"What is your budget?" Have you ever asked that question? Actually, the more important matter is: Have you ever been asked this question? How has it made you feel?
I usually become friends with most of my clients. Often after a photoshoot or filming we end up discussing anything from business to cooking. I've had the golden opportunity to hear stories of my clients working (or meeting) with other artists. This is the time when I just listen without commenting. These are precious moments where you can be taught how not to do business. I've heard those stories where artists have asked them "What is your budget?" If you've never been on the other side of the quote, this can be interesting to you.
Why Many Artists First Ask for Client's Budget?
It's important to note that I'm talking about a situation when that's one of the first questions asked. There are cases when you ask for the budget after you've given a quote. At that stage of negotiations the client knows your value and you think of reasonable ways to cut corners depending on client's financial limits.
The usual situation I am talking about is when the client describes their project and asks for a price. To that the artist replies with a question: "What is your budget?" Why such a question? Well, there are three reasons I can think of for such a questionable response:
- Many ask it, because they are taught this the way business is conducted in the art world. Yes, I have asked that question too, because I wanted to try that method out.
- The artist is concerned about the reaction of the client if the price is too high. Rarely there's a concern for a too low price. What do I call that? I call it fear and lack of confidence.
- The artist thinks they can earn much more if the client tells a number first, especially if that number is higher than their price in mind. It's that sort of thing: "What if I asked them for 1,000 but they would gladly pay 10,000?" What do I call that? Ripping off a wealthy client because you can, not because you're worth that much.
I remember walking at a local flower market and stopped by a seller asking for the price of a certain bouquet. He told me a number. I decided to go around and look at other bouquets too. As I was passing by the same seller I overheard a quote that was given to a sharp-dressed gentleman who asked for that same bouquet. The price was much higher than I was told. What do you think? Sudden inflation? Did I buy a bouquet from that store?
Some clients of mine say that they felt they were being tricked when were required to say a number first. It is like telling the artist how much a client thinks they are worth. What if that number is too low? Wouldn't that be accepted as an insult or the client would become the next funny meme and a hot topic for conversations for the next month?
What Do Clients Expect?
Clients want you to ask them more questions regarding their project until you give them a number with confidence. It's better to have a firm opinion about your pricing and lose a client than to be shady (yep, that's in clients' terms).
There's a tricky situation if a friend of the client refers them to an artist they worked with before. Imagine the client asks for a price for a similar project as of their friend's. If the price is several times lower and that friend of theirs finds about that, wouldn't the latter feel ripped off? Would they refer others to that artist again?
In my opinion and in the opinion of clients I've spoken to, you better stick to your guns and be true to what your value is. If needed, defend your price.
It's Not Always About Budget
There are situations when I enter a store and the salesman or the consultant asks me what my budget is to give me the "right product." Sometimes It's not about budget. It's my willingness to pay for something. A product may be cheap, but I just don't like the manufacturer or the way the salesman have talked to me. I won't buy it. Other times the price may is high, but I gladly pay for it, because I like how the product has been presented and advertised.
What If Your Fears Become a Reality?
What if you quoted a client for 1,000 while they would wholeheartedly pay 10,000? You have to do that project with contentment and adjust your price for similar projects in the future. It's normal to raise your prices with time. What if a client is turned down by your price? Does that mean you have a problem in your calculations? The answer may be "yes," depending on your experience on the market. It's better to start with an average price and raise it with the rise of your experience. When it's you who sets the price, even if it was too low, you won't have any bitterness against a client who pays you the negotiated amount. This will teach you humbleness, responsibility, and confidence. In the art world pricing varies and is totally subjective from artist to artist. In your small business world your quote needs to be well-grounded and backed-up with a solid portfolio.
Do I Tell You to Have a Fixed Price List?
Of course not, but if two projects are similar (including the type of client, licensing, and type of work to be done) they have to be priced in a similar range. Otherwise, in business terms, it means that you don't know how much you are worth.
When I'm meeting with a potential client I ask questions about the scope of their project. After that I am able I give a price range or an exact quote. If the price is too high for them, I try to negotiate a lower number by cutting features from their project or give them other options as workarounds showing the pros and cons of the approach (for example, they want to shoot at an extremely expensive location while I give them an option to film everything on a green screen). When you know how much you are worth you won't fall below a certain minimum. This is important, because you should not lower your price below that level, because you are a business person after all. In business people work for profit. Of course, there are exceptions where you can even do something for free or without any gain, but in general, if you want to be sustainable, you need to be profitable.
Asking for client's budget to some may sound like "how much money do you have in your wallet?", while others, like agencies, may find it a perfectly appropriate question. There will be clients that will walk away because of your prices, even if you are cheap. If you are sure your price is reasonable and rational, this means they are not your clients. In order to get confident at your quotes start with an average price and adjust it from there after you gain more experience. Pretending to be confident is not what you want. Start humble, build a portfolio, set your value, and defend it with skills.