Home Business Magazine February 2012 : Page 48
MARKETING & SALES How to Close Sales That Are Over the Budget Avoid the Trap of Selling to the Budget By, Landy Chase, MBA, CSP I t never ceases to amaze me how many business people assume that a budget dictates what the buyer can spend. In my experience, this is almost never the case. The truth is that in most cases, budgets are guidelines, and nothing more than that. Additionally, they are sometimes based on a flawed or limited understanding on the part of the buying party of what is actually required. Of course, most sales people fall into the trap of selling to the budget. They build their entire proposal around this number. They assume that their recommendation must conform strictly to, or be below, the budget threshold. They ignore the issue of value. They don’t take the time to find out what the customer is actually trying to accomplish, and they miss opportunities to both increase sales and serve their customers better. It is worth noting, also, that budgets are often the domains of people who do not have final approval authority. In other words, when a person tells you, “My budget is $,” this statement usually means “I have been given permission to spend no more than $.” This tells you that you are talking to a person who is not a decision-maker. The real question here is this: Who gave the permission? The person who approved the budget is the one who buys based on value — and isn’t limited to the budget number. Before you “ assume that you are constrained by a budget, you must first determine if the person that you are talking to is the “right” person. TALKING TO THE “RIGHT” PERSON Influencers spend based on what they are allowed to buy. Decision-makers get whatever they want. Put another way, if your decision-makers decide that 48 Home Business ® ” they need what you are recommending, they will simply purchase it. This is an important point. Before you assume that you are constrained by a budget, you must first determine if the person that you are talking to is the “right” person. Assuming that he/she Most sales people don’t take the time to find out what is, this doesn’t mean that the customer is actually trying to accomplish, and they you should ignore a budget miss opportunities to both increase sales and serve their number. Instead, look at it customers better. as a guideline. However, remember that when we try to put together proposals that meet a budget.” Since we are ignoring the price pre-determined amount, we usually end issue here, this option should contain up proposing something that is less than a much higher level of value than the what the client would be best served by budget-based one. purchasing. For this reason, budgets are ■ Option B should stand out on its merit. an obstacle to both the buyer and the This option needs to maximize perceived seller. The seller is constrained by a ceiling value. It must be a perfect fit for what the of expenditure, but more importantly, the buyer needs. purchaser is limited to getting a solution Follow this process consistently, and that is probably less than ideal. you will consistently close sales that exceed budget numbers. This happens because the buyer realizes, after reviewing EXECUTING A THOROUGH NEEDS ANALYSIS How to get around this issue? The key both options, that what they need, and skill here is to execute a thorough needs what they initially planned to spend, are analysis. The more that you know about not in sync with one another. They will the needs of your client, the better you will immediately discard Option A, and will be prepared to deal with the budget issue. focus their negotiation discussion on the You must get on the buyer’s side of the Option B that fulfills their requirements. table and look at the decision from their Of course, it is a moot point that you point of view. Once you have completed this key step, must be selling to decision-makers for and are ready to prepare a proposal, the this method to be effective. Assuming following method is a highly effective way that you are, you will find that they often select the recommendation that is the to sell around budget constraints: best fit for their needs — which is the higher-priced option. And if they don’t, PREPARING TWO SELLING OPTIONS Option A is based on the client’s so what? Your plan “A” — the proposal that matches the budget — becomes the budget. Option B is based solely on addressing fall-back option. So you have nothing to the client’s specific needs, and therefore lose, and everything to gain. What are you waiting for? Make this a permanent part disregards the budget. of your proposal strategy. ■ At your proposal meeting, begin with Option A. Say, “Here is what we can do for you, based on what you want to Landy Chase, MBA, CSP is an expert who specializes in speaking to corporations and associations on professional selling and sales management spend.” Review this with the buyer first. topics. His latest book, Competitive Selling, was named an Editor’s Choice Best Books of 2010 selection and is available on www.amazon.com .To book ■ Next, present Option B. Say, “Now, here for your next sales meeting, visit his website at www.sellingrevolution.com is the best possible solution for what Landy or call (800) 370-8026. you want, but this option ignores your www. homebusinessmag.com | January/February 2012
Close Sales That Are Over Budget
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