Many service providers agonize over how to price their services. If the number is too high, it might scare away potential clients; if it’s too low, you’re providing your services on the cheap. What’s the solution? Ask about the budget before discussing the price.
Start the conversation by discussing the client’s specific needs, and scope out, in general terms, the results that both of you expect from the service you’ll be providing. At that point, ask, “What kind of budget did you have in mind?” You’ll get one of three possible answers:
1. “We don’t have a budget yet.”
2. “About how much will this cost?”
3. “The budget is around $xxxx.”
Answer No. 1: “We don’t have a budget yet.” – The potential client is not ready to buy, so it’s pointless to talk about price. Instead, turn the conversation to the budgeting process. Find out how budget decisions are made, how (and what) his company has paid for similar services in the past, and what you need to provide to help the client secure a budget, who the decision makers are, etc. Work through the budget process until the client comes up with a number, then move directly to Answer No. 3.
Answer No. 2: “About how much will this cost?” – In this case, the potential client already has a budget in mind and wants to know if you’re in the ballpark of what he’s thinking. If you hear this answer, do not stonewall in the hopes of getting a budget number. You’ll only irritate the client. Instead, quote a range of prices, with the final price dependent upon the exact amount of work involved.
Answer No. 3: “The budget is around $xxxx.”- Answer No. 3 means money in the bank. The number given reflects the value the client puts on the service you provide. That’s a really good thing to know, because if you know your service is top quality, you deserve top dollar, and top dollar is defined as the highest amount somebody is willing to pay for something. If the number is absurdly low, explain that your service is not in his company’s price range and suggest an alternative. If the number is anywhere within reason, confirm that you can work within that budget.