Charging Clients

[greash]

When someone inquires about your services to build their website, how do you go about giving them a price or quote?

Is it wrong to ask them what their budget is for the project, or should I have some type of general flat fee?

Once I asked someone what their budget was, and they replied with "that's a loaded question"..

Just curious about your process for the initial contact..

Thanks.

[JohnKelly]

If you offer custom-built sites (and not template brochure type sites), then knowing the client's budget is essential.

After getting some basic information on what they need, I *always* ask the client what their budget and timeframe are.

If the clients doesn't supply the information, then I know they're simply window shopping.

For example, two different clients are asking for an ecommerce web site. One client has a budget of $5000, the other a budget of $50,000. Both can get a site, however the one with the larger budget will get a much larger site with more features.

If a client with a larger budget tries to get a site on the cheap buy not stating the actual budget, they will be disappointed with what they received. If their competitors spent more on their sites, the low-balling client could find themselves out of business.

<added>
If you were hiring a contractor for a custom home to be built, at some point during the interview process the contractor will ask about the prospective homeowner's budget. No sense attempting champagne designs with a grape juice budget!
</added>

[greash]

Thanks for the reply. Thats exactly what I needed to know!

Cheers.

[johntabita]

IMO, asking for the budget is the wrong approach for a couple of reasons:

1. To give an realistic answer, the prospect must have done some homework; otherwise, any answer he gives is usually a number he's pulled out of a hat -- something he hopes or expects to spend, not something based on reality or thoughtful business analysis.

2. It forces the prospect to look at 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 what return on his investment he'd like. If you talk price/budget first, and your price is "too high" then you'll be forced to talk about value to justify your price, and that almost never works.

When you ask for the budget, what you're trying to do is reconcile what it costs to do the job with what the client is prepared to pay. That always puts you and the prospect in an adversarial relationship. But when you discuss objectives, value and ROI, you've now become the prospect's collaborator, helping him reconcile his vision of what he wants to achieve with what he can actually afford.

Keep in mind that "budget" is always relative to value. I've had two occasions where someone with a "budget" of just a few hundred dollars ended up spending 4 times that amount, because they saw the value in my solution. I heard time-management expert recently say that we find time for what we value most. The same is true with prospects and their "budget." If it's valuable enough, they'll find the money, so don't get locked into a set price by asking for the budget.

Hope that helps.

[greash]

That's good information as well. I don't want to lose a sale because I quote too high of a price, yet I don't want to accept less than what someone is willing to pay. I guess I just need to come up with a number I'm comfortable doing the work for based on what the customer is asking for.

[johntabita]

The only number you really need to come up with is a bare minimum price for what you'd consider an average-sized site, based on the type of work you typically do. This is a good way to weed out the tire-kicker whose first question right off the bat is, "How much?" If you get the deer-in-the-headlights sort of look, you'll know not to bother spending too much time pursing that one. I find that the ones that begin a conversation with why they want a site or what problem they think a website could solve usually wind up becoming clients, because they're shopping for value. I've yet to land anyone who wanted to know the price right away.

[JAB Creations]

In a sense you have to put butter on the bread before you toast it. Make your salepoints first and then give a general range of your pricing.

If I come up to you and say give me 5 bucks then your reaction is + or -?

If I come up to you and say I can do what you need, you'll wonder if I can do what you want...and THEN if I can how much will it cost?

[vincevincevince]

A way to avoid this question is to get a measure of the actual quality the client is looking for. If you provide them examples of a $5,0000, $500, and $50 site (for example), and use examples to get some idea of the standards and finish they want. If they can see a cheap $50 site and say that's the kind of thing I'm looking for, then you will know to quote within the kind of range. But if they only like the $5,000 site, you've just avoided quoting them a $50 or $500 site which may end up involving as much work as a $5,000 site.

[johntabita]

That approach isn't any more effective, because most people have no clue what web development costs. Someone could look at the top-of the-line site and say, "That's what I want," and still only have $50 to spend.

I spoke to someone just yesterday who had "budgeted" $500 to spend on her site, thinking that was a lot. If I'd taken her to a $5,000 site and heard, "That's what I want," should I assume that she has that to spend?

[vincevincevince]

If I'd taken her to a $5,000 site and heard, "That's what I want," should I assume that she has that to spend?

If she only has $500 and wants a $5000 site, then you will be best not working with her, sorry. Unless you are very clear when you explain what she's not getting at $500, then she will never be happy, will constantly want changes, until you've given her that $5000 site. Unless of course you bill by the hour, in which case it would be fine to work for her at $500 worth of hours, and then it would be down to her how much tweaking she wants.

[johntabita]

You misunderstand. It's not that she wants a $5,000 site. It's just that she's completely unaware that you've shown her a $5,000 site. When she sees it, of course she's going to want it...

Imagine someone crawled out from under a rock where they've been hiding for the last 150 years and discover this "new" invention called an automobile. If they showed this person a Hyundai and a BMW, which do you suppose they're more likely to "want."

Of course you don't want to work with someone who expects a $5,000 site for $500, but we're talking about the sales cycle here, not the fulfillment cycle. It's during the buying process that you need to ascertain the prospect's expectations of what they're going to pay and what they're going to get. Showing them sites that they have no idea what they cost as a means to determine their budget is a poor sales practice, IMO.

[Animated]

i think maybe the best idea is to hear the client out, and see what they want then give them a price according to the work you need do on that site, and if they think they expected less you just explain to them about all the features you are giving them for the websites because of your price.

[gpilling]

You could use the Godaddy tactic - really cheap home page, and then every feature costs a lot. 'Oh, you wanted an email address set up for your domain? That will be another $50'. There are a hundred ways to set up the deal. I would spend a lot of time talking to the customer and learning about them abd what they want. In my sales carreer, I never found the client that had an open checkbook for their first deal with me. Maybe their third or fourth, but never the first.

Anyone can put up a webpage, or use a template site. What are you offering your client that really suits them? Learn as much as you can, and then the selling process and pricing becomes much easier. Dont forget that they are learning about you too at the same time, and they are (hopefully) learning from you what a website can be - and the price tags associated with these possibilities.