The basic idea of this approach, in short, is to ask your client to specify the cost or budget suitable for them to complete the project. Personally, I don’t always use this method. Usually, I rely on offering a range of prices that I work with according to different sizes of work. If it doesn’t suit the client, we both apologize and move on. If the client wishes to mention their budget “without the intention of negotiating in another way,” I listen and understand the scope of work relative to it. If I like it, I proceed; if not, I apologize, and we stop there.
I’ve used this pricing method two or three times in my work due to circumstances that required it. In one instance, the client had a workload too large to quantify, and in another, the client had a workload too small to articulate. The first client found this approach suitable, and we worked according to their budget, resulting in a pleasant experience. The second client, however, found this approach unprofessional and unexpected from me, claiming that I disappointed him with this method and that it showed a lack of professionalism.
So, I ask myself and you now, what was the reason? Does the first successful experience mean using this method regularly, or does the unsuccessful experience mean avoiding it because it might actually reflect unprofessionalism?
First, Let’s Define the Business Transaction Between Two People
The idea, as I understand it, behind any business transaction for anyone providing a service is to provide a solution (effort + time + cost + method) that fits the client’s commercial goal.
• If I provide a solution and cost higher than the client’s commercial budget, I have failed!
• If I provide a solution or cost lower than the budget and commercial size of the work, I have also failed!
Understanding the Client-Based Pricing Method
Pricing based on the client’s budget is a method of working and determining effort and compensation. Its main goal is to arrive at a more accurate, fair, and professional cost for both parties but in a different way, similar to pricing based on the number of working hours, for example. It’s not an unscientific method or an indication that the designer or developer doesn’t know how to price their work. It’s also not a way to negotiate or avoid working.
Why Should We Be Cautious When Using This Method?
Especially early on and within our local community (not globally), for two main reasons:
• First: Some clients will use this method to negotiate with you in a great and simple way for them, without losing face. They will likely not appreciate your effort, and you’ll find yourself in a cycle of constant discounts for them and everyone referred by them. Not to mention that if you make a mistake in some part of the project (because you’re human), they’ll see it as a reason to demand another discount.
• Second: People with little experience and exposure in this field might see this method as unprofessional, which is what happened to me at the beginning of this article. You won’t be able to use this method with everyone and in all situations.
When to Use This Pricing Method
Why not use the hourly pricing method, or well-structured plans tailored to specific needs, and ask your client about their budget?
This Method Is Very Suitable for Unknown Workload Projects
Whether small or large. For example, the client might say, “The workload is very small; I just need basic lines to add beauty to the work,” or they might say, “The work is not clear to me yet, and I’m still working on some ideas.” The client might have a certain scale and style of the project in mind that may not be clear to you via email or a quick call. In this case, it’s better, in my opinion, to use this method, where the client specifies their expected budget, and you work according to it if it suits you (aside from the basic conditions of project scope and other agreed-upon matters). Also, using hourly-based pricing is very suitable in such situations.
This Method Is Very Suitable for Plan B
Let’s say you offered a client a specific quote for a project, and they found the amount too high and declined the work. In some cases (not always), it might be very useful to ask them about their budget to scale the work according to it. Your estimation of the project’s scope and what it requires might be off. This doesn’t mean you should lower the quality of your work according to their budget. But you can, for example, change the project structure and its tasks and postpone a certain part or segment to a separate future project, explaining this to them by saying, “I will handle task A for this amount, and we will postpone task B for another project or consider it less important according to your budget.” This will usually be suitable for both you and the client. When their budget increases, they will return to work with you on task B, and you will have received appropriate compensation for the work.
This Method Doesn’t Mean Taking on Projects for a Low Budget
It’s not just about lowering the price elegantly. Yes, in certain situations, it can be, but it’s not purely about price and finding a way around the client. It’s a pricing method or methodology in itself, not just related to discounts.
I once read somewhere: “People who buy and sell based on price alone often don’t know the word ‘loyalty,’ whether as a buyer or a seller,” no matter how they handle the price.
This means that a client who consistently bargains with you will not return one day. They’ll go to someone else simply because they got a lower price than you offered. Similarly, a designer who works solely based on compensation, no matter the method, will also not know the word loyalty—not in their work, not towards their client, and not when that client returns a second time.
This Method Doesn’t Mean Working for a Low Budget
The question now is: What if the client’s budget is small and doesn’t suit me, and they ask me to work according to it? Simply don’t work. The goal of this method isn’t to work for a low price. I always think of the low-pricing formula in this way:
The Low-Pricing Formula:
Low pricing leads to low quality, which will inevitably lead to customer dissatisfaction, resulting in negative publicity for your work, fewer clients and job opportunities, lower income, financial chaos, internal turmoil, taking on projects just to survive, and finally, failure.
Before Concluding
Here are some important points regarding pricing:
1. The first and most crucial step is fully understanding the project.
2. The second step is the suitability of the project for you and your suitability for it. You may not be the right person for it.
3. The next step is “attempting to understand the project’s scope,” not necessarily estimating its actual size.
4. If you can’t, you can choose another pricing method, such as hourly or budget-based.
5. Remember, the goal of pricing isn’t to lower or increase the price just to get the job; the goal is to provide a solution that fits the client and matches your effort in providing it.
In Conclusion
As I always say, everything I’ve written is from my perspective and personal experience, with a simple understanding of pricing principles and trying most of them in my work. I didn’t cover everything related to this topic, and what I mentioned aren’t necessarily rules that will fit you and your client. It’s just a basic foundation from personal experience that’s important to understand, and then you can structure it according to what you find suitable for your style and way of working.