The Unnerving Necessity of Frank Budget Conversations
As a consumer, you’re familiar with the standard shopping experience. You see something you like, check your finances to decide if you can afford it, then either make the purchase or walk away wishing you could. The same approach applies whether you’re considering a tomato or a Tesla. The calculus is seductive in its simplicity.
When the “item” being considered is a service instead, the evaluation process becomes significantly more complicated. Not only is it harder to place a value on something intangible like expertise, it’s also more difficult to estimate the positive impact that expertise will have on your very specific situation.
What’s it cost? That depends on “it.”
As a leading luxury marketing agency, we are approached by businesses of all shapes, sizes, and types seeking everything from brand strategy to campaign formulation to website development. Some potential clients have a reasonably good idea of what they are looking for in engaging us, and others really want us to help them discover what it is they need. In most cases, one of the first questions they ask is, “How much do your services cost?”
As buyers of various services ourselves, we can certainly appreciate the approach of using cost as a litmus test to see if we are a good fit for them. Unfortunately, there is no concise answer to that question. And while it may feel like we’re being less than transparent when we explain why that’s the case, to simply blurt out a number would do a disservice to both the potential client and to us.
The truth is, all of our engagements are custom-crafted to meet the client’s needs. Of course there are certain commonalities among projects, and some process-driven services have a tighter boundary around pricing. But a unique marketing strategy and the skilled execution of it are not items you can select from a menu the way you would a chicken sandwich and a side. The process is much more dynamic than that.
Imagine that Acme Inc. is interested in engaging us to help reshape their brand, their strategy, and their marketing communication touchpoints. But only Acme knows exactly what they’re looking for initially. They start the conversation by throwing out a few key objectives, then quickly follow up with, “How much does it cost?” We explain that our services are not subject to “menu” pricing due to the organic nature of an effective engagement. Then we raise a few eyebrows as we go on to share that our goal is to achieve the maximum benefit possible with the budget allocated by the client.
And the truth is, even if we attempted to assign a price to an engagement at this very early stage, it would be a shot in the dark at best given the large volume of unknowns. Not only is Acme’s full vision for the project unknown to us, in many cases it’s still unknown to many of Acme’s own stakeholders. It’s virtually impossible to chart a path to success and assign a cost to that approach when the definition of success hasn’t been fully exposed or explored. And ideas that “felt” good when Acme discussed them internally have to be vetted and reviewed in the context of a cohesive strategy before they can be deemed worthy of pursuing.
When this is explained to them, Acme begins to understand that in asking them for their budget, we aren’t looking to craft a strategy that greedily uses up every last penny — we’re looking to use each penny that they are comfortable using (and not one more) as effectively as possible.
If, for example, Acme shares that they have $100,000 allocated, but could extend to $125,000 if necessary, we don’t see this as a $125K budget. Instead, we see this as a challenge to develop and execute the most potent $100K strategy possible — one that delivers such impressive results that Acme can’t wait to pump the remaining $25K into it in order to reap the additional rewards.
Once a budget is defined, it allows for a conversation based around how to make the best use of it. Effective campaigns can be crafted for $30K or $130K or $530K — the difference in results is one of degree… more, faster, broader. How much does it cost? Clearly the right answer is really more questions.
Widget Inc. and the Premature Prescription
Let’s assume that Widget Inc. is looking for a comprehensive engagement to revitalize their marketing. If we were to deliver a proposal with a defined scope prior to engaging with them, it would be like having a doctor prescribe a very targeted medication without asking basic questions about your symptom let alone performing a cursory physical evaluation. This would be considered reckless at best and ought to result in the doctor losing her license. Unfortunately, this kind of behavior is rampant with marketing agencies.
In our decades of experience, we’ve learned that a few high-level conversations do not provide enough information to establish realistic project pricing. Instead, we begin by framing the engagement with what appears to be a “reasonable” scope while making it very clear that further exploration and discovery will be needed to reach more concrete numbers.
For example, let’s say a client wants to build a yellow widget with two buttons because that’s what seems to make sense. However, once engaged with an agency, the company discovers that it will be better served with a blue widget with one button. An “organic” engagement allows client and agency to change course and create something more effective that was not conceptualized until an additional dose of expertise was brought into the mix. Had the yellow widget been the stated goal in a proposal drafted after initial discussions, there would be no room for exploring opportunities that could serve the client’s needs in a more effective and possibly more cost-effective way.
It Starts with Trust
We understand that discussing your budget feels like tipping your hand. It’s nerve racking — no question. Nobody wants to be taken advantage of or to pay more than they should. The key is to use your initial conversations with an agency not so much to determine if they are a financial fit, but rather whether 1) they have the skills you need, and 2) they are people you can trust.
The first is fairly easy to ascertain by reviewing a portfolio of the agency’s work. The second, however, is more challenging. You can certainly talk to the firm’s current clients, and that can help address your concerns. But in the end, you will have to trust your gut. And an agency that’s confident enough in its work and the value it delivers to say they need to immerse themselves in the project before providing a quote should make you feel very comfortable.
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