Qualifying your prospect’s budget can be very difficult for any salesperson. It is often done at the wrong time in the wrong way, and it can end a relationship with a prospect.
Typically we want to get the budget qualification over and done with, so we generally look to get straight to the point by asking “Do you have a specific budget available for this?” By being so direct, you run the risk of turning off the prospect, getting incorrect information or starting a conversation about price before having the opportunity to establish value.
There are parts of qualifying that will require a more direct approach, like finding out the decision making process. But a softer approach is needed for qualifying budget; it is a more sensitive topic for prospects.
There are a number of ways that talking about budget too soon could cause problems with your prospect.
Scare the buyer
Prospects may not have any budget allocated to a solution. They may not have decided on a solution yet. They may not even be aware that they have a problem. An upfront budget qualification might startle the prospect, why would they have a budget allocated if they don’t know that they have a problem? An upfront budget question is likely to scare the prospect away.
You reference wasting time
If you say to a prospect that you don’t want to waste their time while asking them if they have a budget to spend on your solution, you may come across rude and greedy. It can be easily interpreted that you don’t want to waste your time talking to them unless they have money available to spend with you.
Make up a budget
A prospect might like what they hear about your solution; they might be interested in it and can see the benefit. But they may not have an actual budget available, just yet. Again they may not even know that they have a problem. So rather than letting the conversation end, they may invent a budget to keep the conversation going.
Negotiating too early
Asking a budget question early in the conversation may cause an early negotiation. You may find yourself defending your price without having had the opportunity to sell the benefits and differentiators of your solution.
Here is a simple process to qualify on a budget:
1 – Future impact
Does your solution help the prospect grow their business, save money or avoid a potential problem later? Can you quantify what the upside of your solution is? Once you understand the monetary value of your solution to a buyer, you are able to paint a clear picture of how much the prospect could potentially gain or lose.
2 – Current spend
If the prospect is currently using a product or service, you can ask them how much they’re spending on the current solution. This gives you a benchmark of what is in their budget and work out how much they can spend to fix the problem. Asking “what solutions have you tried in the past?” and “How much was it?” finishing with “Did you get a return on investment from it?”
Understanding their current spend, along with their future impact, is an ideal way to start to pull a plan together.
3 -Build a better plan
Armed with future impact and current spend, you can build a better plan to achieve their goals. Asking “If I can help you with your goal, what would you be willing to invest?” If your solution can be tailored to your prospect’s budget and goal, you can have a well-informed conversation about the benefits of your solution.
We understand the demand for quality leads and the need for your team to meet those demands. We are here to help and add value by finding tangible, highly qualified leads where we have secured a date and a time for an appointment. These individuals are in your target audience, at the right decision-making level and have an interest in your solution. Taking away this pressure from your Sales team allows them to focus their time on closing deals and generating revenue.