That’s too much! Your price is too high. The other guy came back with a lower bid.
These are just a few of the frustrating responses you may be used to hearing when you give a potential client a quote. While “Your price is too high” can mean that the client just can’t afford the work, it could also indicate they don’t have a realistic grasp on actual costs. Learning how to deal with potential clients who have unrealistic price expectations is a challenge. All clients have a budget, but what they expect that budget to cover may be wildly impractical. If you encounter potential clients who have unrealistic expectations regarding the cost of a project, consider our recommendations How to Keep Customer Price Expectations Realistic.
The first step to help avoid customers with unrealistic price expectations, is to qualify the lead. Homeadvisor recommends asking each lead these 4 questions to determine if you are a good fit for their project.
- Tell me about your project.
- What is your budget?
- What’s your ideal completion date?
- Have you researched your project?
By asking these questions you should be able to determine whether the potential client has an idea of the scope of their project and the investment it will require. If they are unwilling to share their budget, that is a major red flag. Consider adding the question “How did you arrive at your budget?” to the list of qualifying questions. It’s very possible the number they have set for their project is random and not representative of the true costs to complete the job. It may simply be what they want to spend, and is not even close to the most conservative estimate. If they haven’t done any research it could be an indicator that any price you come back with (no matter how reasonable) will send them into sticker shock. If they aren’t qualified to buy from you, it will rapidly become clear the issue isn’t your price, but their lack of budget and understanding.
If you’re having trouble getting the client to commit to a firm budget, give them a range of prices and explain what you can accomplish with each level of investment. Remodeling Magazine suggests, “Give them three price ranges that their job will fall into. Not one lump sum figure, not two broad figures, but three well-defined ranges. You want them to make a decision, and that is why the wording is so important. Start with the middle range, move to the top range and finally explain what they will get in the low budget.” Giving the client a better understanding of what they can actually get with each level of investment will help to open their eyes to the true costs of the project they are asking for.
Once you are able to educate the client on what they can get for each level of investment, it takes the mystery out of the quote and gives them the opportunity to better understand the scope of the project. Even if you are priced a little higher than the competition, if you take the time to explain the value they are getting for the cost, you may win out in the end.