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What’s Your Budget?

March 24, 2011

Industry Observations

How many times have you found yourself in a competitive bid situation for a project where a prospective client provides you parameters for a project but doesn’t tell you how much money they have to spend on this project. Instead they send out an RFP to 3,4, sometimes more companies, and look at what comes back. Once they receive the response they automatically turn to the last page to see the proposed cost. If only I had a camera to capture their expressions.

My question to all who solicit information from vendors is why not reveal what you have to spend on the project upfront! For starters you’ll weed out those that want or can participate from those who can’t. And perhaps more importantly you will have a better chance to evaluate what you can expect for your money, not to mention hidden costs. The last reference is geared more towards the advertising industry where someone will come in with a low bid only to bill you multiple times over the original budget in the form of “change orders” because you know the client will change his mind more than once. It’s almost comparable to a larger service company underbidding a smaller company because they know they can make up the dollars on the service contract the customer will need.

I realize there is a lot of psychology that goes on in business but is this one game we can change so everyone follows the same rules and the customer can make a more informed and educated decision.

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