One of the biggest differentiators between good and great salespeople is the ability to have a comfortable budget discussion with a prospect.
The most important advice I can offer a salesperson is to never be afraid to discuss money with a prospect. Salespeople who live in fear of having a budget conversation will struggle to be successful in a role responsible for generating company revenue.
It is important to understand that a budget discussion should be an ongoing part of the sales process. It should not be a one-time conversation that a salesperson puts off until five or six conversations into the sales process.
For sales managers, here is how you should be evaluating your sales team if they are struggling with budget discussions.
Two Types of People Who Resist the Budget Discussion
The two people who are uncomfortable with a budget conversation are weak salespeople who have not done their job well and prospects who are not involved in the decision-making process.
- On the salesperson side of the equation, there is a lack of preparation. When the salesperson is uncomfortable starting the budget conversation, they are either not confident in the solution they are trying to sell or have not completed the discovery phase to analyze the value and impact their solution can provide to the client.
It is imperative that the salesperson deliver a solution to the pain or opportunity that the prospect is facing. Otherwise, the salesperson will not be empowered to discuss budget because they do not have a full grasp of the prospect’s actual need and the financial or business impact of making a decision to purchase.
- On the customer side, individuals who dread the budget discussion are often times not involved in the final purchasing decision. If the sales team encounters a prospect who becomes uncomfortable with a budget discussion, it’s usually a sign that they do not have purchasing power.
Also, this type of prospect will not understand the value your solution can provide the company because they do not have all of the information that higher-level managers are looking at. If you have built a reasonable business case for your solution and you hear a response such as “We would never pay that!” or “That will never be approved!” you are likely not selling to the appropriate level of the organization for this decision to be made.
At this point, the salesperson needs to shift gears to asking who they should be discussing the solution with, while also keeping the prospect looped in as your internal advocate.
When is the Right Time to Discuss Budget?
The budget discussion should be part of ongoing conversations with a prospect. But, a salesperson should not start the conversation too soon.
There is an appropriate time to have a budget conversation. When a salesperson comes in too early with the price or asks budget questions before the prospect understands the value proposition, then you are setting up for failure.
The key to knowing the right time to discuss budget is being prepared. This means understanding the value of your solution to the prospect and being aware when you have uncovered a pain point.
When the salesperson has uncovered a pain point, it is important to capitalize by helping the prospect understand how your solution will cost the company less money in the long run than their current problem is costing them. The salesperson should not hesitate to have a budget conversation at this point because the prospect has been informed about the cost-saving benefits.
However, if a weak salesperson were to wait until the very end of the sales process to have a budget discussion, they risk losing the opportunity. Once the pain point has been uncovered, budget should become part of ongoing conversations.
For example, if you are selling a $50,000 solution and the prospect is losing $100,000 because of their existing problem, then the salesperson can sell a positive impact on the company by explaining the cost benefits. Then, the prospect can decide whether that $50,000 investment is the best use of resources at the moment.
If the prospect is not convinced that your solution would make a big enough impact, though, then go back to the drawing board to come up with an alternative solution. Your sales team already unlocked the pain point and presented the financial benefits, so use that information and the previous research to find a way to make a more significant impact on the business.
The alternative solution could be presenting a long-term view of saving the company $1.0 million over the next 5-10 years. The key is continuing to have those budget discussions as an ongoing part of the sales process.
Money is Not Always the Biggest Pain Point
One of the biggest traps for salespeople is believing the only pain point for a prospect is related to saving or making money. It’s challenging to remember that budget is not always the biggest driver in the decision to purchase.
What happens is a salesperson is hesitant to discuss budget because they’re not sure if the return on investment for their solution is enough for the prospect. But, in reality, the real pain point might be that the CEO or another higher-level manager does not like the way the company is operating right now and they want to see change.
If the sales team is only thinking about dollars and cents, then they might miss an opportunity to sell the solution based on solving the company’s biggest problem, which is unrelated to budget.
Sometimes the ROI is not about money, but about fixing a problem or capitalizing on an opportunity that is not directly financially related. Salespeople should not make the assumption that decision-makers are only making a purchasing decision based on financial impact.
That’s why the discovery phase is important to uncover the real pain point by asking these four questions:
- Why are they considering this solution?
- What do they think the impact will be on their business?
- Who will the solution impact the most in the organization?
- How will the solution change the way they do business if they implement it?
The answers to some of these questions will relate to bottom line impact of increasing revenue or saving costs. But, other times, the prospect is thinking about things like improving customer service or changing the employee experience to retain quality workers.
Budget is an important agenda item as you try to sell your solution. But, it is not simply one step in the process. Salespeople need to approach the budget discussion as a part of ongoing conversations. This mindset will lead to more success converting prospects into customers.
To learn more about how ProSales Connection can connect your company with real prospects, contact me directly about our limited time No-Risk Appointment Setting Program to have a conversation about a solution that fits your need.