Dear vendors: Never ask about a prospect’s budget

It seems like every time I talk with a service provider, at some point of the initial conversation they ask “whats your budget?”

Whenever I hear this I think “does it matter”?

My budget (all budgets) is really whatever amount that needs to get paid for the project to be successful. This is because successful projects usually have no issue getting the funding they need. Asking me what my budget is signals to me that you don’t know what needs to be done to make my project successful.

And thats a big issue.

Budgets arent always bad. They are great for things like kitchen remodels or Christmas shopping where the buyer has earmarked some money to spend.

But in business money isn’t spent. Money is invested. And investments must have a return.

I’ll outline a basic example.

If your marketing campaign costs $20,000 and it generates 10,000 customers who are paying me $10 each, then I’ll make $100,000 from the campaign. When I come back for a 2nd campaign, you probably wont be getting $20k, you will be getting much more and you will continue to get more until your service stops working.

That’s because there is a return. I spend $20k to make $100k.

So who cares what my budget is?

My budget is always too small.

The other major issue with the “show me your budget” convo is that no matter what number I give you, it will be too small.

If I go on to Fiverr right now I can find someone who can design a logo for $20. Or I can go to Chiat Day and they will charge me $200k.

Whats the difference between the two?

The process is the difference.

I may get good work from Fiverr, but I’m far more likely to get good work out of Chiat. This is because with Chiat it will go through multiple revisions, focus groups, interviews with my team, etc.

Hell at Chiat there probably would be a dozen or so people working directly or indirectly on the logo.

The thing to remember is that in professional services there is always more stuff to do. There are more marketing channels to try, more design revisions to go through, more time spent on specification/scope, etc. These things are the process required to do great work and also these things are sadly the first things to go when budgets get scaled back.

At completion of the project, if it’s not successful, vendors always cry about how it would heave worked better with more budget. This is usually the truth because the process was scaled back and as a result the work suffered. Which means I don’t get a successful project like I wanted, and you get an angry client.

So let’s not talk about my budget.

Anyone can do better with more budget. Why hire you if you need it?

The last reason that asking for my budget is ridiculous is because any mediocre end result produced by anyone can be improved with more budget. But that’s not what I’m hiring you for.

I’m hiring you to add value.

If hire you to build an application, and you build an app and leave, I don’t really get any benefit outside of the work its self. Any of your competitors can do this so why hire you?

Adding value would be helping to make sure I’m building the right app, or guiding me through a process that will reduce tech debt, etc. Adding value means that 2 + 2 doesn’t equal 4. It equals 6.

This is also known as synergy. This is the edge that I need over the competition to be successful.

You want me to be successful right? Then working with you should produce more than just the work that you are doing. I shouldn’t need “more budget” to achieve this.

Am I anti talking about how much I think something should cost? Not at all. I just think that the cost is only one part of the conversation. The real thing I’m interested in is making the project successful.

So talk to me in terms of an investment. Not spend.

Say something like “I want you to be successful and to be successful it is going to cost x. I wont work with you if you aren’t willing to pay that or we agree on a more realistic definition of success”.

All of the best vendors have this conversation because they know they can deliver results.

If you can’t have this conversations, take a look in the mirror and ask yourself if you really are creating value.

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