App dev outsourcing – the budget question.

budget question

The point of contention in app development contracts is usually the budget. Both sides(customer and team) try to put a number on the project and see the other side’s reaction. We’ve seen this happen a number of times. Simply put, the budget question is the team’s way of better understanding the customer’s expectations. The customer’s response here is crucial since it will directly impact how the team would take things further.

Customers don’t usually answer this question properly in the early stages of discussions. Responses are usually along the lines of:

  • I’m not sure how much I should be spending here.
  • I’m not worried about the budget, I’d like to ensure quality first.
  • I don’t know. How much do you think this would cost?

These responses don’t shed much light on either the budget or expectations on the product. It only makes the customer defensive and dodgy.

Vendors need to spend time understanding the scope and effort that would be involved in developing the product. If the product is to become successful one day, the team needs to share the client’s vision too to some extent.

General sales principles dictate that a customer’s budget needs to be qualified in order to make a viable business proposal or pitch. But that’s where the professional product development market is different. Customers here are not making a planned purchase and are often talking to more than one dev shop for a certain project. This is why vendors need to be more diligent and careful before popping the budget question and need to ask in a nonlinear fashion. Consider the following two scenarios:

Scenario 1:

Customer: Hey! I’m looking  to build an e-commerce store for my business.

Sales Team: Well, what’s your budget?

Scenario 2:

Customer: Hey! I’m looking to build an e-commerce store for my business.

Client Advisory Team: Sure! This can be done in three ways. Would you like to know more to see which would fit you best?

It’s no surprise that scenario 2 is where the customer’s expectations can be understood better and effective communication will take place. Subsequently, discussions will proceed to the next stage.

Presenting a customer with options would give a vendor better chances of estimating the scope and also a better idea of the associated budget while making a pitch. It also gives customers the feeling that the team is flexible and is ready to work together to arrive at the best possible solution.

At the same time, customers who respond with very ambiguous answers to the budget question run the risk of the team losing interest or patience in dealing with them. Customers are bound to receive varied quotes from different teams. They could use this to establish a budget range with the team. This would allow both sides to look at various options and see which one would be financially feasible, keeping the product roadmap in mind.

Teams ask the budget question in order to qualify a customer, not to quote within the budget and win the project at any cost. It’s another step in understanding the project’s scope and the customer’s expectations.

We work with customers and teams every day and we always make sure you speak only to the relevant teams. Tell us about your project here!

Author Bio: Pravir Ramasundaram is our in-house content editor here at ContractIQ. Keep coming back to read more of his articles on mobility & outsourcing.

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