Speak Up Archive: Qualifying Prospective Clients

By David C. Baker. Originally published by Recourses, Inc.

Life would be sweeter if you could just anticipate the quality of a client relationship before accepting it. The ideal client roster has 3 clients, each of whom represents 25% of your work, and then 3—4 “feeder” clients who comprise the remaining 25%, any one of which could become significant in terms of billings.

That scenario is tough to find in the real world, but it’s worth honing your “dating” skills so that you are only spending time with marriageable material. And the easiest way to do that is to ask questions of the prospective client.

First determine who they’ve used in the past. You don’t care so much who it was, but you do want to know that they’ve used a firm like yours (or better). If they haven’t, and in essence you’ll be breaking them in, run like heck. This is the most important criteria. If they haven’t used a professional provider before, politely throw up a roadblock so that they are scared away (or further qualified) at the outset. Note: even if it’s a startup, at least the decision maker has to have used a firm like yours before.

Second, make sure the decision maker is spending a budget and not their own money. Buy-in at the highest level is important, but when people are too attached to their own money they skimp and bring the potential results down with them.

Of course there are others things to consider, like chemistry, potential billings, creditworthiness, etc., all of which should be evaluated.

But here’s a quick question that separates the qualified prospective clients from the really qualified ones: “what is your budget?” Ask that question and pay careful attention to the answer. It is a watershed identifier.

When asked about their budget, the prospective client will say: “Our budget for this is $130,000.” Then they’ll follow it with a question of their own: “What do you think we can get done for that amount of money?”

When that same question is asked of the unqualified prospective client, they’ll say: “We aren’t sure yet what our budget will be [the first lie, usually]. But here is what we need done. Can you get back to us with a price?” They think it’s like Priceline has come to the marketing communications world, and they suspect you’ll rip them off if they tip their hand and let you see the budget.

Except for internal, non-commercial use, no part of this document may be reproduced, stored in a retrieval system, or transmitted by any means, electronic or mechanical, without the prior written permission of ReCourses, Inc. �Copyright 1998 by ReCourses, Inc. All rights reserved.

There is an entire methodology of salesmanship by a guy named Jacques Werth called "High Probability Sales" that sounds much like what this article is about.

I agree with the above poster that it was just getting interested when it ended. But if you get the HighProbSales book that might help fill in some gaps. Warning: the book is cheesy as hell, but the ideas are sound.

On May.09.2004 at 04:15 PM

I too feel that the article was truncated, and also I feel that the final premise is wrong. Today it is increasingly common for a valid prospect to have a well-defined set of goals, but no preconceived idea of what it may cost to attain them.

They may be less knowledgeable in this area because their work experience was gained an "in-house" environment, where their exposure was limited. Or they may want to see how you would approach the task disconnected from financial concerns. If you filter out all prospects who don't have a pre-conceived budget, or don't wish to verbalize their budget up front, you will be drastically limiting your pool.

On May.27.2004 at 11:28 AM

For the prospective clients who don't have a set budget from the beginning....you could ask for a range, to get an idea as to whether they need you -- or their nephew who's still living in his parents' basement at age 30. I've found this method to be a pretty effective "weeder" without having to slam the door too soon.

On Dec.18.2004 at 12:20 PM

Great article. I don't really have a method of qualifying clients - this gets me thinking that I should. Along with qualifying the client financially, it might also be a good idea to see if they would be a good fit with your firm. Many clients may hire a firm based on price and/or experience in their industry, not their work and their ideas. Not being a good fit may mean a lot of wasted time creating work that the client does not like.

On Dec.18.2004 at 05:36 PM

Just a (perhaps naive) question...Wouldn't this sort of qualifying, especially a credit check, potentially turn clients off?

In theory, a hardball approach such as this seems appropriate, but in practice, does it work? I'm wondering about more saavy approaches to "taking a client's temperature," with regard to their budget...that is, isn't there a better way to suss this out, such as a proposal, than to blatantly ask them how much they have to spend?

My experience with (some) clients is that they simply do not know what graphic design services cost. This is not necessarily a reason to run, but an opportunity to educate, and in doing so, potentially form a relationship with a good client.

On Feb.22.2005 at 03:32 PM

While it's nice to work with clients who are used to dealing with professionals and know how to set a budget, there are plenty of good clients who don't.

The "Priceline comes to marcoms" approach is certainly around, but it's not the only response.

When clients don't have a budget, I'll start talking to them about the kind of budget(s) that might be appropriate. This way you get a sense of whether they have any ideas in mind. I've worked in a number of situations with people who are unfamiliar with marcoms work, but are smart enough to 'get it' pretty fast. Among them have been lawyers and investment bankers who already think in terms of billable hours and professional fees. If you present yourself as another professional in a complementary field, they'll happily accept you fees - and appreciate your help in formulating a realistic budget.

If the client is fundamentally honest and professional (and so are you!), you should be able to discuss these matters openly. They know you're trying to earn a living and make a profit from doing valuable work. They want the value in the work. But you do need to demonstrate that value. And if it's competing against cheaper alternatives (stock/less experienced/whatever), you need to clearly explain the added value of your service.

With clients that don't have a budget, I recommend an informal talk either at the first meeting or a specifically planned meeting. By "informal" I mean: show them a similar job you did and say "this cost $X". Or show them a typical budget breakdown for a similar project

Never just send them a single figure without carefully discussing and negotiating what's being quoted. Then give them lots of detail to go through.

If you go the "single figure" route there'll always be someone with a lower figure. By careful discussion, detailed line items, possibly options, you'll communicate your approach to the project and give them lots of questions to ask themselves about your competition ("I wonder if this other quote includes international usage rights?"; "He's allowed for two rounds of client revision. Does the other quote?"). So even if your price is higher, you'll get a chance to discuss it and negotiate it.

And if they say "I've had quotes at $80 an hour and you want $120", you can just ask "But can they do what I can in an hour? Or at all?"

Of course, if I think a prospective client is trying to squeeze me, I'll just find a way to politely decline the work. I never think there's any point in being unpleasant. Better to say "Well, if the budget's that limited, you probably should get your nephew to handle it." If you do it graciously enough, you might get the call to fix to the nephew's screw up. Or they might bring you back in when there startup goes national and needs some more brainpower (this has happened to me).

On May.25.2005 at 03:48 AM

I'm not sure if I agree with the article, for the following reasons:

1. Surely the ideal client roster varies from firm to firm. Obviously, the roster strategy given by the author would be highly viable for an independent, freelance designer. However, for a grahpics design enterprise with multiple designers, the number of client relationships that could be effectively handled would be considerably greater. Major players in the industry such as Interbrand and Landor can have hundreds of concurrent engagements with clients around the world.

2. If all graphics design firms refused to work with people who have no experience working with professionals in the past, the global client base of the industry would naturally decline. There are many businesses that have made bad decisions in the past when it comes to their identity and realize they need to make a change and retain the services of a professional. There exist considerable new business opportunities serving such clients.

3. The pricing for services in this industry varies dramatically from company to company, and it is unreasonable to expect that any client would know the "market rate" for the services they are interested in. It frequently pays to design a service plan around the client's budget.

A much better philosophy on new business development was given to me by an executive at a major ad agency. Simply put, two out of three conditions had to be met in any prospective engagement:

The ability to do good work

The ability to have fun

The ability to make strong profits

If just one out of these three was present (for example, the potential for profitability), the engagement would be declined. Using this philosophy ensures that any new business pursued by your company will be work that you believe in and want to do, and consequently the quality of your engagements and the quality of work that you provide will increase.

-WGW

On Jun.30.2005 at 07:42 AM

I like WGW's three philosophies. They are abstract but allow you to interperet how you define those and still have three sound strategies.

I would like him to chime in on what he means by profitability. Do you mean making more $$ than a time and materials rate? Or do you mean not losing money (i.e., you predicted 50 hours and really spent 60?)

A critical thing to determine, that is closely related to budgets/pricing, is finding out what the client thinks is good design by having them show you samples. If they find your fees too high, it could be they will be happy enough with design work that is not as good as your own. And talking them into working with you might be a waste of your time, and theirs. They might have cadillac tastes on a yugo budget. Seeing what they've collected or like can tell a lot.

Sometimes I'm the only designer providing a price. This might seem ideal but occassionally I'm asked to lower my price and I've gotten savvier at asking what that request is based on. A determined budget? What they've paid in the past? When they can't answer, I know they're arbitrarily viewing my price as high, even though it could be lower than my competition.

I have also heard it said that if money comes up too quickly in a discussion, you are likely to have a battle all the way down the line. I have found this to be true.

On Jul.13.2005 at 01:12 PM

I agree with the last three posts here. My difficulty with the article is that it makes too many generalizations. The one thing it does to a good job at point out is that you should always go for the "true" decision maker. I've found that if you give a quote and the client comes back and says something to the extent of "thats not in my budget", then you want to go around, up and over that person to get to the person who can add a 0 to that budget.

Sales guru Jeffrey Gitomer does a better job of explaining this than I in his Sales Moves column.

On Aug.19.2005 at 10:12 PM