Getting Ballpark Budget Info from Clients
Prospective customers are reluctant to tell you how much money they are willing to spend, even though that affects what quality of goods you can offer them. Here are ideas for working around their reticence. March 12, 2009
Question
I have gone out on a few estimates lately and I can't seem to get my potential client to tell me what their project budget is. I explain to them that I need an idea so that I can choose the appropriate grade of material, and still I can't coax an amount out of them. I end up getting blanket statements like "cheap" or "middle of the road." Does anyone have advice? Maybe I'm not asking the right questions.
Forum Responses
(Business and Management Forum)
From contributor R:
I think you need to decide what quality of materials you are willing to work with, then tell your client the final cost. If it is too expensive, you don't want to lose money on a job.
From the original questioner:
I have thought about that before, but I feel like that would limit the amount of bids that would be accepted. My question is how to get the client to open up about their budget. How can I make the customer feel comfortable enough to tell me how much they want to spend? I try to draw a parallel between the price of the cabinet and the price of the appliance and ask them if they are spending the money to buy new cabinets, why not buy what they really want and not just what's cheaper? This method is hit or miss and I need something that is a little more consistent.
From contributor O:
I understand why someone would not want to give you this information. They are really going to have to trust you in order to give it to you, otherwise they are afraid of getting taken to the cleaners. Because if you come in under their budget you can always raise it because you know you are under (they pay more). There are only two ways I know of overcoming this. First, you have a really good relationship with the client. I've been at this for awhile now and only have that kind of relationship with a few regular contractors. Second, if you have a set price, you can hand someone a price list of what X costs. Since they know what you charge, they now know if you are upcharging them just because you can. I often tell folks this is how much this costs, this costs, and this costs. Now you know - what's your budget? They'll show you theirs, if you show them yours...
From contributor T:
Have you never been a customer? How do you feel when a car salesman asks "how much do you want to spend on your monthly payment?" Offering any budgetary info gives you an upper hand in what should be an objective process. Chances are they haven't thought about a budget, or if they have they're probably off anyway. I've developed some linear foot ballpark quotes for the type of work I do (built-in residential cabinetry other than kitchens and bath) and refer prospects to my web site for comparison purposes. Once you've offered some pricing info, then you can ask where that falls in their budget expectations. But asking up front is kind of cheating, in my opinion, and many folks will consider it unprofessional.
I recently got the lousy end of "knowing" a budget when bidding a job for a designer, who gave me the ballpark range that she said her customer was expecting. I would normally have bid at or below the bottom of the range. But it was in an exclusive zip code, thus the higher range, so I bid closer to the higher end and didn't get the job. If I had bid objectively without that prejudicial info, I bet I would have gotten the job.
From contributor A:
Offer alternates to use less expensive or more expensive solutions. Give the customer a list to pick from something like this.
Alternates:
1) To provide all of the above unfinished, deduct ($7,874.00)
2) To use a 2 step finish process (single step stain, 2 sealer coats, and topcoat), add $3,574.00
3) To use a 3 step finish process (2 step stain, 2 sealer coats, and topcoat), add $6,434.00
4) To use rift oak in lieu of plain slice oak, add $9,870.00
5) To use plain slice Lyptus or maple in lieu of oak, add $1,842.00
6) To omit installation, deduct ($17,642.00)
From contributor J:
Selling is never objective, unless the object is to get the customer to part with their money. I ask the question "What is your budget?" Based on the response I know whether or not I need to ask any more questions.
From contributor G:
I try to pre-qualify the customer on the phone before I spend too much time and I offer a ballpark based on the size of the kitchen, then ask if this fits the budget. I have never been able to get a number from a customer by asking "what is your budget"? Most I don't think know what to budget and the rest are afraid to say a number, thinking you will price according to the answer. I think the best way to do this is to give some ballpark pricing, then ask if it fits the budget. This will get the conversation going and lets them know about where you will be.
From contributor E:
I do somewhat as contributor R. Based on measurements and listening to the client's wants and needs, I give a ballpark estimate, explaining to the customer that I try to estimate high and that if the estimate is in their budget expectation, I would be glad to do a full 3D presentation as well as doors/species samples and hardware options for a design fee that I will roll into the cost of the job. I wouldn't feel comfortable asking a customer outright what their budget was unless it was a close friend or a regular contractor. If someone did me that way I would certainly wonder if they were padding. This is also actually a benefit to you, as it makes you seem more professional and saves a lot of wasted time on jobs you're not going to get.
From contributor U:
I do the high and low as well. As we talk about the project, I get a feel for what is important and where I can cut costs. Dovetail drawers, for instance. Epoxy slides vs. undermounts. That kind of stuff. Then I work up the estimate. I've done it enough I can give them a ballpark before I leave. Then I ask them if they feel comfortable with the price. If too much, I can make changes to meet their price. When they say they thought it was going to be more, I start adding upgrades they are interested in.
From the original questioner:
So I guess the best way to go about it is to start with a basic package, and as the customer is describing some of the things they are looking for, I can then begin to incorporate those options into the base price. That sounds good to me - thanks for the advice.
From contributor A:
We can develop a design while working with you that I am sure will fit in your budget. We can offer you a variety of materials, hardware and finishes so you may feel confident in your purchase of a quality kitchen, designed to meet your expectations and budget. We do this by working through the details with you and giving you estimated costs for alternates as we move forward. We are confident that we can build a quality product within your price range and time frame.
When they ask how much, explain it's a process of working together. During these steps they will reveal how much they are willing to spend on certain items and this will constantly allow you to adjust quality and materials up or down to meet their needs.
Many people will move off their budget when they understand what they can get for a little more or you can upgrade the kitchen and downgrade other areas. It can help to try and move the customer off price until you can work out detail with them. During the process you can politely break away if their expectations are not realistic. Develop trust both directions and work with them.
From contributor L:
I sometimes compare their new cabinets to a new car. I'll ask the customer "If these cabinets were a new car, what kind of car would they be?" A Saturn - nice but not expensive, a Ford - better with a few upgrades, but mostly the same as everyone else, or a Rolls Royce - completely custom and very unique with all the bells. It doesn't give me any numbers, but a good idea of their budget style. I think it sometimes will help to say "my average kitchen job costs..."
