Wednesday, April 28, 2010

Discussing budgets with your prospective clients.

For the short time I have been in Advertising and PR, one question continues to perplex me and that is how do I approach the topic of budget with prospective clients? When to ask, how to ask, and how not to sound greedy while asking?

Many colleagues have told me that you should never approach budget within the first few meetings. Asking too early about an assigned budget is almost guaranteed to make you look money hungry and only interested in your bottom line. But, as someone who is trying to start off small, I don’t have a lot of man hours to put into researching and developing a proposal for a business that has not allocated sufficient monies towards their marketing campaign.

According to Lilian Nganda an Account Director at Silver Bullet PR, Proper understanding of your scope of work will give you an edge to justify the costs confidently to client. One must also be flexible to reduce costs during cost justification meetings especially if client is ready to close a deal instantly.

Some say that we need to educate our prospective clients on what they “should” be spending on their marketing campaign. While I am all for education, this way of doing things seems a bit backwards to me. I mean would you ever call a lawyer and ask them how much you should be paying them to get you out of your legal debacle?

“It’s really hard to quantify a service like PR and what most companies evaluate is the time the task will take to be realized. The most important thing when putting together costs is to understand the scope of work involved to achieve the deliverables. One also needs to consider the team involved and resources like transport, communication”. Supposed Miss Nganda.

Once the potential client becomes an actual client, the issues with budgets do not always go away. Recently I was nearly reprimanded for having the audacity to ask the client if they had decided on a budget for the second phase of a huge community relations campaign they hired us to execute.

While many of us love what we do, the reality is that we walk a fine line between being deemed greedy and maintaining a profitable business.

Our services and the various elements of our proposed strategies cost money. As the saying goes, “it takes money to make money!” As marketers (yes am a marketer I market stories to the media), we know this to be true. But the age old question remains… how do we get potential clients to understand that having a discussion about budget early on is less about being greedy and more about being smart?


Mike said...

as an an entrepreneur you should hint the budget discussion during the first meeting with the client.It may look greedy but at the end of the day it saves one the man hours of doing a brilliant proposal only to be told that the client doesn't have a budget

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