Why clients should reveal their budgets

It seems to be the perennial question for clients: should I reveal my budget?

My answer is a most definite YES, and here’s why.

The problem of not revealing your budget

Before I explain why I think this makes complete sense, let me just address an understandable concern. The primary reason I hear for not specifying a budget is that some clients think it will encourage suppliers to just quote that figure. Surprise, surprise, that’s exactly what happens. But that’s a good thing; because by not specifying the budget, you’ll receive widely varying proposals and you’ll be comparing apples with pears.

If you’re buying, let’s say, 50 desks and chairs for your office of a specific make and model, then you can be pretty sure supplier proposals will be directly comparable. So you can buy based on price. Simple.

But if you have 5 proposals for a complex, creative website project ranging from £30,000 to £100,000 – all proposing slightly different services, software and technologies – how can you be sure you’re really getting the best possible value? Quite frankly, you can’t.

Don’t risk eliminating the best suppliers

Let’s extend the above example a little bit further to illustrate the point. Having assessed the five proposals you’ve received, let’s say you decide that you should probably look at the proposals around £100,000 and below. This eliminates two higher-priced suppliers, and leaves you with a shortlist of three.

Let’s deal with the suppliers you’ve eliminated first. Believe it or not, this could be your loss (as well as theirs, obviously). Fine, you can’t afford anything above £100,000 but, had that supplier known your budget,  they could have potentially delivered the best  £50,000 website, so half the price. By not being clear on budget, you could just have eliminated the supplier who would have delivered the highest ROI. Would you rather spend £25,000 and get an ROI of 200% or spend £50,000 and get an ROI of 500%? I know what I’d prefer.

Adjusting the project approach to fit your budget

“How could a supplier halve their costs from £100,000 to £50,000 and still do the project justice?”, you justifiably ask. Primarily, by reducing the amount of time involved (though they might also discount for you) but without compromising quality. This might, for example,  involve setting parameters such as:

• Less design time, but more focussed
• Rather than multiple rounds of prototyping  and usability testing, they could offer one round of guerrilla usability testing, which still makes a big difference.
• Delivering technical requirements more simply or using ready components

This doesn’t mean they are offering a less effective proposal than other suppliers, it just means they are offering an alternative approach to the one they proposed when they didn’t know the budget.

Most importantly though, it means their offering can now be compared to other £50,000 proposals.

Getting a feel for the right budget

If you’re going to set a budget then, naturally, you want to make sure it’s realistic. If you’ve run web projects before then you’ll probably have a fair idea; but if you are new to this game or the project is much bigger than any you’ve run before, just pick up the phone and call a few agencies. They will be able to give you a ball park figure to work with and if you like the sound of them, add them to your shortlist at the same time.

My advice

So, to get the best use of your budget, my advice is:

1)      Speak to a few comparable suppliers to establish a ball park budget

2)      Specify a budget range in your brief or tender document

Have you produced briefs and ITTs? Do you agree with this approach? I’d love to hear your comments.

Image credit: HowardLake on Flickr