How to Understand Your Client's Budget?

Money is perhaps one of the biggest taboo topics in the world, especially in our small country. People immediately take a defensive stance as soon as someone asks them about their budget, even when they're dealing with a matter where this is an essential step.

When there's such resistance to a topic, how do you break through the wall?

A few tricks and tips to make the conversation about your clients' budget more comfortable

Your potential client's budget is the foundation on which your entire solution can be built, as it determines whether the project will be able to generate profit. If you discuss this early on with the client, you'll save both of you from the headaches of unnecessary meetings and easily earn their trust.

Of course, it can easily happen that some will hesitate to share the numbers with you. You can calmly explain to them how knowing the planned budget helps both of you. Bring an example for easier understanding: suppose someone is planning to buy a car, and price will most likely be the most important factor in their choice. If they explain their budget to the salesperson, they'll find the right car faster than if they showed every single one from a 2001 Volvo to a 2021 BMW.

But how exactly do you ask about the client's budget?

It's very important how you ask the question so you don't appear money-hungry, timid, or insensitive. Don't attack them immediately, especially not by asking directly: "How much do you earn? / What's your exact income?"
If you do this, you can guarantee you'll be saying goodbye to them.

To start the conversation, instead ask sales-oriented questions to your potential client: what they think about the project, what their pain points are, and ask about any additional information that could help customize the proposal. Then explain why you need to know their budget:

"What project budget should we work with? Knowing this will give us a better picture of what we can do to meet your needs, and it also helps determine the timeline in which we can deliver the project."

Ask about previous project costs, this way you can get an approximate picture of the expected budget:

"What budget did you allocate for similar previous projects?"

Ask about the goals, this way you can gain insight into expectations and introduce the conversation about pricing:

"What is the goal or result you want to achieve with the completion of this project?"

Besides the above questions, it can also be a good tactic to use analogies for the client: you can build a sailboat or even an ocean liner – the client can sail with either, but the budget determines which solution you provide for them.

But what if the client has no idea what budget to work with?

This might be the first project of this kind for the client, so they don't know what initial budget they need. It may also happen that they want to rely on your estimate and determine their budget based on that.

Take advantage of the opportunity to help your prospective client! Show them your similar, already completed projects and how you priced these. This way they can gain insight into what kind of work you do and decide whether your services and prices are suitable for them, while you can assess based on their reactions whether you'll be able to work together and move on to the proposal stage.

Instead of focusing on how much the client should spend, shift the dialogue's focus to what results the project can bring them. So if you explain that, for example, implementing a certain feature will cost 100,000 forints, but it can bring 150,000 forints in revenue, then the client will also focus more on the return rather than the investment.

Don't be afraid to move on if the client doesn't want to share their budget with you

If you don't get a clear answer about the budget after several attempts, move on, and turn your time to clients who can appreciate the importance of the budget conversation.

It will be a scary step when you do this for the first time, but this is a sign that you're increasingly beginning to understand who your ideal customer is. You can't waste your time on those who don't understand what you provide and how much they need to set aside for your product or service.

Leave them to your competitors, let them deal with them! 🙂