Dealing with Budget

It seems like every salesperson I run into lately asks me how to handle budget objections. Creating a sense of value with your customer is indeed an art form, but here are a few tips to help you tighten up your discussion about money.

1) You MUST determine if it makes financial sense for your prospect to purchase what you sell before you submit a proposal. Prospects are smart. When they see an opportunity to invest intelligently, they often do. But they hate to be sold when an investment doesn't make sense. If you can't figure out if it makes financial sense for a prospect to purchase your product, then they probably won't either.

2) Clearly you need the prospect to share a range that they are willing to spend. But you also need to understand their ability to spend. Gone are the days of a quick bank loan or VC funding to obtain some spending money. It's the salesperson's responsibility to understand how the purchase will be financed and where the funds are coming from. Salespeople look at me cross-eyed when I tell them this for the first time. However, it just takes one deal when the bank or board "didn’t approve us" to make a salesperson realize they just wasted hours (or days) on a proposal that should have been structured differently or discussed with different key decision influencers.

3) Have a specific place in your selling system to discuss money. It's certainly not at the beginning but don't wait until the proposal to disclose fees. The proposal should be anticlimactic, not a time to disclose surprises. A systematic process takes a lot of pressure off the salesperson too.

Unfortunately, selling isn't like tennis. You only get one chance to get it right. Once the prospect gets your proposal, the selling is over. Sophisticated buyers will give salespeople a second chance but even they do that to squeeze the seller on price. In this economic environment, it makes sense to handle the money issues up-front and only submit proposals that will win the business.

This article was contributed by Chip Doyle of the Sandler Sales Institute.