Tips For Negotiating Budgets

Tips For Negotiating Budgets

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Liaising with potential clients is an art, especially when it comes to money. It takes a lot of practice to be able to gauge your client’s needs & budget (or lack of) and negotiate an outcome that both the client and yourself are satisfied with. Here are two tips that I’ve found extremely useful when negotiating pricing, allowing the best outcome for both parties.

How can you find out a potential client’s budget?

The best way to find out a potential client’s budget is to ask. Although you can ask “What is your budget?“,  I’ve personally found that mentioning the ‘budget’ word can get a bit sticky & things can get a bit vague when negotiating prices so I’ve found asking How much do you plan to dedicate to this project? a better approach.

It avoids the ‘budget’ word and allows the customer to think about how much they want to spend on their project. It also allows you to get a better idea of what they are willing to spend, versus your own set prices, putting you in a better position to negotiate. Of course not all clients know how much things cost or why, but it’s your role as a designer to educate the client on these matters as well.

When asked to lower your prices

Ok, so now you know your client’s ‘budget’, but their budget is (*surprise*) way below your fees. My advice here, is to stick to your guns and not reduce your price(s). Instead, sell the value of your work, explain what they will receive and why these are your prices.

A handy phrase that I use when asked to lower the price is “As I can not lower the quality of my work, unfortunately I can not lower the prices.” Using this phrase shows that you are proud of the work you produce and want to produce the best quality of work possible. NB: See the Fast, Good, Cheap Pricing Method.

I guarantee to you, that in the long run, sticking to your guns is going to be more beneficial to you, your career and most importantly, your health as you will ultimately be working less, yet charging more.

For further tips on liaising with clients I recommend Jeremy Tuber’s book ‘Verbal Kung Fu‘ that I have previously reviewed on this blog.

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Have you got any further tips for negotiating budgets?

Photo: Shutterstock

26 thoughts on “Tips For Negotiating Budgets”

  1. Thanks for this post. I like the way you used the approach “How much do you plan to dedicate to this project?”. You’re right, clients don’t like the word “budget”. Sometimes if my client doesn’t have enough for the a particular project, instead of offering 3 design options, then I lower it to 2 design options. Also, I set a limit at the amount of times they can come back for revisions, like 3 times. It forces them to make smart decisions, remain focused on the project, and eliminates a lot of “dilly-dallying” on their part. If they go over the 3 rounds of revisions, my contract states that I will bill “x” per hour over and above those revisions.

    • There are some truly great ideas here for determining the project scope and initial budget! I really like your idea, Joce. I may end up doing something along those lines. I have had a few clients that cheated me, but half of it was my fault. I learned that being clear about the deliverables, project scope, expectations, and budget beforehand is essential to make a project worthwhile.

  2. I think you offer some great advice here Jacob. The only thing I would add is to make sure you ask about budget asap. The last thing you want to do is waste your time and money thinking about a project that ends up not being worth it financially.

  3. Great stuff Jacob. On your advice, I am going to introduce a little verbal kung-fu into my brief and completely remove any mention the “B” word. Will let you know how it goes.

    Sticking to your guns with regards to pricing is some of the best advice out there for budding designers. Set your price and sell the quality of your work. In my experience the clients who continually insist on haggling the price down are the exact ones you want to avoid.

  4. Hey Jacob,

    Thanks very much for this piece of information, i will definitely use it the next time i have to work for someone.

    “As I can not lower the quality of my work, unfortunately I can not lower the prices.”

    Just awesome statement. Thanks

  5. Good post Jacob. I recently took the leap and decided to go on my own. I found myself in the sticky situation of: “Please can you reduce your cost…” with my very first job. I decided to stick to my guns and ultimately lost the job.

    However, I feel strongly that if the client is not willing to pay you what you feel is a fair price for your work, then the relationship with the client will always be strained. It is better to work with clients who value the work you do than the other way around.

    All the best with your job in NYC.

  6. Thanks for this post! I just received a potential client like this a few days ago. I haven’t replied to his email yet, but he says he wants a logo, website, and branding for a video game to cost around $20. I don’t think I even need to say what my response will be…

  7. Good food for thought. I especially like the line “I can not lower the quality of my work.” It helps to bolster your confidence in negotiating pricing if you are busy. There’s definitely some second-guessing that goes on if you get worried about a slowdown in work. But sticking to your guns, in terms of pricing for what you think it’s worth, pays off in the long run, definitely.

  8. Some helpful tips: thank you.

    A supporting approach that recently worked for me: when the potential client reviewed my price guide and explanations (don’t ever give out the list without being there in person to present/clarify/explain), he pointed out that he couldn’t afford them. I asked what he wanted to achieve and we designed a solution that not only met his needs, but also allowed me to maintain my pricing standards. The added advantage is that you also have the opportunity to help the client realize their end goals, expectations and plans from potentially nebulous wants/needs.

  9. Joce,
    Thanks for your insights Joce, hope the phrase comes in handy for you. Let me know how it goes!

    Another solid piece of advice, but sometimes education has to come first. I think there is a balance of finding out what they need / want versus what you should produce and for how much.

    Will be interested to hear how it goes, do comment back on here when you can! I would also agree about the haggling, mainly for smaller projects.

    You’re welcome, hope it works out.

    Congrats on the leap and don’t get your head down re the lost client, there are many more to come especially when you have the skills to back it up. Thanks for your words too!

    They’re best avoided as Duane as pointed out too.

    I know what you mean re second guessing however in the long run it will pay off.

    Great story Hagen, thanks for sharing. Very true.

  10. Good post Jacab. Actally, i’m grahpic designer form HK,here a commercialize city, it’s hard to achieve that . Most client email us and request the qoute, but no one success.

    It’s because most of design angecy, logo+namecard HKD400, printshop HKD 150 for logo.

    Now, i creating my blog(pofoilo),what’s your suggestion?

  11. Great post Jacob – definitely something to remember when talking to clients in future. It’s so true that some people just don’t understand exactly what goes into a project, especially logo design where there can be a number of ideas before the ones which they are presented with. I tend to explain to new clients how I work and what I do to give them a clear idea of what to expect.

  12. Thanks for the post. I really wish I would’ve found this sooner. I recently had this problem, and spent 5 days e-mail consulting a client on almost every aspect of their web presence. The client never mentioned a number much less a budget (oops b-word,) and I got the sneaking suspicion they didn’t believe a word I was telling them despite the over 3k in free consulting I had given. Ultimately, I lost the client, but lucky me I get to help provide a very unique and expensive Facebook button on their website. Which I don’t want to do, even overcharging. As for Scott’s comment, and your response: I’ll have to agree with Scott 100% on this one, UNLESS you know your client is computer literate, the education could potentially never stop. I love your handy phrase, and will definitely put it to good use.

  13. Once my client reverted back saying that my price was way too over priced and that I should re negotiate. I replied with a slightly lower quote (adding it was only because he requested me to do so). I also politely let him know that I am an enthusiastic and sincere person who puts in a lot of passion in my projects Hence all the negotiating and putting a value on an intangible service like intellectual input, can break the enthusiasm of working with passion on a project. I didn’t ultimately get the project but I was happier not under selling myself, coz had I bent to my client’s rates I wud have been cribbing throughout the entire project!!

  14. As always, great advice Jacob! I’d have to agree with Duane, the low-balling clients are always the worst ones you only end up resenting in the end. I always try to take the Educating my Clients path: explain to them in detail with enthusiasm what a professionally designed x will do for them. Before long they’re on board with me, and probably think I should be charging them more for what they’re getting!

    I really think as designers we need to focus on educating our clients; most don’t know the level of work that goes into any design. You almost can’t blame them for expecting cheap work, most of them just don’t know any better, until you tell them.

  15. It’s an interesting article Jacob . I have found recently that its difficult to even get to a point of negotiation. I name a figure, try to give a quick outline as to why the price is more than they expected and then……. nothing. I never hear back and any follow up email I send gets ignored Nice!). I imagine that they have gone with the Designer who was quick to accept their $100 price for 3 weeks work.

  16. When a client asks me “is that price negotiable?”, I respond “Of course! What part of the project would you like to eliminate in order to reduce the price?” That makes my point that reducing the price is only possible if the services are also reduced.

  17. Barbra @ Write A Bio that’s an excellent response. I often do that too; I’ll say then we can reduce the number of options (like 1 instead of 3) and almost always put a cap on the amount of revisions the client can come back to me with (like one time). I recently gave a client a deal on an identity & it was a reminder that I shouldn’t; it seems as though the ones who do get a deal do not appreciate the value that you put into the work and are actually more demanding. I don’t get upset if I didn’t get a job over price, because I know I’ll get an approval on price by another client soon enough.

  18. I will appreciate if you continue this in future. Numerous people will be benefited from your writing.

  19. Great topic to write about this is one of the trickiest situations you’ll run into as a freelance designer. Being able to negotiate proper budgets is actually one of the major steps you must master if you want to run a successful business on your own. One thing that has always worked for me is giving clients options or a very short proposal covering what low end and high end costs would be. This is your chance to pitch (under the radar) why going with some of the higher price packages would be in their best interests without trying to sell directly. Very seldom do my clients pick the cheapest option because they care about their business and understand it’s about long term results. For the price you want to get put that in the middle of your proposed pricing options and watch how often it works. It should be stated though you need to give clients a “valid” reason to why investing more money will pay off. If you do they are reasonable people like anyone else who will listen if the deal makes sense.

  20. Great post. I have found that asking for a budget is the wrong thing to do. Giving price options based on project scope is the best option. I also have a budget area on my questionnaires which is optional.

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