Marcus on budgets

Paul Boag

A week or so later, the client calls to say that our proposal was probably the best of the lot but, in the end, we lost out on price..

So here’s the situation: I receive an invitation to tender in my inbox from a potentially good client. The brief is well written and, for the most part, the requirements are clear. The first thing I do is check the timescales, second is to see what the budget is.

This is a guess, but I would say that 7 out of 10 ITTs do not include any budgetary guidance. So, I phone up to discuss budget. The private sector is either amused or affronted that I am asking and I am basically told ‘you tell me’. The public sector simply states that it is not allowed to tell me.

I then spend a day or two of my time preparing our proposal. This is often followed by us being shortlisted, so I drag Paul out of deepest Dorset and we both travel to present our pitch. A week or so later, the client calls to say that our proposal was probably the best of the lot but, in the end, we lost out on price.

Anyone who ever got involved in a pitch will now be nodding their heads.

I don’t want to get too cynical here so, I should say that this scenario happens less often these days. This is firstly because I make a positive effort to combat it – that I am going to share with you – and secondly, clients understand the difficulty it can cause so are less likely to keep their budget under wraps.

So why do we need to know

The first reason, and most honest reason, is that we don’t want to do a lot of unpaid pitch work when there is no chance that our price will be accepted. Who would? It’s like having 10k to spend on a car then going and asking to test drive an Aston Martin. You are completely wasting the Aston dealer’s time. (I’m not suggesting a correlation between Aston Martin and Headscape by the way!)…

But this goes both ways – the client’s time is also being wasted. Ok, so it may only be the time to read the proposal and reject it, but what if all the bids are too expensive? Then the client needs to go through the whole process again.

The second reason why we need to know budgets relates to what we would like to include in a proposal over what we need to include.

For example, take usability testing. We always highly recommend that a client pays for at least one round of usability testing because it will definitely improve their new site – no question. But, not doing it doesn’t mean they’ll end up with an unusable turkey. It’s just more likely that any usability issues will crop up after launch.

So, do I include usability testing or not? Another good example of this is additional design concepts. Some clients love the idea of being presented with multiple design concepts, but I am less likely to include them in a proposal where I don’t know the budget.

How to find out

I have found that the best way to discover a budget is to simply provide a ballpark total, usually accompanied by a list of ‘likely tasks for this type of project’, in an initial email or telephone response. This usually gets the discussion going, even with those public sector people who ‘cannot’ discuss it.

Expect a lot of people to dismiss you out of hand. This is good. Don’t be tempted to ‘just go for it’ anyway because you like the client or work is short – you will regret it.

Others will say that the ballpark is ok. This is not as good as getting into a proper discussion about what priorities they might have but it does mean that you are not wasting your time and you do have a chance of winning the work.

The only real risk with this approach is that you misinterpret the requirements and produce an inaccurate ballpark.

Another way

Finally, there is a less confrontational approach that I sometimes use that involves modular pricing. We break down our pricing into quite detailed tasks for all proposals but when I really do not have a clue about a client’s budget, I will often separate pricing into ‘core’ items and ‘optional’ items. This has proved to be a very effective method of presenting price.

I tend to go down this road with prospective clients who have had personal recommendations about Headscape. It is likely that price has already been discussed so the prospect already knows what our rates are.