I have been in the marketing industry for over 8+ years and worked with hundreds of clients online and offline. Throughout those long years, the best lesson I have learned as a seller and marketer is to stop asking the question of: “What’s your budget?”.
If you are an online or offline seller and still asking your clients about their budget before working, then what you are about to read next will definitely shock you.
As implied by the title, asking this question is considered one of the fastest ways to kill your lead instantly and lose your potential client possibly forever. The reasons are as follows:
1. Lack of knowledge:
Asking about the budget means to the client that you don’t know what your rates are. How can a client hire you if you still don’t know how much your services are worth?
2. Signal of Deception:
If you put yourself in the client’s shoes, you might also read this question as: “I am going to charge you as much as possible” or “How much can I possibly charge you before you run?”. When you ask about the assigned budget, you are simply indicating that you might charge your client as much as he/she says. That, in turn, would mean that your service quality varies with the budget of the client. How can your client ensure the quality of your services if the cost of those services is determined based on his estimated budget? In other words, it is a clear sign of deception and lack of professionalism.
3. No Value:
It focuses the prospect’s attention on what he has to spend, rather than what he’s going to get. The subject of cost must be addressed and agreed upon beforehand, but never outside of the context of the prospect’s overall objectives, the value of the project, and his potential return on investment. If you discuss price and budget first—and your price is “too high”—you’ll be forced to talk about value to justify your price. That almost never works.
4. No Due Diligence:
Even if the other person has a figure in mind, it’s rarely based on any due diligence on their part. It is known that most prospects are embarrassed to even say what they’re thinking, because they know they’re just pulling a number out of a hat, rather than one based on reality or thoughtful business analysis.
Keep in mind that “budget” is always relative to value. Prospects with a budget of just a few hundred dollars can end up spending four times that amount if they saw the value in your solution. Money is like time—we spend it on what we value most. If your solution’s value exceeds its cost, your prospect will find the money. So don’t lock yourself into a set price by asking for the budget.
Important Tips To Consider:
- Stop using: “What’s your budget?” In addition to all the reasons that I have mentioned above, keep in mind that there’s no statement on earth that more clearly screams, “Bargain with me because I’m new at this and don’t know what my rates are”. As a result, your client will end up deciding the rates or even worse, you might lose him/her altogether. A fun fact: When that client goes on to refer you to someone else, you will be stuck honoring that same low rate.
- Sound like a sweet old lady, asking her grandson for a cup of lemonade. Stop saying things like, “How would you feel about $500?” or “How does $500 sound?”. You don’t even sound like a sweet old lady but more like someone who has no idea what they really charge, and you’re looking for the client to validate you. You’re also signaling that you feel your own price is too high.
- Putting fluffy adjectives in front of the price. No more, “My standard fee is” or “My usual fee is” or “My base fee is”. Those adjectives come out of your mouth to soften the blow. But what you might be subconsciously doing is trying to put the ball back in the prospect’s court, hoping the prospect will realize there’s room to negotiate.
- Putting nouns in front of the price. Do not say, “My fee is” or “Our fee is”. You’re implying that others might charge less of a fee. You will be basically inviting your customer to check other sellers around for a better price.
What should you say then? well, simply repeat after me: “The total cost is $_”.