At some point in the sales process the question of budget must be addressed.
Ideally – it would be great if the prospect would volunteer their available budget, the price they are currently paying or even what other competitors have quoted…how often does this happen?
Furthermore, if this information is volunteered by the prospect, then how much store should a sales person have in the reliability of the information?
Maybe the prospect wishes to negotiate the best price, therefore offers an artificially low figure to force competitiveness? Perhaps the prospect is volunteering a budget figure he thinks he can persuade his boss to sign off on? Or worse – the prospect has guestimated what he thinks the budget should be and wants a top end product or service whilst only paying for a basic version.
The point is, who knows whether the information (if it is made available) is to be trusted or not.
Even so, as a sales person the budget information is vital.
Why? No-one wants to quote blindly, it’s a waste of time, expectations need to be managed, explanations need to be made, sharing and transparency are vital, ideally when the prospect and the sales person are still in the same room and not post event. At this stage the sales person still has control in the sales process and may have a much higher level of influence than if the discussion is remote.
So, we would ideally like the budget information – true or not.
How do we ask the budget question without offending the prospect?
Few things to remember:
- The sooner you raise the budget question in the conversation – the higher the risk you take that the prospect will feel that you are only interested in the order value.
- Even though the blunt question is ‘ What is your budget?’ asking this question at any time in the sales call can have a negative impact…therefore wording and structure are important
- If the prospect has not mentioned budget throughout the call, do not leave the meeting without having the budget conversation…better now than later having to do a lot of guess work
Tackling the Budget Question
This technique will allow the sales person to get to a figure that seems logical and well thought out to the prospect – and the prospect is in the position of agreeing or disagreeing with the quoted figure…whilst there is still time for the sales person to do something about it. So how do you do it…?
- Leave the budget discussion until the last element of the sales call
- Only introduce the subject of budget after you have discussed benefits, value and expected ROI (Return on Investment) of your product or service
- Explicitly and with total transparency talk the prospect through the ROI model, the payback, the period of payback, the areas of the product or service that will positively or negatively impact on the ROI
- Check that the prospect fully understands the ROI and is happy with it
- Take the prospect backwards through the process to get to a ball pack budget figure based on the agreed ROI
- Clearly state the value element of the product or service versus the current provision
- Get agreement – in principle – to the ROI and the ball park costing BEFORE leaving the meeting
Using these structured techniques you may never need to ask the budget question again – far simpler and less contentious this way.
Morton Kyle Limited
0779 002 1885