Friday, April 9, 2010

Why asking "What's your budget?" can hurt your sales

Shortly after my last newsletter went out, I got an email from Lauren. She liked my article, but was frustrated because she couldn't easily Tweet about it. Now that may not be one bit important to you, but check out what happened next.

Lauren's email continued: Unless I'm missing something, you don't have that capability enabled which I'm *very* surprised about. You are considering social networks when doing this, right? If not, we're more than open to speak with you about how we could help you.

I was impressed. She'd spotted a potential opportunity for her business and immediately followed up on it. Plus, her message made it clear that I was lagging behind where I should have been.

The only thing she didn't know was if it was important to me. It was. I wrote back:

Thanks for your note! And, I am guilty as charged. My email service provider does have social media capabilities, but I haven't started using them yet. It's time to get on it!

I also need to get my blog social media friendly. I don't have anyone working on that right now. It's a small project, but a necessary one. Interested?

Of course, she was. She asked, "What's your budget for this?"

That's exactly what traditional sales training tells you to ask. To find out if you're dealing with a qualified buyer, you're supposed make sure they have money in their budget for your product or service.

It was the wrong question to ask!

Suddenly all the progress Lauren was making came to a screeching halt. I didn't have any money in the budget. Nor could I respond intelligently to her question since I didn't have a clue how much time and effort it took to accomplish the task.

Yet I was a qualified buyer. I had money to spend; it just wasn't allocated to improving my social media presence.

When I told Lauren I was stumped, she was surprised at my reaction. After all, it was a fair question to ask from her perspective. Knowing my budget, she could propose a solution that would fit within it.

But in the end, that wouldn't be the right thing - for her or me.

Still confused? Let's say your car is making some worrisome noises. One day in the parking lot, an automotive specialist hears it and approaches you.

He says, "Your car is really idling roughly. With the way it's sounding, I'm not sure if you'll make it to your business meetings next week. Have you thought about getting it fixed?"

Of course, this captures your attention. You respond, "Yeah, I am a little worried. What's happening? What are your thoughts?"

He asks, "What's your budget?"

Is that really what you want to hear?

Of course not. You don't know what's wrong. You don't know how much parts and labor cost. You just want the darn thing running so you can work.

And even if you don't have any money in the budget, you'll find some if it's important.

You'd much rather hear him say, "Mmm. Let me take a better look and give you a recommendation. I'll need to ask you some questions."

Then I bet you'd love him to come back to you with a couple of options. The first one would show you what it would take to solve the immediate problem, while the second would focus on upcoming needs or additional ideas.

Here's the deal.

The "What's your budget?" question only works for planned purchases.

When Lauren contacted me, I was interested. And, I was willing to spend the money if I felt it was a good business decision.

That's just like the 90% or more of the prospects you deal with on a regular basis. They still haven't decided if they're going to change from their status quo. They don't have money in the budget for new investments.

In short, they haven't yet made that critical Second Decision that I describe in my new book, SNAP Selling.

How you deal with prospects who've already decided to change is fundamentally different from how you deal with those who could be tempted, but haven't yet committed to taking action. Remember that next time you're worried about the budget!

Jill Konrath, author of Selling to Big Companies and founder of the Sales Shebang, is a frequent speaker at national sales meetings and industry events. For more articles like this, visit www.SellingtoBigCompanies.com. Sign up for the newsletter and get a bonus Sales Call Planning Guide.

No comments: