’ve got a few examples of how you can ask the budget, without coming across as greedy, and clearly making it obvious that this is an important question to you.
The reason I like these questions, to ask the budget. It is because it positions the customer is a serious business.
A business that is unable to answer these questions clearly isn’t serious about their own business. So why would they be serious about working with you?
What budget have you allocated for this project?
Straight out the gate, the easiest way to ask about the budget, is to ask about the budget.
Don’t add any frills, don’t add anything after you asked the question (remember to stay quiet).
When you’re on the call with the customer and it’s clear what their goals are, ask them what their budget is.
You might already know their timescale, their previous suppliers, they need and to the decision-makers.
Now we just need to ask their budget.
495% of serious businesses, and serious customers, will be able to give you an answer straight away. No need to complicate it.
What are you willing to pay for these results?
If you’re willing to ask the budget question after a qualification call. For example maybe you’ve needed to understand what the results are, and their goals are. A great follow-up question, is to ask “what are you willing to pay for these results?”
What this does is position the budget question, as a question of investment. What are they willing to invest, to get the results that they seek.
Let’s take the example of being in a gym. If you want to start losing weight, build muscle and get fit. What are you willing to invest to get those results?
Depending on how strong your desire is, you might be willing to pay as high as $10,000 a year. But if someone was to reply “I have a budget of $25 a month”, we know that the gym they going to attend, isn’t going to be as effective, or support it.
We have to understand what they’re willing to invest in their own business. And this is the budget.
What would achieving these goals mean for your business?
If I’m really struggling to get a budget out of the customer, and sometimes it’s because customers are not very bright or quick. I might reframe the budget question.
If we ran through the results that we had gathered from the customer, and their goals. It might look something like the below.
- $100,000 in revenue
- 100 customers at $1000 per sale
- 1000 new email leads
after it’s clear what the measurable results are, I’ll ask a bit of an open ended question “what would achieving these goals mean for your business?”
I want them to talk about the future of their business. And what this would mean for their business and life.
If they tell me something like “this will give us an entirely new pool of customers to sell our services to. I know that the future benefit they are looking for, is a pool of new fresh customers, to upsell their high ticket items too.
By asking what would achieving this goal mean, I’m opening up the idea that in order to get this we must make some kind of investment.
If it’s very clear that the need and the want is a strong desire, a bit like our gym example above, I know that they’ve got a decent budget. And I want to find out.
I leave and occasionally ask “what do you think is reasonable to pay for that future?”
Similar to the question above, we are reframing the budget question, as a question of investment.
Businesses that aren’t serious, or haven’t thought seriously about this, will still try and talk their way around the subject.
If they’re not serious about their own business, they won’t be serious about the budget.
Ask a customer their budget
My favourite part of this entire process, is staying quiet.
In fact I use this technique in a lot of different questions. If someone has given me an answer which I don’t find satisfactory, I’ll stay quiet. Eventually their awkwardness will override and they’ll want to tell me the truth, or get closer to the truth.
I understand that some of this might be very difficult and uncomfortable, but if you’re serious about running a marketing funnel business, you must be willing to get out of your comfort zone.
If you want to stop dealing with time wasters, tyre kickers and price comparisons. Get used to asking the budget question.
Once you start doing that, you’ll never go back.
Are you going to ask your customers their budget now? Let me know in the comments below if this was useful. What about the stay quite technique do you think that’s brilliant or cringeworthy?
Let me know in the comment below, and if there’s anything else you will learn about, let me know.