One thing we were all taught in our first sales 101 classes is that you must always make sure that your prospect has the budget to afford your product or solution. I have found through my 35 plus years in sales and sales leadership positions that this axiom is hogwash. The reality is that prospects that use the budget excuse are really telling you that they are not the final decision maker!
Two Reasons NOT To Ask The “Do You Have Budget” Question
First, if you do ask the budget availability question you risk having a non-decision maker claim that no budget is available for ‘x months’ which effectively stops the sales process its tracks.
Second, if you really are engaged with a decision maker, then asking the ‘do you have budget’ question makes you look like an amateur because you don’t recognize the authority level of your contact.
The reality is that decision makers can always find the money if your proposition is compelling. Every executive understands that improved results require investments. A CEO that wants to double his or her factory output knows that investments in plant and equipment are required to make that happen. It doesn’t matter if your are selling sales training, CRM software, or business intelligence solutions, the person considering your solution and making the decision is going to focus on the ROI of your proposal and how much business disruption will occur while implementing it. Consider the following points when preparing and presenting your approach.
ROI Every company has some process to evaluate the ROI of an investment. Understanding the metrics they track and how they are applied is critical to your sales approach. When making an ROI pitch don’t use industry numbers or averages. Ask the decision maker for their company specific metrics to build your model. Nothing derails a business discussion faster than arguing about which number is right – yours or theirs – use their number and keep the discussion focused on the value the solution bring to their business.
ROI Timelines Setting realistic expectations is also an important part of this discussion. Every executive wants immediate improvement, meaning if there is a ramp up timeframe to your solution make sure that all parties know when results will be seen. I have witnessed several programs that were stopped during implementation because the executive team expected results earlier than what were realistic.
Business Disruption There will be some level of business disruption when new programs or solutions are implemented. Decision makers will want a level of comfort that once a deal is done your company will be there to guide the process and provide the mentoring needed to help them become self sufficient. Remember that every person in your target company has a “day job” so it’s important for them to know you have the right resources available to minimize the transition impact.
It’s also likely during this time that out of scope items will surface. Having a good change management process will reduce the costing/pricing aspects of this situation so make sure you have discussed it during the contracting process.
There’s always money available to spend on things that matter, and what matters is fixing a problem or creating an opportunity that’s valued by the person making the decision to purchase. Make sure you are positioned with the decision makers that can say yes and don’t waste valuable selling time on those prospects that use budgets as an excuse not to buy.
by Dan Hudson
http://3forward.com/
Two Reasons NOT To Ask The “Do You Have Budget” Question
First, if you do ask the budget availability question you risk having a non-decision maker claim that no budget is available for ‘x months’ which effectively stops the sales process its tracks.
Second, if you really are engaged with a decision maker, then asking the ‘do you have budget’ question makes you look like an amateur because you don’t recognize the authority level of your contact.
The reality is that decision makers can always find the money if your proposition is compelling. Every executive understands that improved results require investments. A CEO that wants to double his or her factory output knows that investments in plant and equipment are required to make that happen. It doesn’t matter if your are selling sales training, CRM software, or business intelligence solutions, the person considering your solution and making the decision is going to focus on the ROI of your proposal and how much business disruption will occur while implementing it. Consider the following points when preparing and presenting your approach.
ROI Every company has some process to evaluate the ROI of an investment. Understanding the metrics they track and how they are applied is critical to your sales approach. When making an ROI pitch don’t use industry numbers or averages. Ask the decision maker for their company specific metrics to build your model. Nothing derails a business discussion faster than arguing about which number is right – yours or theirs – use their number and keep the discussion focused on the value the solution bring to their business.
ROI Timelines Setting realistic expectations is also an important part of this discussion. Every executive wants immediate improvement, meaning if there is a ramp up timeframe to your solution make sure that all parties know when results will be seen. I have witnessed several programs that were stopped during implementation because the executive team expected results earlier than what were realistic.
Business Disruption There will be some level of business disruption when new programs or solutions are implemented. Decision makers will want a level of comfort that once a deal is done your company will be there to guide the process and provide the mentoring needed to help them become self sufficient. Remember that every person in your target company has a “day job” so it’s important for them to know you have the right resources available to minimize the transition impact.
It’s also likely during this time that out of scope items will surface. Having a good change management process will reduce the costing/pricing aspects of this situation so make sure you have discussed it during the contracting process.
There’s always money available to spend on things that matter, and what matters is fixing a problem or creating an opportunity that’s valued by the person making the decision to purchase. Make sure you are positioned with the decision makers that can say yes and don’t waste valuable selling time on those prospects that use budgets as an excuse not to buy.
by Dan Hudson
http://3forward.com/
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