Managing clients who want to reduce their budget
As I write this post, I can hear the sounds of belts being tightened, rainy days being prepared for, and pinches being felt across, well, everywhere.
Not only can we feel our own budgets stiffen like the joints of an aging ballerina – worse! – we can hear the rumblings of our clients getting ready to cut costs.
Is it feeling like this for you too?
How are you preparing yourself at the moment?
Managing clients who want to reduce their budgets can be tricky and often uncomfortable, but like most things in life, a little technique can go a long way.
At KiN, we believe that business is solely about relationships and like all good relationships, the more we can make it about them, rather than us, the better for everyone.
Here are our suggestions for managing the clients who want to reduce their budgets.
(obvs, first you have to manage your own operating costs – some great guidance – HERE)
First we try to understand what their goals are, then we understand the pressures stopping them from achieving and only then can we talk about what we can do for them.
Raise the issue before your customer does...
As we have mentioned in other posts, getting ahead of problems, or acting as soon as possible makes a HUGE difference in the outcome AND our feelings of control of a situation.
Maybe you are tempted to just hunker down and wait and hope that your customers will be different, keep their budgets the same and that you will be as unaffected as a duck in a downpour.
And maybe you will be, but hope has no place in a business plan.
Hope is a good breakfast, but it is a bad supper.
Either you control situations, or situations control you.
As we have mentioned in earlier posts you only have three jobs in business.
- Build relationships
- Solve problems
- Manage the money
In that order.
All good relationships are built on the fact that both actually care about the other
So, taking the leap, opening the conversation and showing you care by exploring ways to get through this together is an investment that will pay off.
By opening the conversation they will see that at least a tiny part of you is on their side and they most likely will be more open to exploring options, rather than just slamming the proverbial door in your face.
Make the damn call, make it now, set up a conversation.
The worst time to do anything is when there are emotions involved.
Find the client's top priority
Small business owners often get stuck in the day-to-day problems of running their businesses. They often forget the bigger picture.
Help your people get clear and stay focussed on what is most important to them is a gift you can offer, by asking the following three questions:
- What’s the problem you want to fix with this budget?
- If you decide not to spend this money, how much money and time will it cost you?
- What does the perfect outcome look like once you have invested this budget?
Then you can focus your offer more on delivering the specifics of what your customer wants, rather than trying to add value where its not valued.
Provide a range of options
If a small business owner is feeling under pressure financially they will want to feel more in control.
Saying no to things, especially when the outcome is unclear …feels like control as the more they say no to, the fewer variables they feel like they have to consider.
By first checking the outcomes that the business wants, you can ensure that the scope of your offer is correct and you can build a more compelling offer.
Providing a range of options focused on those clear desirable outcomes will help your customer feel more in control.
Ask them what the maximum budget they have to create the outcomes they need for their business. You can then offer an alternate solution to match their lower budget.
Potential Alternate Solutions
- Change the format from in person to online.
- A group option for customers with a similar problem
- Less contact, more information based resources
- Offer to work on a single issue. A smaller project scope can result in more time-effective solutions
Focus on your performance/results
When you do get the chance to talk about your offer, make sure you focus on the value and impact you have had on other businesses towards the same objectives rather than the money.
The fact that they have thought about reducing the budget in the first place shows you that they have prioritised other areas of your business rather than accepting the same level of service from you.
The only way you can counter this re-prioritisation is by increasing their level of perceived value in the results you can offer.
For instance, nobody wants “social media marketing” they want:
- A bigger email list or
- More sales online or
- More visitors to their website or
- Any number of things that have real meaning to their business
By showing how you can help reach real business objectives, you can show what you do as a permanent investment in their business, rather than merely a purchased service.
You will be WAY better off if you can show how your service can solve their problems and prove value/ROI before leaning on a discount to overcome this objection.
Speaking of objections, you might simply get the response “it’s too expensive”
Too expensive...? Compared to what? What is the price of not acting?
- Not acquiring new customers?
- Not managing their books?
- Not taking care of their own team?
All businesses will still need to deal with all of the pressures they have now, if you can help your customers see that you provide real value to help them stay alive and thrive, then it makes sense to keep you onboard…doesn’t it?
Lastly…
By building a real relationship with your customers, rather than seeing them simply as a source of income, you are investing in your own future.
Even if they do decide to pause the relationship, if you can find a way to keep communications open and drop feed them helpful information and guidance, then who do you think they will come too when things get better in the future?
If this is making sense and you would like more help then KiN are running a series of ‘Ride out the Recession’ workshops that go into much more detail about all of this.
Click here to register your interest.
