Big Little ThingsThe problem with asking for an estimate
If you’re in any kind of creative services business, you’re probably used to having potential new clients ask you “How much will it cost for you to [insert creative service here] for us?”
And if you’re like most of the people I’ve worked with, you squirm a little (even if you pretend to be chill), and make some sort of gut calculation based on a few factors:
- How much money you think they’ve got
- How much you need or want money at the moment
- How much you want to have the project in your portfolio
- How well you get along with the people on the client team
- How likely they are to give you more work
- How elite you want to appear
- How tight the deadline is
- How much you care
Then you light some candles, slaughter a goat, commune with the spirit world, and come up with a number.
It’s not a very good system. No matter how confident they may seem, very few creative people I know actually feel confident about the prices they quote. It’s a game full of second guesses and crossed fingers. And it’s often a game full of regret.
And asking for an estimate ain’t so good for the client either, because it forces the creative firm to think adversarially about the client right from the get go. It forces the creatives into games of intrigue, maneuvers, posturing, and bluffs—all to “win” over the client. This is no way to start a relationship, especially one meant to thrive on collaborative creativity.
A good solution is to tell the client how things really work. Maybe say something like this:
“Look, a [insert creative service here] project can get done a lot of different ways. It can be big or small, deep or shallow, quick or slow. There isn’t necessarily one right way to do it. It’s very much a matter of chemistry and excitement and personality types. We’ve found that the best thing for a project is for you to first tell us how much you want to spend. We’ll take that number and think about the project, what it’ll take to get it done, how much we want to do it, and any other obstacles and motivators. Then we’ll tell you how to best use the budget you’ve got, and you can decide if you like what we suggest or not. Then, instead of negotiating abstract dollar counts, we’ll have a conversation about how best to get the work done with your budget. It’s more concrete, more human, more collaborative, and more transparent. For these reasons, it’s a much better approach, given how creative services really work.”
Got any other ways to make it easier for creatives and clients get together?
March 28th, 2007 at 5:57 pm
So my questions are:
A. Have you used that approach?
B. Does it work?
I’m just getting into a freelance project where the client’s first question was “how much do you charge?” My response was “what do you want to accomplish?”, This progressed into a conversation about their needs, goals, priorities, audience, etc. They really liked this approach plus it’s great for me because I’m learning how we click without haggling over a project estimate or hourly rate.
March 28th, 2007 at 6:56 pm
Hey Kyle,
Yes & yes. In fact, We just used that approach today , and it seemed to work quite well. It’s great to hear that it worked for a freelancer though–that’s an area I wouldn’t have expected it to work.
Here’s the thing: asking for a budget doesn’t mean that you’re going to take a pay cut. It means that you’ll be able to tell the client exactly what they can and can’t expect for the kind of money they have to spend. If you’re upfront about that stuff from the get go, the relationship’s gonna be much smoother.
March 30th, 2007 at 5:20 am
Sadly I have seen the process you describe (the one with the goats and all) used for software programming and application development projects as well. You’d think those folks would have a more rigorous way of doing it but a lot of small shops are very seat-of-the-pants, and the factor that overrides everything else is their need for the next check. (So they underprice.) I walked away from one such company thinking that accurate scoping and costing is probably a killer differentiator for small companies in the app dev business. Maybe that holds to some extent in creative services too?
March 30th, 2007 at 1:51 pm
True that, Derek.
Although, we’re a small shop, and we’re all about the seat-of-the-pants-strategy. It’s super hard to put a dollar value on creativity. Which is why getting potential clients to reveal their budget upfront is a good way to make sure no one gets screwed down the road.
April 16th, 2007 at 8:42 pm
Good post .. do you feel that if you had ‘acutals’ of the effort you spent developing various categories of deliverables, you could better estimate going forward …
Also, too often companies try to answer “what do we have to price in order to win the work” knowing very well that the ultimate charge will often be whole numbers greater than 1 times what they priced. We’ve personally seen this first hand by many “well-known” firms.
Another approach (especially in application development) is to really try to assess the complexity of what you are trying to build and providing the client with an estimate that is realistic while giving your clients insights into the actuals of what you actually spend on the project. We’ve done this at our firm for the past 5 years and have launched an estimation and planning tool — planixonline.com — to help others who struggle with this dilemma — whether they are IT departments or professional services firms.
September 16th, 2007 at 3:55 pm
[…] Via Tiny Gigantic, who propose a more mature and sensible way of coming up with fees. […]
March 8th, 2008 at 7:41 am
If I’m estimating a heavy interactive project, I do everything I can to limit scope and hold the client to a tight process. Otherwise you can fall into the Cone of Uncertainty and get totally burnt by feature creep.
If I’m estimating a project like an ad campaign or logo development or some such, I bill for the campaign concepting as its own piece, and hold the rest of the fee in abeyance until we’ve agreed on what the campaign demands.
Explaining to clients why these are good ideas often determines if they’re the right fit. Sometimes you just need to say no. You want thought partners, not clients.
June 12th, 2008 at 9:22 am
I’ve tried this method and it hasn’t yet worked for me. Typical transaction:
Client: “So how much do you charge for X?”
Me: “What is your budget for this project?”
Client: “Tell me what you think this is going to cost”
I think the client doesn’t want to lay out their cards on the table. It’s almost like they’re afraid to give a price that’s too high not knowing if I would’ve been able to do their request for lower than their budget estimated. I feel like the first person to cough up a number is the most vulnerable.