Entrepreneur - - By John Tabita

Quoting a Ballpark: Home Run or Strikeout?

I hadn’t eaten breakfast and the aroma of broiling hamburger wafting through the summer air started my stomach rumbling. The sun baking the back of my neck wasn’t helping my mood. Most of the people milling about (presumably as hungry as I) were complete strangers—friends of my wife’s cousin and his girlfriend. The star of the event, the one-year-old birthday boy, toddled about the backyard, squeezing indiscriminatingly between the legs of family members and strangers alike. Seeing that the food wouldn’t be ready for some time and my wife was nowhere to be found, I looked around for someone I knew … anyone. I struck up a conversation with a man who looked vaguely familiar.

After exchanging pleasantries … the weather, how we know the birthday boy’s parents … we moved on to “So, what kind of work do you do?” (I’m still not sure what an Adhesives Compartmentalist is). When I got my turn to share, he became a bit more animated and began telling me about his “other job”—a business venture he was just getting off the ground—and then it came … that one question you and I dread to hear (much less want to answer): “I’ve been looking into getting a website … about how much does something like that cost?”

It has all the markings of a lose-lose situation. Quote too high a price and you probably won’t ever hear back from him. But if you under-estimate the cost, you’ll look shady if you actually bid for the job and your proposal comes in higher. So what’s a poor web designer to do? Bite the bullet and throw out a number? Or tell him you can’t quote a price without knowing exactly what he needs? Here are a couple of approaches you can try.

The first is to take the consultative route. Assuming the hamburgers still aren’t ready and you’ve got the time, try engaging him in a meaningful conversation about his goals, objectives, and so forth. People who are purely commodity buyers may view this as an invasion of their privacy, because these types of buyers see no value in a consultative relationship with you. I find that people who are unwilling or evasive about answering questions are typically the price-driven commodity shoppers. Since cost is their primary buying determination, their attitude is, “Why do you need to know all this? Just give me a price already”. Even if they do spend 20 minutes or so going through the consultative process with you, oftentimes the bottom line is that you’re still “too expensive.”

The other option is to look at quoting a ballpark as an opportunity to quickly weed out those who don’t have a budget. As the saying goes, if you are going to lose, lose early. If you’re going to quote a ballpark figure, you may as well do it as early in the conversation as possible.

(I’ve learned that it’s best to actively look for all the reasons why the two of you wouldn’t do business together. If you want to think of quoting the price as a “blow,” then strike the blow as early as possible. If your prospect is still standing, then you’ve eliminated at least one reason for not doing business together.)

To do this, you’ll need to have a minimum project cost and make it clear (in the nicest possible way, of course) that nothing goes out the door for less. If that blows them out of the water, at least you haven’t wasted time preparing a detailed quote for the same end result. If your minimum price hasn’t disqualified them as a prospect (meaning that the price is within their budget), move into the consultative process with them.

When throwing out a ballpark figure, you can take advantage of a psychological principle known as perceptual contrast. It works like this: If I want to borrow five dollars from you, I’m more likely to be successful if I start off asking for $20. If you refuse … and then I ask for the five, you’re more apt to comply. Why is that? Because five dollars doesn’t seem as much compared to the $20 I first asked for.

So here’s how you can use this principle. When someone would ask the fatal “how much” question, I often said something like:

“Well, it really depends on how elaborate a site you need. We recently did a high-end web site for $25,000.” Then, after the look of shock subsided from their face, I would add: “But you probably don’t need something that fancy. The average cost for a basic site is around $2,000. Is that within your price range?”

I recall having that conversation with someone I’d become acquainted with at a weekly networking meeting. She was a perfect candidate, having just started a business with a product line that would do well online. But she repeatedly told me “she couldn’t afford me”. After several weeks of answering her questions, she suddenly announced to me that she wanted to hire me.

Keep in mind that everyone has a primary buying motivation, so pay close attention to the first few questions a prospect asks. If they start off with, “I want to do such-and-such. Is that something that you can do?” then I know they are thinking about the end result. They have a particular objective in mind and their buying decision will be based on finding an expert who can get the job done. Sure, they probably have some type of “budget,” but if you can find a way to work with them, you’ll most likely get the job.

On the flip side, if the first thing out of their mouth is, “How much?” chances are they’re one-hundred percent price -driven. Being completely clueless about costs, they are shocked when you quote them $5,000 when they expected $500. I once met someone who, when he found out I was in the web business, said, “I need a website for my business. How much would something like that cost?” When I told him my minimum price, he admitted that he had already met with someone who had quoted him a third of that. So all he was doing was fishing to see if I were cheaper.

Just because someone asks for a “ballpark” doesn’t necessarily mean they are a tire-kicker or a cheapskate. You must take the entire context of the conversation into account and pay attention to how and when they ask about cost before jumping to such a conclusion. The key to deciding how to handle this lies in your ability to ascertain the type of buyer you’re dealing with. Consider every conversation as a chance to hone this critical selling skill. With enough practice, you’ll be able to weed out the commodity shoppers without missing the legitimate opportunities that present themselves.

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