By Jim Kasper
If you've been in sales for any length of time, you've heard this one. It really hurts when you've expended a lot of time and effort. This Sales trainer shows you how to respond, and, more importantly, how to avoid this classic objection in the first place.
It's a recurring theme these days. You know the "drill." You've done your homework, the prospect likes what you're offering, and after all of your hard work, you see yourself walking out with an ....order! You're ready to close. Then you hear the dreaded, "I really like what I see, but I just don't have the budget."
The typical responses to this statement are:
- You say, "O.K., Ms. Prospect, I'll check back with you later?" Then you leave.
- You handle it as any other objection by paraphrasing, clarifying, and restating the benefits.
- You realize that the prospect truly doesn't have the money.
- Relying on your keen instincts and superlative sales abilities you continually try to close, irritating the prospect who calls security to have your carcass escorted to the parking lot.
Of the above responses, only one would be deemed proper. There are times when the customer really does not have a budget. The reasons for this may be:
- The customer may be too small to afford your services.
- It may be the end of the budget or fiscal year.
- Business may be particularly slow.
- Business may be good, but cash flow is slow.
- The company is cutting expenses to appease the "analysts."
How do you determine if these are legitimate reasons when they come from your customer's mouth? You always ask open-ended questions about these topics as part of the normal fact-finding mission in your sales interview. By doing this, you bring out budgetary restraints at the beginning of the sales cycle, not the end. Preface your questions with the statement, "Mr. Prospect, I have a few background questions to ask you that will help us determine the most effective way to proceed." Then, ask:
"Tell me about your fiscal year."
"How has business been lately?"
"What type of seasonality do you experience?"
"What was the last time you made this type of [product / service] purchase? How did it go?"
In other words, predetermine the fiscal condition of your prospect or customer before he or she uses one of these conditions as an objection. Like a good tailor, you've got to "size them up."
Upon hearing, "It's not in my budget," consider the following to sell your prospect:
Establish a financial proposition
A temporary personnel placement agency, specializing in the insurance industry, was approached by an insurance trade association to sponsor a member educational program. Although the association was a prime target for prospects, the cost of the program was thousands of dollars more than the firm expected. The small firm did not have the budget. How did the association close the deal?
The insurance association representative asked the placement agency owner how many dollars the average insurance association member spent with the placement agency annually. Then the association representative figured it would only take three new customers to pay back the sponsorship fee. Next, the association representative helped the agency develop a plan to obtain six new customers by sponsoring the event.
Be a budget planner
In January, a large financial services organization solicited proposals from several sales training firms. When the successful proposal was identified, their CFO realized the cost of the training was more than remained in the training budget for the fiscal year. The fiscal budget started in June. What did the successful sales training company do to close the financial institution?
Realizing that the "not in my budget" was legitimate; the training company agreed to aid the financial institution in planning its next fiscal year's training budget. The training company literally became a planning partner with the financial organization.
"I guarantee it."
In today's fiercely competitive market, sometimes prospects play the "It's not in my budget" card just to see what concessions they can get out of the deal. When appropriate, and when you know who you're doing business with, try the guarantee approach. Many companies offer a performance guarantee to their customers calling for a product or service to meet a certain benchmark by a specific date.
Here's an example. Recently, we were asked to make a training proposal to a major electronic manufacturing firm. During the initial interview, the firm said that the training was not budgeted and they were looking for some creative approaches to "sell" the program to senior management. We then offered a guarantee - within 60 days, the program was to provide a specific R.O.I. If that R.O.I was not met, the cost of the program would then be refunded. When presented with that solution, management promptly allocated the funds.
Keep these suggestions in mind when you are presented with the "no budget" response:
- Never, ever automatically offer a price concession.
- Don't instinctively accept the response at face value; always probe for the "hidden" reasons.
- Ask yourself, "Can they really afford what I'm selling?"
- Ask the prospect, "What are your future plans to buy?"
- Ask yourself, "How badly do I want this business? When? At what cost?"
Following these guidelines will give you insight on your next step and help you determine whether to pursue the opportunity or withdraw and head down the road to your next prospect.