The art of quoting for new clients.

[David Cleverly]

A couple of simple questions for when responding to a new client's quote request:

When a new client approaches you, how many of you ask what their budget is up-front?

When contacted by a big company with the potential for a lot of on-going work, how many of you quote the first job with them at a big discounted rate, just to get your company "in the door"?

Reasons for why you do and don't do these things would be appreciated.

Why do I ask?

Well, I just spent 4 days adjusting and re-adjusting a quote for a new (and very large) client and lost the job for what I believe are two reasons:

1) I didn't ask what their budget was, and

2) I quoted too high (even though I told them we were negotiable)

In some ways asking what their budget was still might not have helped me, because obviously they were shopping around (which quite frankly I was told they didn't have time for) and the fact that I said we were negotiable might have given them a hint that we were overpriced enough to allow some kind of negotiation.

During the quoting period, they gave me no indication whatsoever that we were competing with someone else. They simply told us this afternoon we didn't have the gig and they booked the other company because they were running out of time.

Still, I put it all out there and we still lost the gig. The afternoon before the shoot.

Next time I'll do it differently.

[Josh Bass]

I'm the worst businessman ever, but seems to me asking "what's your budget" might sound to them like "how much can we take you for?" (in other words, I don't do this). I think figuring out client/potential client psychology is probably key to landing gigs. So I'm interested in what others have to say.

When folks approach me they usually ask what's your quote/how much do you charge for X. And then I tell them, with everything broken down. I either never hear from them again (VERY OFTEN!) or we go from there.

Every client ever tells me they will have ongoing work (you'll never know 'til that second gig!). How many do? Mostly none.

Seems like giving the initial gig at the big discount is simply going to invite more attempts at getting discounted work. So I guess, don't do it unless you're forever after willing to give that client that rate?

If I'm willing to reduce my rate I certainly don't mention that unless it's asked of me.

("I charge $625 for that."

"We only have $500."

"Will there be bacon on set?"

"Uh, I guess, what does that have to do with--"

"I'M IN!").

[Don Bloom]

Tough to answer. Each case is different. I've gone the route of saying something like, "Tell me what you're thinking money wise because I don't want to insult you if we're miles apart." If they say "well we're thinking $1000" and I know the job is going to be in the area of $5000, we've got some talking to do. Of course here's the thing many of them don't have a clue as to costs. So you go ahead and quote it the best you can and hope for the best. If you don't ask them thier budget you could be over by a lot. If you do ask them, you could sound like you're asking them what's the most I can get from you. Of course even if they tell you, they're probably lying. They want to spend as little as possible and you want to get as much as possible. Somewhere in the middle you meet (hopefully). As for telling them you're willing to negotiate, I never and I mean never tell them that. Why? Simple. They're thinking "If you're willing to go to a lower price then why didn't you put that down lower number down on the quote in the first place." You have to imply without actually coming out and saying it that there might be some room to adjust. That's why I always specify everything and breakout all the numbers so I can justify lowering a number if I need to. Unlike 20 years ago, even 10 years ago, many large businesses have really tightened up their belts and of course they all have someone in the mailroom with a camera that can do the work for next to nothing. As professionals we have to justify the reason(s) our price is what it is. Tough to do. Don't feel bad about losing this one, sometimes you have to throw a lot of mud at the wall to get some to stick.

[Josh Bass]

It's too bad that simply pointing to your past work, the lighting, camera movement, etc. and saying "but can your cheapo mailroom guy do THIS? THAT'S why we charge the way we do" isn't enough.

Maybe show prospective clients examples of your work that are polished/lit/etc. vs a poor quality video from someone else. THIS is why we bring the light kit. This is why we. . .etc.

[David Cleverly]

Again, all great information...thanks guys.

Yes, my offer of negotiation wasn't quite as cut and dry as that - it was indeed hinted at as opposed to being said outright. However, I am not sure why they didn't say "hey we have got a cheaper price - can you get closer to it" unless, of course, we were so far above they bet we wouldn't match it. Or perhaps the other guys had been used before and they were looking at simply getting a newer, cheaper price from new supplier.

Who knows.

[Roger Van Duyn]

These are very challenging times economically. Many clients are struggling to stay afloat, and cost matters greatly. Sure, the marketing "gurus" all say to sell based on value, not price. However, in this economy, many clients are extremely concerned with their cash flow, and will decide against doing video at all, if they can't find acceptable quality within their budget.

What we can do is know our price of doing business, and be upfront about the pricing we can afford to give them. Give them a few options to choose from. For instance, a one camera shoot vs. a two camera shoot.

Certain jobs even can be done with the old fashioned "shoot to edit" way back in the linear editing (tape to tape) days.

Some clients barter, offering their services for yours. (Check with your accountant, there are rules).

[David Cleverly]

True, Roger. Thank you.

Business is about cash flow. In tight times, it is better to get at least SOME cash flow rather than none, without charging stupidly low rates, of course, as that means eventually you will go broke anyway.

Plus you have to feel like you are receiving a fair amount for your experience and energies whilst giving the client good value for money.

It still comes down to cash flow and that at least some is better than none. Within reason.

[Justin Kuhn]

I hate that situation. Just tell me what you budget is for the project and I'll tell you what you can get for that.

That never happens.

[Kevin McRoberts]

I have a day rate below which it doesn't make sense to work. I quote 100-200% above that (depending upon schedule and flexibility that week), state a willingness to budget depending on production budget and goals, and then await a counter-offer, and don't accept any counter-offer that's below the base rate.

If I quote the base rate, I wind up having to hunt for more and more clients, none of whom are willing to move above that base rate ever in the future. If I quote high but won't negotiate, I lose out on work. If I quote high and they say "sounds great!," then life is a bubbling bowl of mirth and glee.

[Roger Van Duyn]

I base my pricing on my hourly rate, then adjust the quote based on gear used, expected expenses etc. The good clients understand the tradeoffs between resources devoted to a project and final quality. More hours of work leads to more expense, more gear leads to more expense, but careful planning can reduce the labor hours and sometimes the amount of gear. Sometimes quality drops off too. The key is keeping the quality acceptably high while minimizing the costs.

Once a client knows you, likes you, and trusts you, they are very open to these discussions. (I know, slightly off topic, since we are discussing new clients). However, once you are known in your area, new clients in your business network listen too. (Guys from Rotary, Chamber of Commerce Meetings, Kiwanis, Advertising Federation etc.)

Several of my clients have been keen on learning the tradeoffs between one camera shoots vs. multicam shoots. You miss some of the good shots, but really cut down on the edit times, and hence the expense. Plus, I don't have to haul nearly as much gear to a gig.

It's not what you gross, but what you net. A $500 job that totals just five or six hours is much more profitable than a $2500 job that takes me fifty or more hours of work.

[Dave Blackhurst]

Just out of curiousity, how detailed was the "quote request" - I'm sensing a sort of haphazard planning (as in "we shoot next week") on the part of the client?

Sounds to me like this was something on a short timeframe/lo-budget shoestring sort of "plan". Was this by any chance for a cable TV ad where you may have gotten beaten by "the house"? Just a couple things that come to mind...


It doesn't hurt to clarify what the expectations/budget are, of course everyone wants champaigne on a beer budget, right? SO some massaging of expectations may be needed, but no sense in wasting time on someone who has a max budget of $500 for a $1500 minimum job - for future reference, you may want to evaluate ways to "qualify" the client up front before wasting time quoting...

One other possible eventuality is they may go with a "lo-ball" bid, find out what they get for that isn't what they'd hoped, and re-ring your bell... so may be worth a polite and professional follow up?

[Craig Seeman]

I start by asking them to describe the project and goals in excruciating detail.
1) The details expose how much thought they've put into it.
2) It can results in the client's "self awareness" as they realize exactly what they're asking for.
3) It establishes me as a good listener.

Depending on what I've learned about them I'll take one of two approaches.
Either
1) What's your budget?
or
2) This is what I'm thinking of and how much it would cost.

1 Happens if it sounds like they have a firm handle on things. They're experienced. They probably have some concept of what the want to spend.
2 Happens if they seem a bit more ensure and very much dependent on what I can do to actualize their vision.

On 1 my follow is what I can do within their budget.
On 2 they learn my costs relative to my actualization of their vision.

In each case they are then well informed so that negotiation involves adding or subtracting things so I'm never giving away anything.

In one example I estimated a number of locations and shoot days. My number was too high for them. We consolidated locations keeping the same basic content by shooting a few scenes at one rather than two locations. The result was lower budget due to fewer shoot days yet they got a product that basically included everything they wanted.

Of course you also have to know when to walk. I had one potential client, after discussing production rate, asked if I could throw in editing. Given the point in the discussion this occurred I said I was sorry I can't and got up and left. This was not someone worth negotiating with.

I've also walked out when a potential client said I can get for X$ again, after going through the project description and my price. If they can get it for less then why are they talking to me. If they like my work they'll pay more. If price is more important I'm not going to get into a real or imagined price war.

My rate is hourly although I'll usually talk in terms of 8 hour days although more gear may mean a higher hourly rate considering the cost of additional crew and expenses.

[Josh Bass]

So I see a few of your price hourly. Most around here do a half day/day rate.

I'm curious, with you hourly folks: do you ever find that clients try to negotiate down after the fact ("Hey Joe, I see you billed us for six hours shoot time on Tuesday. But really, that first hour was us just walking through the set and then you setting up, you weren't really "shooting", you know?, and then that last hour was you wrapping up gear, so that's not really shooting, you know? Oh, and we spent half an hour waiting for security to clear us for entry into the building at the start of the day, so let's subtract that time too.. .") Anyone ever get this? I always feel like I could get into this with hourly billing ("how do we know you didn't take an extra hour lighting just so you could bill for it?").

Seems like with half day/day rate, it's very clear: if we go past five hours after my time of arrival, rate goes up. Up 'til that point it's what we agreed on.

I know, I know. Some of you don't do half days. Point still applies to a full.

[Craig Seeman]

Generally while I price hourly I'm quoting the client half day or full day (day = 8 hours).
I make clear that includes all setup time and travel if there's more than one location involved.
Given my "day" is not open ended, I charge if it goes over, they can argue those things just as well. They generally don't though because I make it clear up front that once I start setting up the day has started.

[Tim Polster]

I think it is safe to assume everybody will be shopping around these days even if they say they are not. I have had quite a few quotes go into the abyss in the past year or two. Times are just tough.

But, that does not mean you should be asked to work below what you need to be working for. I also have a base wage I never go below for a lot of different types of work. I start with these numbers and if the prospective client can not make the numbers then it is not a fit. Done are the days when I will bend just to get them to say yes because you are setting yourself up for the next request to bend some more.

When you are competing with the guy in the mail room so to speak, that is more of a reason to keep your rates at proper levels. Free or low pay is not your competition, it is just always out there. If the client does not want to/can't pay for proper services etc... they will not. No sense in chasing and putting yourself in a less than optimal position.

So let this float on by as the issue is probably on their end, not yours. (given the last minute nature of the situation).