The Hardest Question to Ask in a Sales Meeting - What is your current budget?
Earlier this week in a mastermind with a few local businesses, I shared a strategy I have used for years to close more deals at a higher number.
Sometimes as a coach I forget that as a salesperson I did some really innovative things that helped me, but were really not done by many people in my field. This strategy I used over and over again in settings both over the phone and in person. I can tell you, if you want to have a meaningful conversation about the "budget" the customer has to spend with you, this is it.
Why most salespeople/owners/etc don't ask this question in the meeting or during discovery is because of how uncomfortable it is to talk about money without the context of a product or service. The natural budget conversation had by a business with a fixed price is simple. You sell your widget for $XX.xx and everyone pays the same. This is for the person that sells a variable service. One that has a price that moves, or is dependent on the effort of the team executing the work.
The reason the budget conversation is important for this type of a business is because it helps you identify the level of service you are going to pitch to the prospect. If you pitch at a $100 level to a $1,000 budget, you just left a lot on the table. If you did that to a $10 budget, you just overshot your pitch by a long shot.
Whats the worst case scenario?
Worst case, the prospect takes it as a sales technique and shares that they would like to "hear about your price before sharing a budget." I've even had prospects say this to me with an offended tone as if I asked them to just give me the money upfront.
Whats the best case scenario?
They just give it to you. They say, we want to keep our spending to "this" level. In that event, run with your pitch. If they don't want to share, cause they see it as a sales technique to maximize money (which it is), try this.
Step 1: Call out the elephant in the room (Howdah Approach)
"The only reason people typically avoid sharing the budget with me is because they believe I will only use that to sell you the most amount of (product/service) I can fit into that budget. Is that why you aren't as well?"
After you get the agreement to this issue, you can now solve for this objection. The reason people will agree, even if it is not the exact reason, is because you offered a simple answer they could agree with.
Step 2: Allow them to an alternative
"I don't want you to think that I am here to assess your needs based only on your budget, but what I would like to do is have a conversation where you can feel the budget isn't going to drive my strategy. I am going to take one of my business cards, and write down on the back of it what a typical customer spends with me to solve the same needs you have. Then I'll leave this facedown, so we can talk about the budget you have and your needs a little further. After the conversation, I will show you the number I wrote down and we will start with solutions that fit that number, and work up or down to your budget if we need to. Fair enough?"
This means you are going to write down your starting pitch price. This is something everyone should have before you head into a sales meeting. Every business should have a primary offering, a tip of the spear, a cash and carry option, etc. If you don't have one, reach out to me to get one setup.
Step 3: Write your number and sell it
The most difficult part of this technique is doing it remote. If you are in person, just write the number down and hide it. If you are remote or over the phone, I will offer to do something like text it or email it to that person.
"Normally I would just write this down and hide it under my notebook or computer or something, but since we are remote from one another, I am going to email you the number, and we can start the conversation about budget before it arrives. You will have something from me in a few minutes that validates I am not just selling you based on budget."
When I shared this, people seemed to think it was a unique way to get passed the budget conversation with an actual number they could work on. This technique has helped me write lots of insurance deals, a few car deals, some software needs, and obviously the sales and training needs of lots of small businesses.
Try this out, leave a comment about your results, or let me know if this was a complete bust for you.