Sales Lead Qualification: Asking the Budget Question
By Al Davidson
The Most Common Lead Generation Mistake: Asking The Budget Question
There is going to come a time when budget will come into play during the sales process. But the way you approach this question can mean the difference between a successful sale and a bad reputation. Play your cards right, you could turn this one sale into repeat business. Mess it up, and a scared or put-out prospect can spread the word around faster than you can dial the phone.
Although you are going to eventually ask some sort of budget question, it is important to understand the dangers in pursuing this information. If you don’t ask the question in just the right way and at just the right time you will moist likely create negative energy between you and the decision maker. When this happens you risk getting bad (or no information at all) thus your sale is about to veer off the road. My advice? Never ask "Do you have budget for this purchase?"
Sure, that's the question you want answered. But this is not the way to find that information. It is the way to shut down the process quickly. The prospect may say no when in fact he does have a budget because he thinks you are prying in to his personal information. Then again, he may say yes and tell you a low ball figure because he doesn’t like the way you do business. Some people are going to take this question to mean "how much can I possibly charge you for this before you'll run?"
Asking the question at the wrong stage of your sales cycle can be the kiss of death. Believe or not many sales people ask this question during lead generation (see the previous article about qualification questions). The earlier you ask this question the more dangerous your path becomes. You don't meet someone at a party and say "Hi, Jeff, nice to meet you. I'm Bob. So, what's your net worth?" It's not acceptable in a business environment, either.
Asking this question the wrong way is just like sticking your hand in the prospect's wallet. Although we would all like to do that…there are smarter ways to get to the same place. (And you can do it without getting thrown out of the decision makers office.)
Getting at the budget in a sale is an art form…it requires a lot of finesse. The real trick is getting the prospect to GIVE you the information you're looking for without having to ask for it. First, by leading off with questions that show you're concerned with their best interests. Then show them how you can help solve their problems. Finally, provide a basic cost-benefit scenario and leave it to them to tell you if the can afford it. You don't even have to ask if the "have enough money."
The concept of budget is usually best introduced in the context of ROI. Don't ask if they can afford it. Show them how they CAN afford it. For example: "Our solution can save help you reduce your payroll by x and also give you more capacity and faster processing. This means that you can save X during the next 12 months…the cost of our solution is Y…would a return on your investment of Z be a good fit for you? If so, then we might have just the solution you're looking for.
Again, you aren't ASKING them for money, you're SHOWING them how much money they can save/make with your product or service, as well as how you are going to solve their problem(s) at the same time.
About the Author:
Al Davidson is the President and owner of Strategic Sales & Marketing (SSM), which he founded in 1989. Under Al's direction SSM has designed and implemented new business development plans and programs for thousands of B2B companies nationwide. Since their inception SSM's calling center has completed over 50 million cold calls to high level business decision makers and generated over 7 million sales leads.
