In part one I talked about the budgeting process from the perspective of the professional providing a quote. Today I want to talk about it from the client's perspective. Engagements begin the first moment the client and the professional begin to talk about the project. By being more intentional during the earlier stages clients stand to gain a lot.
Clients who deflect questions about budget are often doing so as a negotiating tactic. There is a mistaken belief that "the first one to mention a price loses." I understand where this comes from and I've often used this tactic myself when buying cars, washing machines, lawn mowers and furniture. However, professional services are not the same as tangible goods, and one cannot use the same tactics that work so well on the used car lot.
The problem with professional services is that they have no shelf or inventory cost. Refusing to talk about budget when contracting for professional services is somewhat like asking a mechanic to build you a car from scratch without telling him how much you want to spend.
To stay with the car analogy you have three basic choices when you come in talk about a new engagement as a client:
This third option is what we are trying to avoid. The client may not know it but this approach hurts their project in several ways. First, it wastes a lot of time. Rather than focusing on exactly what you need the professional stumbles around blindly hoping to either discover the outcomes you wish to accomplish or the money you have to spend. The thing about professionals stumbling around in the dark is that they don't appear very competent. If clients are going to lose faith in their professional it's more likely to occur at this point in the process than any other. Frustration builds and relationships fall apart before they were given the opportunity to accomplish anything meaningful.
Second, the more time the professional has invested in this "stumbling" process, the less room there is for pricing flexibility. Even the most progressive firms understand that time is money when working on low value tasks. And believe me, trying to guess a client's intentions is low value. Professionals will be forced to recoup these lost hours later in the form of a higher fixed fee.
Third, focus is lost. Regardless of the client's negotiating methods there really exist one or two or three primary objectives or outcomes that need to be accomplished for the project to be successful. Stumbling around for a couple of days or even a couple of hours takes attention away from what is most important. If the professional you are dealing with is incapable of meeting your budget expectation or delivering on your non-negotiables wouldn't it be better to know that in the first fifteen minutes so that you can move on and find the right person?
The best approach is to outline the exact outcomes you need to accomplish AND to come to the table with your budget in hand. Clients suffer an interminable fear of paying too much, but what they should really be focused on is accomplishing their objectives. Too much focus on paying the lowest price results in sinking dollars into commodity projects with no enduring value. Focus on accomplishing objectives at an acceptable level of investment results in an ROI that continues to pay dividends long after the project is over.