In this blog post, I want to talk about how to ask what the budget is that your customer has without sounding greedy.
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 my God, we don’t have that much. We were thinking like $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 realize that it would cost that much.
I’ve asked around and that’s easily 10 times what they charge, it can’t cost that much. We only have a thousand. Our last website only cost us $1,000. $1,000. $1,000.
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.
Are you being greedy?
One of the most common reasons I hear funnel builders are not asking for the budget is because they think that their customers will think that they’re greedy.
The fear goes that if you ask someone for the budget, it’ll appear, like you’re only interested in the money.
Look, 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’re going to help them.
The fear that they’ll think you’re greedy if you ask their budget is no more true than you thinking that they are selfish for wanting to improve their business.
When the customer says “I wasn’t expecting that price!”
How many of us have presented a proposal only for the customers today. 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 that I ask, even if it’s a brand new customer with who I’ve never interacted.
I’ll just ask, and what type of budget have you allocated for this project?
If you ever feel funny about asking for the customer’s budget or if you’re super confident about it?
I still get an enormous amount of tire-kickers and time-wasters and people shopping around for a price. The reason I’m able to command high prices for my services is that I don’t entertain the idea of lower-priced funnels.
If I have a brief discussion with them about starting a marketing campaign, improving some of their activities, or any 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 a thousand dollars probably isn’t someone that I can help.
Start asking more questions
The more you understand about the project through qualification, the better you are to ask the budget question.
It also gives you a clear indication of what their expectations are compared to what they’re 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, but there’s an enormous difference between $500 and $25,000.
But Mike, what if they don’t know their budget? Again, this is probably an indicator that they’re new or an inexperienced business.
Every other purchase on the planet from houses to cars, to groceries, has an inherent budget allocation.
In our minds, we’re clear on what we’re looking for to spend on everyday services that we consume.
If I go into a restaurant and it’s clear that breakfast is going to cost me 25 pounds, I’m either going to instinctively believe it’s worth it or it’s not.
For the record, the rusty pig in arteries and Mary and Devin is absolutely worth paying 25 pounds for breakfast.
For someone to not know what their budget is to try and solve a problem that they have is an indication that they’re either inexperienced or in the early stages of the project.
It also means they probably haven’t really thought about what they want from the project.
They’re probably conscious of the fact that they want a new landing page and an email sales campaign, but a business that understands they want to generate $500,000 in revenue will tell you that they’re willing to spend $150,000 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 are a few key questions and tips in order to get the answer out of them.
What questions to ask for the budget?
Many times, they’ll tell you, they don’t really know because they really don’t want to tell you. They’ll say, “We can’t tell you that, or we’re not comfortable, or I’m not quite sure. I was hoping that you could tell me.”
Anyone who tells me that they can’t tell me the budget for a variety of reasons is instantly a red flag to 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, 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 them.
Anyone who refuses to tell you their budget walks away, or sometimes I’ll say, “Okay, you don’t know what your budget is. $250,000. And they’ll go, ” Whoa!” Whoa!” Whoa!” All of a sudden they’ll know really clearly what their budget is.
Make it clear that you only work with professionals and professionals know their budgets.
Another reason that people are sometimes hesitant to give you a clear budget is because they feel that you’ll max out the proposal. I’ve got no idea why customers feel this, or why funnel builders think that their customers are worried about this?
If you tell me your budget is $25,000. Yes. I’m going to attempt to give you $25,000 worth of value, or would you rather have $23,000 worth of value in $2,000 change?
Budget is designed as the resources that you are willing to invest in your own business. If the 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 it is just part of that larger spend.
Customers who have put everything on the line to work with. You are usually much 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 that you’ll just max out the price and the proposal, explain to them that it’s 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 you’re going to max out their budget and you will do a great job because of it.
However, as mentioned, this thinking is usually an indicator that they don’t really have any more resources to spend.
In my opinion, I’d walk away from this because they’re likely to be a difficult customer to work with.
So here’s my favorite tip about asking for the budget, whichever of the questions that you use below.
I’ve given you some, ask the budget questions in a minute, make sure that after you ask the question, you stay totally quiet.
The only words that you want to hear out of your customer’s mouth after you ask what their budget is a number and a currency.
What you’re looking to hear is we have a budget of $25,000, or we’re 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 we’re 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’re 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.
Now is this awkward? Yes, it is. Is it going to make your skin crawl? Yes. That’s kind of the point.
The point is that you have to make it clear by staying silent, that they haven’t given you the right answer. By this point, there’ll be desperate for your acceptance. They want to say something in the period of silence to break the tension.
In reality, it’ll only be like three or four seconds, but it will feel like an eternity. 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 silent as well.
Another example is to run through some maths with the customer. If you’re running a qualification call, you want to ask about their goals and what kind of revenue they’re hoping to generate.
If they give you a goal that they want to generate, like a hundred thousand dollars, you can do some very basic maths to work out a budget for them.
I believe that a one to four ratio is a perfectly acceptable ROI investment. That means I believe that for a hundred thousand dollar goal, a budget of $25,000 is perfectly acceptable.
In fact, depending on this customer, their situation and their resources, we might even increase that to 50% of their goal.
Why so high we’ll, first of all, I need the resources to be able to generate a return. A two-to-one return on investment is pretty good. Doubling someone’s money is better odds than you could get at any casino or any bloody bank for that matter.
Also, if it’s structured correctly, my marketing funnel should continue to generate revenue for them long after I’ve completed the build.
To invest a hundred thousand dollars and get a hundred thousand dollars back, including a hundred customers who have spent a thousand dollars, you’re essentially giving them a hundred qualified to pay customers for free.
That sounds like a pretty good deal to me.
If the customer genuinely doesn’t know their numbers, run through the maths with them in real-time, ask them if it sounds like a reasonable investment to put in $25,000 to get a hundred thousand dollars return.
If they argue with you and say no, then walk away or you can have a little bit of fun with them and ask them which bank or investment fund they know of that gives a four to one ratio on your investment and go work for them instead.
So I really want to quickly cover off 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 for you.
The reason I like these questions is that it positions the customer as a serious business and you as a serious business owner.
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?
The first one is 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’ve asked the question, remember to stay quiet.
When you’re on the call or in a meeting with the customer, and it’s clear what their goals are asking, what their budget. You might already know their timescale, their previous supplies, their needs and the other decision-makers. We now just need to ask what their budget is.
For 95% of serious businesses and serious customers. They’ll be able to give you an answer straight away. No need to complicate it.
What are you willing to pay for these results?
Another way of asking this question is 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, what the 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, building muscle and getting 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 plus a year.
But if someone was to reply while I have a budget of 25 bucks a month, we know that the gym that they’re going to attend, isn’t going to be as effective or as one-on-one as a more expensive five figure gyms and they do exist, they are out there.
We have to understand what they’re willing to invest in their own business and that is the budget.
What would achieving these goals mean for your business?
Question number three, what would achieving these goals mean for your business?
If I’m really struggling to get a budget out 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 gathered from the customer and their goals, it might look something like the below.
If we run through the results that we’ve gathered from the customer and their goals, it might look something like a hundred thousand dollars in revenue, a hundred customers at a thousand dollars per sale, and a thousand new email leads.
After it’s clear what the measurable results are, I’ll ask a bit of an open-ended question. Okay. 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 would give us an entirely new pool of customers to sell our services to. I know that the future benefit they’re looking for is a pool of fresh new customers to upsell their high ticket items to.
By asking what would be 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 earlier, I know that they’ve got a decent budget and I want to find out.
What do you think is a reasonable price to pay for that future?
Question number four, what do you think is a reasonable price to pay for that future? Similar to the question above we’re reframing the budget question as a question of investment.
Businesses that aren’t serious, or haven’t thought seriously about this will 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 favorite part of this entire process is staying quiet. In fact, I use this technique in a lot of different questions and situations. If someone gives me an answer, which I don’t find satisfactory, I’ll stay quiet.
Eventually, their awkwardness will override and they want to get the truth out or get closer to the truth.
I understand that some of this might be difficult and a bit 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, tire-kickers, and price comparisons, get used to asking the budget question. Once you start doing it, you’ll never go back.
Are you going to start asking your customers what their budget is now?
What about the stay quiet technique, which was taught to me by Troy Dean from WP Elevation. I absolutely love it. Do you think it’s brilliant or a bit cringe-worthy?