Uncovering a Customer’s Budget – Part II

First off, let’s get this out of the way. Everybody has a budget! Now then …

They may not know how much your service will actually cost – Educate them! Most, if not all, buyers today will self-educate with Google. I am certainly no exception. In many cases, this means that I know about as much of what is needed in order to be considered dangerous. Very dangerous.

Of course, this will vary by product, service, and by the buyer’s level of expertise in these areas. Still, as a professional salesperson, one of the ways to differentiate yourself from your competitors will lie in your ability to provide your customers with quality, understandable, education.

They probably don’t want to share it with you – You might spend it all. Maybe yes. Maybe no. Your job is to give them the best solution that meets their needs and that could very well be a product or service that is significantly less than what they are willing to spend.

They do have a good idea of what they are willing to spend – No budget but … I do know how many nickels I have in my pocket. Now, you might find yourself with champagne tastes on a beer budget, but you will never know this until you ask.

They will exceed their budget if perceived benefits exceed additional investment – When was the last time that you bought a car that was at or under your original budget? Be honest! That is not to say that some folks don’t have a hard budget that cannot be exceeded. But, for example, does that total acquisition budget dissolve with attractive financing?

Understand their needs, wants, and desires first

In order for you to even approach the topic of budget, you must first understand their needs, wants, desires, and what they hope to accomplish. This includes their expectations. Then, what happens to them if they don’t make this purchase? How will their business be affected? Finally, what aspects of purchasing are most important to them?

  • Are they looking for style … the latest and greatest?
  • Is it functionality that floats their boat?
  • Maybe it’s ease of implementation or speed of delivery?
  • Do they buy on price alone vs. value, quality, or service?

How to ask the big question 

“There are multiple ways that we can provide your services and meet your basic needs. All of these require different levels of investment. Before we go any further, might I ask what you have budgeted for this?

Nothing fancy. Nothing aggressive. Yet, in my experience, most salespeople are uncomfortable with asking this question. Why? Latest statistics have yet to show that any of us have died (salespeople and customers) as a result of this question being asked. However, never fall into the trap of assuming that, budget in hand, all you have to do is meet it!

If needed, throw out a number

Well, we could spend up to x dollars. Would that work for you?” If no, what would?

Be careful! Only use this if ….

  • You have a solid understanding of their needs and your possible solutions.
  • You know that this number will be the upper limit of what they could spend. 

The last thing you want to end up doing is coming back with a final proposal that will exceed this number, unless their needs have changed, and even then they will likely only remember this number. 

True stories

Backfire – I almost got burnt by this once and I was an idiot for getting sucked in. An existing customer called me, told me that they were going to be opening a small chain of mattress stores, and he wanted a sign budget. There are a huge number of variables in electric signs. I got as much information as I could from him.

I knew that this was dangerous and I hemmed and hawed before relenting and throwing out a budgetary number. Naturally, when the time came to design and quote the actual signs, the reality bore little resemblance to what he had told me. He, of course, had no recollection of what we had discussed other than the $ number.

The price was substantially higher and he was quite upset. I got the deal, but only after I suggested that he get competitive quotes. This a very risky move and one I did not want to make. I pointed him to my most expensive competitors and thus managed to dodge the bullet that I had fired at myself. By the way, I was not the low bid. There is no honor in being low bid.

In God’s house – When I was in the commercial  A/V business, we met with the pastor of a church in Twin Falls who wanted to upgrade the chapel’s audio and visual systems. After doing our assessment, we asked about their budget. “We don’t have any budget. We have no idea how much this will be?” The second part was true.

“We could spend up to $100,000. Would that work for you?” “$100,000!? The committee decided that we couldn’t spend over $14,000!”. In the church, in front of God, and from the mouth of his servant.

 

Sales 101 – Qualifying For Budget Part III

Authors note: Please be aware that this blog is being written by a sales person who knows absolutely nothing about marketing. I’m faking it (fake it till you make it) and learning about social media at the same time. Call it “survival instinct” (smile). My hope is that this site may serve to help other sales people in the same boat as I am……struggling to adapt to this new form of networking while at the same time being strangely intrigued (smile). And, it is also about coming to the realization that you either “grow or die”. Right now, I prefer growth (smile). Of course, this could change (smile).

Every now and then, I have the need to clear my mind of all things electronic and marketing and talk about my passion…Selling. After all, no matter what anybody might tell you…..nothing happens until somebody sells something (smile).  This is the third chapter of a series. You may wish to refer to Part I and Part II and, even then, please proceed at your own risk and please do not try this at home (smile).

Qualifying For Budget Part III:  This post will allow us to get to the meat of the matter. How do you effectively ask for somebody’s budget or……..how do you help them to define it. Once again, everybody has a budget.  I might approach the subject in this manner: Continue reading “Sales 101 – Qualifying For Budget Part III”

Sales 101 – Qualifying For Budget Part II

Show me the money! Repeat……Show me the money! (smile). First off, just might be good for all to review “Qualifying For Budget Part I” prior to embarking on the rest of this journey (smile). In the previous post we discussed that everybody has a budget. Today we will discuss:

  1. Why they don’t want you to know what that number is
  2. Why you desperately need to know this information
  3. The benefits for both parties involved

#1 – Why folks don’t want to share their budget Continue reading “Sales 101 – Qualifying For Budget Part II”

Sales 101 – Qualifying For Budget Part I

All this talk about “marketing” is making Craigy cranky (smile). Time to get back to the basics. Time to kick it old school. Time to talk about selling (smile).  So let’s discuss what, in my experience, is one of the probably two most challenging aspects of selling for both inexperienced and experienced sales people……………qualifying. The other would be closing (more on this later as saying that a “sales person can’t close” is largely a misnomer. Fact is….they can’t perform any of the previous selling steps properly)  and they both have to do with money. That dirty little topic that nobody seems to want to bring up (smile). Continue reading “Sales 101 – Qualifying For Budget Part I”