Why Digital Agencies Ask the Budget Question Early - NP GROUP

Digital agencies ask you the budget question early - but why? And how should you answer?

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Why Digital Agencies Ask the Budget Question Early

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  3. BlogWhy Digital Agencies Ask the Budget Question Early2021-03-19Why Digital Agencies Ask the Budget Question EarlyFor Potential Clients
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Why Digital Agencies Ask the Budget Question Early
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I probably conduct about 7-10 introductory calls per week in our busy season. Each call is a pleasure, really, because I get to meet so many folks from many different industries and types of businesses. The variety that we deal with on these calls is one of the best parts of running this kind of business. If you are reading this, you probably had one of those calls with me, and hopefully, you can attest that the topics we discussed were wide-ranging and varied but ultimately all leading towards my goal of gathering an understanding of what it is you are looking to accomplish.

These calls often lead to two questions that I sometimes introduce as "those uncomfortable questions". First, what is your budget? And secondly, "what is your timeframe?"

Clients are sometimes off-put by the question – the reason they have a call is for me to tell them what something should cost, right? And this is where our experiences and backgrounds diverge. The reason being that completing digital projects is entirely unlike any other service you've hired for before. The range of possibilities in how a project is completed is vast, and there are literally one hundred ways we can do something. To get us from where you are today to where you want to be is a journey filled with nuance, choices, and many different technical options.

Because of this, budget becomes essential. I could show you two websites, side by side, and explain how one cost X and the other was built for X to the 3rd power. They'd both function well, send a message to users, and accomplish some kind of goal. But one is exponentially more expensive than the other. They could even have the same count of pages or templates. Sadly, it isn't like cars or houses or physical assets, except perhaps diamonds or gemstones – look closely, and you can see the value difference.

The first difference could be that one site was built for a small business, and the other was made for a multinational corporation. The two live in entirely different worlds, and as such, the cost to produce an end product is substantially different. But why?

Well, there are a few things enterprises worry about that small businesses don't. Take compliance, for instance. Many small companies may not care about compliance with pretty much anything. In fact, most standards carve out tranches for smaller companies to prevent them from having to comply. A good example is CCPA. 

But these issues can cross over, introducing pricing divergence. Take accessibility as an example. A medium-sized business may want to sell its services to, say, a government agency. And that agency may require the company to be ADA compliant. Now, we're slowly entering a new world of effort (and cost).

The same can be said for marketing technology. If you want to embrace deep levels of marketing automation, statistical gathering, ROI calculation… If you are focused on expensive lead gen campaigns or intense SEO initiatives. All of those things have technical requirements that add up to real dollars in implementation costs.

Now, you're probably thinking to yourself something along the lines of "if I'm not a large corporation, then why the divergence in cost for my project?" Enter reason number two: what technology path and methodology makes the most sense for you?

Technology alone gives us many choices in how we complete your project. Do we build or license the core components? Are they open-source or closed? Are we utilizing older, integrated development techniques or developing in a more component-based approach. The list goes on and on. And for the most part, this is why we ask the budget question. When an enterprise client comes to us, we already know what world they live in. They will care about compliance and core web vitals and integration to enterprise software. They prefer licensing in many instances to building or open-source. We already understand much about their situation and how large teams work to maintain a digital presence, making things somewhat more straightforward and uniform.

However, when we speak to new companies, start-ups, or small to medium businesses, asking budget questions is essential. A company with a budget of $20,000 will receive a much different proposal than a company with an account 5x that. Both would result in a viable end-product, but you're going to receive more value on the latter end. Newer technology, longer life spans, more comprehensive concierge-level approach to completing the work, more design renditions… The list goes on and on.

Now, quickly, let's discuss the second awkward question… Timeframe. We ask this to better sense your understanding of how long things take. For the most part, these days, we receive reasonable expectations. Most of us have done these projects before. Those who haven't had the experience don't often come in thinking everything will take two or three weeks to do. Asking about timeframes helps us gauge if your budget is reasonable or not compared to the timing constraint. So it's essential to ask. 

How You Should Answer These Questions

A straightforward strategy you should take answering these questions – whether it's another guy or me asking - is to be honest and tell us! Here are the possible scenarios when we know what budget ranges and timeframes you are comfortable with:

  • It is not feasible. If this is the case, we'll pass and recommend other agencies who perhaps can attempt to get the project done within your desired limits.
  • It is reasonable. We'll work with you to identify a specification, then propose you multiple options to complete your project both below and over your proposed budget figure to clarify the differences.
  • It is outrageous (you can do it cheaper). This happens more often than you would imagine. Usually, it's when an enterprise company comes to our boutique agency world and tells us comparative pricing they are receiving from larger Madison Avenue agencies. In this case, you have an opportunity to garner savings and still have a best-in-breed result. (read our larger post about agency pricing divergence)

In wrapping up, I want to address the elephant in the room. An agency isn't asking you what you want to spend to just take advantage of your budget and maximize their revenue. If that is the case, you could amend your allotted budget and work off of that figure – a viable tactic. We're asking these questions to determine what route works best for your project to ensure the best chances of success at the lowest possible level of risk. So answer them honestly, if possible, because the result of your first call indeed dictates how the relationship will progress in the following stages and throughout the project.

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