June 9, 2022

How to hold honest conversations with clients about money?

Talking about money with a client can be a taboo subject, mostly because we were taught to be careful about money since we were young. It is important to first change our perception about money before engaging in a conversation. When someone pays you to deliver a service or product in exchange for money, this is them putting their trust in you. Our role is to simply allocate the money to energy well used. This demands that we separate ourselves from money & have an objective view of how the client’s needs can be fulfilled within the constraints of his/her budget. The more transparent the client is about their goals and expectations, the easier it is for us to set at least a minimum price to that.

Why do we need to talk about money?

Talking about money can be awkward. People avoid it because it's uncomfortable and unfamiliar—after all, we don't have a lot of practice talking about the other aspects of our lives in a way that acknowledges the monetary costs involved. It's also scary, especially for designers and clients. In the design industry, you're hiring someone to make a change in your environment—a big deal! And it's even more of a big deal when you're working with an amount of money that might seem intimidating to someone who isn't used to working with such large sums.

In many cases, designers are also working with people who are unfamiliar with the value of design, or may be intimidated or feel pressured by the amounts listed on designer websites—so they may be hesitant to voice their concerns or ask questions.

Given this, here are some ways to go about holding an honest conversation with clients about finances and budget.

Discuss it before beginning the project

It's important to have an honest conversation with your clients about money before you begin. There are a number of reasons why this is important. First, you want to make sure they know you're willing to talk about money with them—you don't want to have a one-off meeting where you tell them "these are my rates" and then never bring up money again. Second, it gives you a chance to figure out if they have any concerns they'd like to address with you. Maybe they don't want the project to take so long that they go over budget, or maybe they're worried about not being able to meet the deadline. You can make sure everyone understands what's on the table from the beginning and make adjustments as necessary. Make sure you take the initiative to open the discussion, don’t wait for the client to ask questions about money & pricing. This will help you be in control of the conversation.

It also gives them a chance to give feedback on your pricing structure and how much work is involved. This can be an opportunity for you to refine your process and figure out ways to streamline your work or do more of what works for everyone involved. Make sure to keep in mind that for some people, talking about money can be awkward, so this is where you need to be extra sensitive and prepared for some hard conversations.

You should always let clients know what you charge upfront and provide an invoice at the end of every project or visit. Your clients will have peace of mind knowing how much they are spending on your services. You can also encourage clients to bring up any concerns that they may have about money and work together on solutions that will ensure both parties are satisfied.

Rational, not emotional

As mentioned, it is important to separate ourselves from the value of money and focus on providing service that is worth what clients are paying for. Treat each new client as a person who wants to fix a problem. They have feelings, they have expectations, and they have relationships they care about. When you can take yourself out of the equation and see them as people with money who need your services, decisions become much easier.

In order for this to happen, though, we must be able to hold those conversations from an objective perspective. We should be able to see design not only as something that will increase profits but also as something that will gain value over time). We need to think about design in terms of the return on investment—the ROI it brings—and then teach our clients how they can see the design in this way too. Helping them understand why design matters are vital: if they don't understand, they'll never know why they should spend money on it, and without understanding why then things like quality and professionalism become more important than cost.

Be mindful of clients’ concerns

When you are providing a service, it is important to be mindful of your client's financial concerns. In order to create an environment where both parties can talk freely without fear of judgment or reprisal, resist the urge to offer solutions right away and instead try to understand what your clients are really saying.

When someone comes to you with a concern or frustration about finances, it is important for you to address that concern before moving on to whatever else you were going to do. This will allow them to feel comfortable enough in the relationship with you so that they might inadvertently disclose things that they may not have otherwise revealed. Here, you can then make corresponding adjustments and compromise as needed.

The same applies to yourself. If you’re concerned about the budget allocated versus the client’s expectations for a project, you should definitely address the issue & evaluate if the project is worth your time. Good negotiation is when both parties are able to understand each other’s concerns & agree to adjust accordingly.

Uphold transparency and empathy

Holding an honest and transparent conversation is more than just giving advice—it's about doing our part to make sure we're all on the same page. It's about being honest with yourself and your clients so they can make informed decisions, instead of feeling misled or misinformed. And it's about building trust so that your clients know you're genuinely on their side, and you're there for them if they need advice in the future. It’s about letting them know all the possible alternatives and choices you can go about without compromising the quality of the work you deliver and your welfare as a designer.

It's also important to maintain empathy for your clients by remembering that every project is different—every client has a different story and set of circumstances, and it's not always possible for everyone to have everything they want. While it may be difficult, try to keep in mind that your client is going through their own unique challenges at work and at home, and those challenges are going to affect the decisions they make regarding their business and their project with you.

The Anchor Technique

A simple way to lead the financial conversation with your client is to set a high anchor. You could tell your client for example “Based on my previous work, this project cost 1000$. After reviewing all the deliverables, we can make it happen for 800$.” This kind of conversation helps you set a high price & negotiate your way to a middle ground without devaluing your services.

Clients want to be heard. They want to feel like they can talk to you, but they also want to feel like they're not being taken advantage of. To establish that rapport with your clients, be honest and empathetic with them. Ultimately, when it comes to conversations about money, it would be much helpful that you are there not merely for the money but because you genuinely care about them and helping their business.

It is not always fun to have a conversation about money, but as a service provider, it needs to be a part of your daily operations. The more you practice the easier it gets. You are selling a service, and this means that you have to be able to communicate with clients about the cost of that service. Here, we have to be upfront and transparent in discussing our clients’ options with careful consideration of their circumstances and needs. The key to approaching talks about money is to let them know that you are not there just for the sake of it.