As many managed service providers (MSPs) will know, uncovering a customer’s potential IT services budget isn’t as simple as just asking. Sure, you can come right out and ask, “What’s your budget,” but how do you know a customer will give you a real figure?
Chances are the customer will begin low with you. And that’s a bad place to start because that number may be far lower than what the customer needs to spend to meet real business needs.
So what do you do? Skip asking the question and risk making a proposal the customer can’t afford? That’s no good, either. You’ll need a better way. Here are four tips to help you uncover the customer’s budget and set realistic expectations before preparing a services proposal:
Any enduring managed services engagement starts with a needs assessment. The customer has pain points and goals that need to be addressed, and your mission is to address them in a satisfactory, affordable way.
So the conversation needs to start there. Find out what the customer is looking for, verify the company’s needs by assessing their existing environment, and come up with a plan to address those needs. Customers who are vague about what they want either don’t really know, in which case they truly need your help, or aren’t very serious about retaining your services. Try to determine if it’s the latter so you don’t invest too much time in a deal that goes nowhere.
Since you don’t want to come right out and ask for a number, you’ll need a way to finesse your approach in uncovering the client’s budget. Try asking for a ballpark figure.
Some customers might remain circumspect, but a serious prospect will agree to talk in general terms about what they are willing to spend. Early in the conversation, neither you nor the customer wants to be locked into anything, so this gives them a chance to broach the budget without making a commitment.
Everybody likes choices, and your customers are no different. Offer customers a price range based on varying service levels to put them at ease. They will appreciate the opportunity to think through what their needs are and decide what they can’t live without. If, instead, you give a customer a single option with a non-negotiable price, you’re less likely to win the business.
When you give customers choices, that’s when you are most likely to zero in on their true budget. Customers are bound to reveal themselves at that point. That’s when you’ll want to take the opportunity to remind them of value.
Point out that transferring IT tasks to you saves them time and resources, and allows them to focus on the core business. As a result, they might be able to spend a little more and, therefore, go to the next service level. But if the customer holds firm, don’t push your luck. Close the deal and make a note to revisit the possibility of adding more services in the future. A year from now, after you’ve proven yourself and the customer is happy with the service, that budget figure may just get a little bigger.