How to discuss price with clients without asking ‘what’s your budget?’
How do you price yourself when you have no idea about a prospective client’s budget?
There’s often a bit of a dance that goes on between a seller and buyer. The ‘what’s your budget?’ dance. Typically, it involves a buyer — your customer — asking questions about your products or services but being reticent to indicate what they are planning to spend. So, how do you price yourself when you have no idea about what their spending appetite may be?
The budget dance
I experience the ‘what’s your budget’ dance quite often. People ask about some training, for example, but when I ask to clarify their budget, they say they don’t have one. And that’s fair enough. I’ve worked in businesses where we didn’t know what we needed to spend until we talked with potential suppliers.
While they might not have a set amount in mind, your customer will typically have a ballpark tolerance level. This is what you can say to get them to reveal it, adjusting the numbers to your industry and business, of course.
‘From what you’ve shared with me so far, there are a number of ways we could go. For example, to give you a ballpark idea, for some clients, their training program is around $80,000. For others, it’s around the $10k mark.
Where do you see yourself sitting? Are you closer to $80k or $10k, do you think?’
By going first like this, and putting some numbers on the table, it’s then up to them to contribute to the conversation.
Not only does setting this ballpark help your customer, but it also avoids you from seeming evasive — which is a risk if you were instead to say ‘I’d need to know more about what you need before I can tell you how much’.
The other thing we’re doing here is anchoring them. We want to share the upper range (in this case $80,000) first. That means anything you pitch below that will feel like a great deal, and anything above it will be a tolerable stretch.
Check out the related article on ‘The Goldilocks effect’ for specifics on this.
If they reply to your ballpark budget range by saying they sit closer to $80k, then that’s where you start. If it’s $10k, then set that as your minimum. If $10k (or your lowest number) is a stretch, follow up by asking what a reasonable number might be, and go from there.
Send me a quote
Most people will ask for you to send your quote in writing. If it’s a relatively small value transaction, you may decide that’s fine to do. But if it requires you to draft a tailored proposal or it’s important you get the work, don’t revert to email.
Email means you lose control of the conversation and they can easily ghost you. Instead, when they ask you to send the quote, first reiterate the ballpark figure you’ve discussed and then book in a formal meeting to share your proposal with them.
Remember, say it, don’t send it. Here’s how that may sound:
‘From today’s conversation let’s work on the basis of it being around $50k. The next stage is for me to pull together some options to share with you, say the same time next week?’
If they balk at meeting with you, that’s a signal to you that it may not be worth your time to create a proposal.
If they insist, tell them it’s important to meet so their questions are answered there and then, and to make sure they get exactly what they need.
Be careful to phrase this as a win for them, not you (my ‘Get before Give’ rule), highlighting the value to them of having this meeting rather than just saying it’s part of your process.
As is always the case when it comes to pricing, as soon as a number is mentioned, it becomes a tangible expression of your work. As much as your customer might say they don’t have any expectations, the fact is they will. That means it’s your role to contextualise your price so your customer believes working with you is the best use of their money.
