How to Talk Money & Gauge a Prospects Budget
Lesson twenty six here we are how to talk money, engage a prospects budget so as I said before, it is absolutely your responsibility to bring it up and you can have a process for doing this. You can have actual language for how you do this, you can be spontaneous and do it differently depending on the conversation. Whatever is most comfortable to you, but it is your responsibility don't wait for the other person to bring it up. It definitely gives you the upper hand if you bring it up. So what's the language, how do you bring it up? One suggestion is to just be matter of fact, and what you can say is we've talked about everything else. Now let's, talk about the money simple let's talk about money, all right, simple thing to say, you might be surprised, but your clients and prospects usually don't like to talk about money either. Some of them have as many hang ups about it as you might, so just keeping that in mind assume all right, now we've talked about everything else let's get to th...
e money, you can use humor, you can say here's everyone's, favorite part of the conversation money, right? And then a little chuckle, and then you get to it, and as I said before, talking money is not about quoting prices. Right, the difference is that you are just trying to get the lay of the land, and you're especially trying to figure out what they can afford, not necessarily what you're going to charge based on what they can afford. You're going to come up with some pricing, so you have to be really clear as you're trying to gauge the budget that you're not quoting prices. All right, so here are some ways to do that. Number one you're always going to ask for their budget very simple, but something most people who know they should be doing it somehow immediately forget to dio oh, I forgot to ask for the budget, and then I'm talking about some client conversations here. They're telling me a story, okay, here's, the situation here's, what I have to do, I don't know what the prices did you ask for the budget? No as if then also it's too late, you can go back and ask for the budget. Even if you didn't the first time around, you could go back and you can kind of bury it in a few other questions that you want to ask follow up questions I meant to ask you this, I've done a little research, I also want to find out this and, oh, by the way, what's your budget. All right, they may say we don't have a budget, they may tell you what their budget is, they may say we don't know, but you definitely have to ask they're a couple different ways you can ask you, khun say very matter of fact, lee what's your budget for this project, they just might tell you if they don't push back all right, here's, another situation where you really do have to push back, especially if you think this is a good prospect for you, especially if you think this is a client. I want a project I want to work on, but we need to get some money talk on the table. I would not leave an initial or this second conversation, especially without finding out really what ballpark were in when it comes to money. So if they say we've talked a little bit about this, we don't have a budget, it could mean the sky's the limit it could mean we have no idea what this should cost, and that means we need help with this or you're going to help them. It also could mean we have no budget for this, so you keep pushing and here's some ways to push you can get some context you khun say, what have you spent on this in the past? If this is a project that they've done before then that's a perfectly valid question and they may actually have the answer to that and they won't feel like you're asking them something as part of this negotiation game you're just asking for a fact what did you spend on this before? The best strategy is to float some numbers right again this is not you quoting prices you're going to float some very wide ranges and you're going to say are we talking five hundred dollars or five thousand dollars? What ball park are you in if they're talking five hundred and you're thinking five thousand you should end the conversation right there or explain why five hundred is not going to get them much of value or of quality right? But you need to know and the amazing thing is that when you put some members on the table miraculously they know their budget right? So that's why I say pushed back when people say they don't know their budget because it may not be true and it's not like they're lying they just don't know that they know another strategy for uh finding out their budget for pushing a little bit is you could say this sounds like it's in the two thousand five hundred dollar range this sounds like it's in the twenty five thousand dollars range is that in your budget so again you're putting a number on the table and you're saying does this seem possible for you and as I said, miraculously, they do suddenly know their budget. I had an example of this happened last week, I was approached by a fundraising consultant who knows that I know a lot of designers who specialize in nonprofits, and he said to me, do you know a designer who does nonprofit events? And I said yes, and I said, what's the budget because I don't want to send him to someone he's not going to be able to afford and vice versa. And he said to me, I don't know, so I went back with is it five thousand ten thousand or twenty five thousand? And he said, literally that's a fantastic question way actually haven't determined the budget yet. I believe it will be approximately five thousand once we finalize the budget, I will communicate where we land, if otherwise right? So he didn't know it's, not like he was keeping it from me. He really wasn't sure, and he said that's a fantastic question, as if he hadn't thought about it, which maybe he hasn't right don't assume that they are thinking that way, either. They're focused on what they need, but my point is that you must leave this conversation with a number, all right, so we are going to go to the exercise for this lesson but I really do want to hear from the people in the chat room and from the people in the room about this idea of floating numbers and asking for the budget tell us stories of situations you've been in where you did try or you didn't try or you should have tried how does this all fit into your life? Justin um I think I've learned to just keep it light hearted like people bring a lot of anxiety to the money conversation and when you just kind of keep it light and know that like if the numbers I guess I've experienced the one thing is when people wanna range what's your range and they're like fast talking they're from broadcast company or something and they're like how much is you know and any ther arrange out there and may never hit back in them but I actually have some thoughts about it number one you should not be pressured to give an answer if you don't know enough information number one now sometimes people ask in an email for arrange or a number and to me that is the perfect moment to pick up the phone or say we have to chat first I would highly recommend that you never give a number a price in an email message if you haven't had a real time conversation with someone unless you don't want the project because essentially putting a number in an email and sending it off is almost the exact same thing as saying, I'm not interested. You may not notice it, but you may never hear from them again because you didn't. You miss the opportunity for a dialogue, right? So if someone says, can you give me some pricing, you say you just you can't just pick up the phone and call them if they if you have their phone number or im sorry, but I need a little bit more information, so I'd love to chat with you here some possible times don't ever quote prices in email just off the bat like that? Two strangers? What about, you know, talking money? Yeah, I usually try to ask the budget question. A lot of my clients are like a small entrepreneurs, they don't have a budget, they often have no idea what things cost, um and asked me, and I do try to steer away from that question or from answering that question right away and just find out more about what they need and explain that when they I feel like maybe I'm evading the question, I consent that and I and I say that I just need more information too. Eventually provide them with an estimate that it's catered toe what they can afford so that exactly best baby basically give them the best use of their money yes so you could say something like in order to provide an accurate estimate I need this information it's not for me I'm not trying to trick you this is for me to do the best job I can for you excellent jae ko what's happening in the chat room with this well it seems to be a mix of people some say they it's very easy for me on don't have a problem with you have to ask but most I think they're saying it's hard laurie milat saying it's super hard from me kathleen though says talking about money is actually easier than you realize it's just something that people you know need to try use yevgenia says I love the floating numbers idea so she's going to try that as well but most people are echoing that it's very, very hard to get people to commit to a budget they can ask directly people say we don't know what our budget is, but as soon as you throw out a number they'll say oh no that's not within our budget exactly so this is a tricky one so you do have to push and this is the part where I think it's the most difficult because if you want the project you're afraid that if you push too hard, they're going to vanish or go away or disappear. And the reality is that if you push hard, you're actually going to get something back and really it's best to do this in real time, if possible, so that you actually make a connection with people. Zane, you wanna add anything here? Sure, yeah, my process has always been a prospect. Contacts mean, regarding a project, I'd send them a worksheet that where she has a serious questions about the project as well as a question about the budget, um, that gives them some time to think about what they want to dedicate to the project, and they send it back to me. I look at the work sheet and if it's kind of within the budget, uh, or it's kind of reasonable, I'll get him on the phone and talk more about the project itself and from there, send him a proposal if it's if it's something that would work out and we're actually going to be talking about whether or not to do proposals in this very next lesson. But I love that idea of you essentially have a process that put people through and asking for the budget and getting the budget from them is just one element of that process I think one of the problems is people make such a big deal over what the budget is or whether there's enough budget that everything else is overshadowed and one technique that a lot of my clients are using is on your website on your contact paid you can have a form that people fill out there and you can ask a question about their budget if they have a project in mind and you can even give options so very subtly imply what your minimum is because you need to have a minimum by saying is your budget, you know, five hundred dollars and up five thousand dollars and up twenty five thousand dollars and up and that way, even if they don't know they are almost forced to choose something to kind of put themselves in the place. J k o, what are they saying? Well, something's saying they're working on proposes right now, so they know they're going to have to really step up for this. Andi think about how they're going to ask for the money. I think this is really inspiring people because it is the thing that seems to be frightening people very much so, yeah, we've got to get over that, yeah, all right, so the exercise with this lesson is kind of what would you do if situation because in the workbook, we do have these simple scripts that I outlined about how to ask for money what the language actually should be. But the question is, what if you try as hard as you can and you still can't get a number out of them? What do you do? You pushed, you've done everything I told you to dio, and they still won't give you a number. What would you do, justin? Um, I mean, I guess creative proposal, like since in through, based on in from the information you have on the project, what it's going to cost and go high and and then, like you said, you get teo like if if that's the way out of their budget, then you can reassess, like, what the project actually looks like. So that's one option definitely to say okay, even if you're not giving me the information, I want this project, so I'm going to do the work and put the effort into creating a proposal and come up with my best number and see if it's the right number or if it's in the right area. So again, that's. If you want the project right, you have to decide whether or not it's worth that time at that moment, depending on what you have on your plate. What about you right now? That's exactly what I was thinking, teo so if it is that kind of product that I really want, I think I would give them option's there sort of like packages, I guess, but I often have sort of the this the basic, the standard and the deluxe version of whatever it is they're asking for, and I write in the proposal what that includes and what it doesn't include. So it's really clear what the difference is, and sometimes if they haven't understood it before, that really drives home like, oh that's, why that's more expensive because you get more for it. Exactly. So you are actually foreshadowing one of the lessons from session three, which is all about different pricing strategies, including the one that you're talking about his three tiered pricing, which is similar to packages, and by the way, in the package pricing bundle, I have examples of three tiered pricing and exactly how to do it. So thank you, that's great, and we will revisit that again in session three. Zane yeah, I do something similar as well. I use a tool called, quote, ruler and within that I have, like a base price for a certain project task, and then I have these optional categories that they can actually check park and re calculates the proposal price before them. So I do that as well. That's a great tool. Also I know about that one quote roller dot com that's worth looking into its very good that's. That's actually won me a lot of proposals and there's another one that I know have called newsy and u s I dot com another proposal, uh, type of software and us I dot com. I know it's a little weird, it's not from this country and you as ii dot com. What are people saying in the tack room? Well, doll in ct is saying I provide two to three different pricing options scenarios to choose from, and then I see what happens. Top tomato. Is she saying that this educates them on the process? If you give them options to consider, if they really don't know the pricing, it helps them look good when they're making that their decision. But I saw interesting one from kathleen, she says, if they are resistant to committing to a budget, suggest that they may not be ready to invest in themselves at this point, especially if that's an individual who is supposed to a corporation right? Good.