Talking about budget and timeline are two of the most difficult topics when working with clients in an agency setting. In my opinion, budget is generally the more difficult to address since many folks innocently have no idea the level of effort required to execute on their vision.
It’s extremely common for potential clients to share a few high-level requirements and a timeline and say “So, how much is this going to cost?” Part of me is flattered that they believe I have enough understanding of their project after 30 minutes to confidently give them a price range. Another part of me is terrified that they think I have enough to confidently give them a price range that quickly 🙂 I mean, 30 minutes parsing information that has likely taken months for them to consider is…not a long time.
So, what do you do? Bullshit a price range and pray to every god of every religion that you’re right?
Don’t bullshit a price range unless you would bet your life on it being 100% accurate.
In psychology there is an idea called “serial position effect.” In short, that means people tend to remember what you say at the beginning and end. Anecdotally, setting pricing expectations when clients ask “So, what’s it gonna cost?” suffers primarily from the “primacy effect” or the tendency for people to remember what you say first.
That means if you bullshit a price range and say “Well, it will be somewhere between $50k and $300k” (intentionally broad range for effect), clients are going to remember $50k. Period. You can never take it back as long as you live. You will have to fight that expectation for the rest of the sales cycle. And if you’re way off, it will be like wiping spaghetti off a toddler’s face: you may succeed but there will be a ton of fucking crying and flailing. (Expect it will most likely be you doing the crying and flailing.)
Ok, how do you satisfy the customer’s need for having some level of price guidance and your need to not create a ton of problems for you, the client, and your team?
There are two strategies I prefer.
Strategy one is called the “Average Project Budget.” If you have even mediocre analytics on your projects you should have a range where your average project budgets fall. So you can say something like “While it’s hard to estimate a budget without a bit more review of your requirements, I can say that our average project falls between $_ and $_.”
The only thing I don’t like about “Average Project Budget” is that it still has a high potential to suffer from the primacy issue: you’re saying a number that may scare the shit out of the client or falsely make them feel like they’re about to get the bargain of the century.
The second strategy, the one I more typically employ, I call the “Truthfully Unique Flower.” So, I might say something like “It’s hard to say on an initial pass where your budget might fall and I’d be doing us both a disservice by guessing without further review. From our perspective, each project has a unique set of requirements that necessitate a deeper dive.”
After you explain that their project is unique and you need to look at it more in-depth, you actually have to do that. Look at the requirements, take an hour or two (or more) to create as accurate an estimate as possible, without rabbit holing. Have someone review it for sanity. Review it again after 12 hours of not thinking about it (if you have that luxury).
Other things to consider:
- Stay in contact with the client and tell them when they should expect to receive the estimate.
- Unless there are a ton of unknowns you have to call out or you need to explain two ends of the range, keep the communication with the quote brief. Don’t bury it with information, it won’t help.
- If you send a pricing table, make it look nice.
Most important, be confident. Don’t tiptoe around the conclusions. There’s nothing worse than “well, uhh, it’s, ya know, a little, um, higher than, well, ya know, the other guy.” Sounding like a loser will create a self-fulfilling prophecy situation.
Happy selling 😉