Buying Silver but Expecting Gold

After going through hundreds of discovery meetings, client brainstorms and project launches, we’re still finding ways to better set and manage our client expectations for the final product.

Typically, the start of the sales cycle goes something like this:

We meet with an excited client as they take us through their big idea. We dive into a creative brainstorm session, spitball ideas to make their experience even more impactful, and everyone leaves amped to get the project started. We then put together a ballpark estimate to give them an initial idea of what the costs could range and move to a more official quoting process if the ballpark is acceptable.

However, when a client comes to us with a highly involved (and therefor costly) vision with a budget that doesn’t align, well...that’s the first sign of trouble. Now one of two things must happen; the project must either be scaled back to fit their budget, or the budget needs to increase.

More often than not, projects are scaled back to fit the budget, and this…is the second sign of trouble. We’ve now transitioned from “the world is our oyster” to “what cool feature will we have to cut out of the experience” and let’s face it, nobody wants to remove the cool stuff. It is like going car shopping and test driving the top-of-the-line model only to realize you have base-model budget. We really just want to pay the base-model price and still get all the fancy gadgets.

Predictably, the client makes the scope concessions to fit the budget and signs on the dotted line. Yet even after acknowledging the features being cut, in their minds on final delivery, they are still expecting the experience to live up to the vision they had from the start.

That’s never fun for anyone involved, so our goal is to prevent that from happening at the outset of the discussion by managing expectations appropriately.

With that, here are 3 major considerations to understand when working through a potential project with a vendor:

Quoting

Going back to the sales cycle above, after the initial meeting we gather some reference material from the client and begin constructing a quote. Strangely, quoting is by far the hardest part when working through gaming simulations, software projects, or animations.

To illustrate, let’s assume that the vendor can provide everything from low-end (think basic artwork, simple designs) to high quality productions (mainstream video games or Hollywood-level animations).

The client must then determine where their desired solution fits on this spectrum. (And as an added caveat, deep down they actually have to be OK with their decision)

We could quote a gaming simulation/animation at $40,000 or $300,000 that includes the same assets and similar functionality. Now let’s assume we weren’t lining our pockets with the extra $260,000 on the high-end quote by delivering a marked-up $40,000 product, what makes up this massive cost difference?

The quality of artwork, lighting, sound, characters, rigging and animation, all of these are just some components that can be completed at various levels of execution.

Seems logical.

Now let’s say you wanted to run with the $40,000 animation, with less hours spent fine-tuning the above details. Chances are you’ll end up with a product that reflects it.

On the other hand, the $300,000 version of that same project could end up looking like the below.

It’s pretty easy to see where the difference in cost is realized. The lighting, level of detail in the character, and what really caps off the animation is how Sully’s hair moves as his body does. With a larger budget, there is much more latitude in making sure the fine details are addressed.

So now that depth is understood, what makes quoting such a difficult process?

Often vendors are asked to quote projects off a general synopsis of what the client wants, coupled with a handful of reference images. Armed with this information alone, your vendor will extrapolate what they think needs to happen in between the gaps, and how it will look. If it sounds a lot like throwing darts at a dartboard in a dark room, well, you’d be right.

So as a client, what should you do?

First, you should set quality expectations (based on your budget range) and allow the vendor to provide a ballpark estimate with a cost spread. If they deliver a fixed budget off of that breakdown then you should walk away. Why? Because they’re massively simplifying the process and the result will probably be subpar or completely different from what you have pictured in your mind. They’re likely either overcharging to avoid absorbing hidden costs that have not yet been identified, or you could experience “scope creep” and rack up additional billing throughout the process.

Second, the vendor that asks the most questions will typically be the most thorough (…or the most incapable depending on the quality of questions asked). Seasoned vendors will ask clarifying questions about the project and approach you with a list of concerns, unknowns and needs before delivering their final estimates. This shows they’re actively planning and analyzing the complexities of the project before it starts so there are fewer surprises along the way. Be wary of the bids you receive from companies that don’t ask any questions.

Throw the Traditional Request for Proposal (RFP) Process Out the Window

The traditional RFP process (submitting a document with a vague list of requirements) is not compatible with the discovery process for emerging tech solutions. If your organization expects a vendor to bid on a training simulation, software project or animation off of this process you will succeed at finding the vendor willing to work for the lowest price. But as the old adage “you get what you pay for” echoes in the background, the lowest price is rarely the best.

Scope creep is perhaps the biggest risk in trying to shove emerging tech projects into the proverbial RFP box. Since the requirements are not often specified clearly in these proposals, the process of turning a valve could involve one, or fifteen steps. If the vendor quoted based on one step, and the customer expects fifteen, commence the chaos.

We have gone through this process with some of the largest companies in the world and in nearly every project there are vague requirements that inevitably lead to debates on what is in, or out of scope. In the end, both sides are left unsatisfied with the result.

To have any level of accuracy, the processes desired should be thoroughly vetted and understood by the vendor. Not shoved into a vague document that the vendor is expected to decrypt with pinpoint accuracy, and little guidance.

Since vendors won’t succeed in boycotting RFPs altogether, what is the solution?

Consider two points:

First, your vendor should provide a ballpark estimate on the project initially. This allows them to tell you at a wide range what it will require to get the job done. This is a great starting point because it sets a range for price, quality and unknowns. Also, many companies try to keep their budget hidden but this range can help you align budgetary restraints to potential project requirements. Knowing the estimated price range is beneficial for both sides to see if their speaking the same language, or miles apart from the get-go.

Second, go through a more involved initial process with a vendor. We love working through the pre-production phase with clients, setting user/technical requirements and/or writing a script and storyboard. This will drastically reduce the number of unknowns and help align the vendor, client, budgets and expectations. Yes, this will cost money to get the documentation built out, but it will help eliminate technical debt, saving you hours of frustration, scope creep conversations and wasted time going through the motions with an RFP.

Once you’ve done the above, explore the RFP route if it is a requirement from your company and see where the cost lands, but we strongly recommend against requiring a fixed bid. If you do, one of two things will typically occur. The vendor will either under quote the project and potentially fall short of hours for fulfillment, or they will opt to charge the higher end of their spread estimate to mitigate the risk of unknowns and avoid taking a financial hit on the project.

If you find trustworthy vendors who do great work with a transparent process, then you should trust they will take good care of you. Find the vendors that have your best interest in mind and work well with you throughout the process.

Budget

I will keep this simple. Be open.

I feel like this element is the root cause of most problems. Clients want to keep their cards as close to their chest as possible and for good reason. However, at some point, you must show your hand. When you do, the results improve.

Why?

The first is time. Time = Cost. If you are spending time adjusting the scope, pushing vendor pricing down, and juggling both activities with multiple vendors you will find that it’s a time drain for all involved. Even if you are successful in pushing pricing down, you may subvert a quality threshold that drastically damages the quality of your project without realizing it.

We were once involved in a project where the client pushed our budget down to a level that could easily compromise the result. As we started reviewing the project, we knew it was going to fall short of their expectations. So we called the client to tell them if they infuse a bit more money into the project the quality would be significantly noticeable. Without much hesitation they pulled the trigger, and as predicted, the result far exceeded the results of what was possible with the lower budget. Better yet, the client was very happy with the end result.

You should know your budget and at some point during the process (preferably after an initial ballpark estimate) share it with your vendor. This will eliminate wasted time for both sides, and if it is a trusted vendor they will pack as much value into that budget as possible. After all, you just saved them a ton of wasted hours.

Wrapping it all up:

The processes in which you request quotes, proposals and determine budgets are crucial to avoiding project disasters. As the client, you make the final decision, so it is crucial to understand the optimal process when working with vendors. If the result of your project falls short and you are using a vendor that has shown good quality with a solid transparent process, then you need to take some time to review your processes to avoid future flops.

In the end it comes down to setting realistic expectations for what you’re getting, and it’s our focus to help manage expectations as successfully as possible throughout the project. If you decide to pay for silver and expect gold, then you only have one person to blame. Let’s rally together and help make the vendor and client process as smooth as possible.