Why we ask for a budget

Transcript

Hello and welcome to so what’s up? In this episode, we’re going to be talking about why we ask for your budget
we’re here with James and we’re going to be talking about one of the most dreaded things that people hate bringing up. And that is the B word for budget. Everyone cringes when we ask them what their budget is. But actually, there’s a really strong reason why we ask it.
There is a saying, and we’ve had a pound for every time people wouldn’t reveal the budget at up like 30 pounds, might be a lot. But the point is that people don’t like telling agencies their budget, because they think that the agency will just price the project to the budget. And it’s not really the case. I mean, the main reason that the agencies asked for budget is, first of all to scope that the client is in the same ballpark as what the agency is. So for example, if the agency’s typical price for web projects is 10 to 15,000 pounds, and the client have got 500 pounds in their head, it’s not a good use of time for the agency to write a whole proposal to say it’s going to cost you 15,000 pounds, and the client said, Oh, I’ve got 500 pounds, just say it up front, it just saves everybody time. But the other reason, it’s not really as much the price, the project to the budget is more to see what can be delivered for the budget. So for agencies fundamentally only sell one product. And that is time, you know, and we’re really transparent. You know, as of July 2021, we charge 100 pounds an hour for the work that we do. Now, if we look at a web project, and we say, Okay, well, we think that’s going to take 80 hours of work between design, development, testing, and so on. That will be price 1000 pounds. But if the clients got 5000 pounds, that’s not gonna work. However, the client says to us, okay, well, I’ve got 5000 pounds, we have to turn around and go, Okay, what can we do in 50 hours worth of work, it’s not a case of discounting the project to fit the budget, it seeing what we can do, in terms of our output in the total available hours that we’d have to do it. So there might be a case where we say, Okay, well, you’ve only got that, in which case, you could save some money by you doing this elements of the project for us, or you supplying X, Y, or Zed. And there’s different ways we can look at it in terms of trying to get to work to the client’s budget. Now, sometimes clients tell us a budget that’s really high, but we and we still don’t price it to their budget, we just know that they’ve got money in the job to either do a really, really nice job of something, lots of bells and whistles, or that along the line, we can save them some hassle by doing some jobs for them. So it might be populating the website, it might be handling some go live jobs that maybe their server admin company would do. There’s lots of different ways. And if they’ve got the budget to do it, they can essentially pay agents to handle everything for them. So it’s really not, it’s not a case of pricing a project to hit a budget. It’s just a case of trying to work with the client in a transparent way, so that everyone understands each other. So if we understand the client’s budget, and the client understands that, yeah, we’re either trying to save them money by getting to that budget, or we can add value, because they’ve got some budget in the pot to be able to do a really nice job. That’s kind of why we ask, we don’t ask just because we’re just trying to get as much money out of it out of them as possible. It’s really just a scoping exercise to make sure we’re in the right ballpark.
I think it’s difficult when it comes to websites. So because like, I can probably turn on TV and then within the next hour see an advert for like Wix and it’s like, get a website for under a grand.
Well, I mean, it might you can see one that says, Get a website for a pound, to be honest. But no one’s doing any work for you. Yeah, and and that’s the thing. Yeah, it’s, you’re often not comparing apples with apples with the fact that you’ve you never ever, yeah, even if you go out to three agencies, a for a particular quote, you will never get three identical proposals with three different prices, just because the offering is always always different in some way. So it’s not comparable. It’s all almost I mean, yeah, I’ve seen it before where clients have gone out to 1020 agencies and spent months and months going around the houses with quotes and then actually never committing to anything anyway. And this is just because they get trapped into this thing thinking that creative work, whether it be a website design, work brochure, work, whatever is a commodity products that can be compared.
I think this is one of the reasons why we don’t actually go away and pitch for projects and we turn them down because completed on the whole like it’s it’s big cost to us. Yeah, we
don’t Yeah, and we completely I mean, and you know, pitching an agency world is expensive. It’s going on the basis. Like I said earlier, we only sell one thing which is time and are internal time is as valuable as also sell out time. Yeah, if we even writing proposals for clients takes significant amounts of time. Yeah, we could spend a full day writing a client web proposal. So unless we’ve got a good sense of is this is the budget for this proposal worth it? And is the chance was winning that? Actually, yeah, a decent likelihood when we went right with Ozel. So So, yeah, we’re not asking budget just to be just to try and get as much out of the CLI as possible. It’s all part of scoping if the client is right for us. And if we’re right for the client, yeah, to make sure that are they transparent with that relationship? Can they you know, if they, sometimes they genuinely don’t have a budget, you know, that is a fact. And it’s a case of you need to have something on the table to go and propose a budget to a finance officer or someone like that, I would have said, That’s rare, because actually, I think even when people say that somebody somewhere in that business has got a number in their head. Yeah, comfortable spending, it might be the MD, and it might be that they’re comfortable spending 10,000 pounds, and that was it, and actually becomes a 12,000 pounds, it’s more than what they expected. And that’s often a thing. But I’d say that was probably about 20% of cases. But most of the time people have got a number in their head, or a budget written down on a piece of paper that they may as well just share with all the agencies are going to, then then the might have a chance of getting a more competitive proposal. Because those agencies will look at the same budget and go, Okay, what can we do for the budget the clients got, you know, if it’s going to be lower than what the agency standard rate is? Or what the agency would normally quote, then what’s the agency trading off in terms of getting the client to do to save the money? And that’s always, then that’s probably more where direct comparisons can be made? Yeah. Which agency can offer you more value add, there might be some variances in agency hourly rate, but fundamentally, you look at agencies, and you’ll say, Okay, so these three agencies can all do the same product, let’s say they can all output as the same work. But the law go about it differently. So who’s going to who can be the one I want to work with, that will save me the most time that’s considered the budget that I’ve got, and how and how their time fits into the available hours that I can buy from them. And then that really should be a better decision making process rather than just assuming that a web project is the same web project across our agency, which it never is,
I think, as well, one thing you need to consider is, yes, we sell time, but also in agency land, you’ve got these things like account managers, for example, how effective is your account manager? Because ultimately, like that cost is also being taken to consideration into into the into the quote that has been given to you the account management time? And is that person actually aim to get things moving for you and deliver on time and deliver on the things that they’re going to say? Is it a smooth, streamlined process? And are you kept in the loop?
That’s it. And yeah, again, that’s where you’re comparing maybe comparing large at small agency. So you know, a smaller agency might come in a bit cheaper for the budget. But that same person who’s your account manager might be doing the job might be doing the job for everyone in that business might be absolutely saturated with work, and can’t effectively come back to you and manage the project because they’re also trying to get working for the agency. Whereas your bigger agency, you might have a project manager or an ops person internally who manages the project, like we do, who essentially casetta the processes, you’ve got the team around you that are bought into the processes, timescales, milestones, and some of that’s reflected in the hourly rate. So actually, you might find that it’s the CEO, the top end your budget, or even more than a budget, but it’s delivered more efficiently. And actually, for my long experience, building web projects, every single web project is always under quoted and goes over time. It always does. So Yeah. How’s that agency going to handle that? And how’s that tiny agency that maybe came in 2000 pounds cheaper? What are they gonna do when they can’t afford to absorb the difference in costs? So there’s lots of variables in it. But it fundamentally is all about setting that expectation initially, in terms of is this agency, the right price for you rough price range for you? Or are they not? Yeah, if you’ve got 500 pounds in your head, and you want to make the next Facebook, which is a genuine inquiry I once had, when you were not the right agency for you. Likewise, I don’t think anyone has the right to do for you. But sometimes customers don’t. They just don’t have a realistic expectation of the time, you know. And I think like you said, TV adverts almost make it misleading that you can you know, build your website yourself. Enjoy. What if people want to build the websites themselves? Go onto wix.com Go into Squarespace to yourself because what you’re attending is your own time, which you will clearly then valuing how much time you spend on it. Yeah. So if you’re spent Yeah, if that web if he’s gonna take you a full week to build that website. What was your time worth? Yeah, it was it worth less than you’re paying your agency for and yeah, so you you As a business owner, you know, you’re not doing your job, you’re there messing about trying to build yourself a website. Was that time worth anything to you? Yeah. And that, and that’s the question to have, you know, only each person can identify that, you know, I try not to do things that I don’t consider worth at least a certain amount of money per hour. Because, you know, I could probably do some work and earn that. And so, you know, if it’s things like bookkeeping, or gardening, or cleaning all this all the kind of stuff people do, you know, I am happy to pay someone to do it. Likewise, a lot of agency service fall into that category. You know, if you want to spend, you know, three weeks of your life learning how to run Google ads, and then failing with it, then that’s your choice. But then that’s time that you know, you’re not accounting for, which sometimes is never accounted for when you’re thinking about budgets for websites, they just look at the number and don’t really look at the number of hours that go into that project.
Yeah, I think the worst one that we’re seeing that with regards at the moment is just the just the vast range of social media propositions that we’re getting in at the moment. And people thinking that they can get like a full on social media manager for like 150 pound a month, with like, full on campaigns across like all the platforms that they use. And it’s just not comparable. Because if you think about everything that goes into social media, you’ve got the reactive nature of it also, like the campaign planning, and the graphic creation, the copy creation, hashtag analysis and competitor analysis. And are we talking about this in a different way than your competitors, so it doesn’t leave rip them off? And then the added value pieces of like, are we going to do any long form content for them? What’s the best time to do this? Do we need to change the message slightly on you different on different platforms? So much thought and careful consideration goes into these services? And it’s difficult when you’re judged? Purely autographic? And how many likes it’s been given?
Muscle thing, isn’t it? And then this is where people need to respect creative time and knowledge. And, again, I think we certainly fit into this, I wouldn’t say that any agency is very good at communicating how much work goes into the work that they do sometimes, I think, you know, some everyone should improve on those particularly, you know, sort of showing a client that you’ve got a website, but then how many real stages? Is that going through? Yeah, what tasks is involved to build that out? And how many hours because actually, I suspect that once the hours are really added up, there’ll be an awful lot more than the budget for the client. And this is their and this is often the case. But obviously, there’s a there’s a balance between the agency trying to do things efficiently accepting the fact that there might be a bit of scope creep, or there might be some unforeseen things that take a bit longer. And then are they in a position where they can absorb that for what the client’s budget is? And I think that that’s really fundamentally what it’s all about, and that’s why we asked for the budget.
Yeah, so if you want to get in touch and tell us what your budget is for your next project, you can do so at Hello at SU marketing.com