Great salespeople know finding the budget is a key piece to winning the order. Price is the monetary value we place on the product or service we sell. It is important to know what our customer is willing to pay for the solution to the problem they are trying to solve. Once you, great salesperson, understand the problem the customer has then get on about finding the budget.
Talking About Money
How do you feel about money? Great salespeople are well within their comfort zone discussing the budget with the customer. They understand the value of their solution to the customer’s problem. And they have the skill to lead the discussion. My mentor, Jim Wilson, would say to a prospect: “At some point we are going to need to talk about money. Why not do it now?” A more sophisticated approach is the one Neil Rackham describes as SPIN Selling. We all know it is better to understand the customer’s budget early in the sales process.
What’s The Value Of Your Offer?
What’s a salesperson to do when the customer thinks the price is too high to pay? Or the customer says: “I can get this for less money from your competitor?” For years I’ve depended on this quote from John Ruskin to guide my discussion in finding the budget:
“It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
John Ruskin was an English philosopher who lived in the late 1800’s. This quote embodies the reason all great salespeople know how to sell the value of their product or service.
Finding The Budget Doesn’t Match The Price
Rarely do great salespeople find a prospect’s expectation of the cost of solving their problem matches exactly the actual price they must pay. When the salesperson knows the prospect is committed to working with them the budget discussion is made rationally. The usual case is the prospect thinks the price is too high. The salesperson has two options in this situation: either change the scope of the offer to match the budget or help the prospect find the additional funding. Occasionally a prospect will acknowledge there is more money in the budget. Then the salesperson can “upsell” to add even more value to the solution. Great salespeople know finding the budget is necessary before moving along the sales process.
Ultimately The Budget Matches The Price
Salespeople understand how to help the buyer realize the difference between price and value. Let’s say you are selling a part to a growing manufacturing company. Their current supplier can’t keep up with their demand so they are looking for a second source. The part you are selling is suitable for the application but it is 10% more expensive than the current supplier because they are only buying a small quantity from you compared to the other guy.
You have agreed to have a guaranteed stock level at all times to meet their demand and you are only one day shipping from the customer compared to three days from the current supplier. All this adds a level of comfort to the buyer. The value added by not running out of the part and shutting down production would exceed the additional cost. Plus you can offer a volume discount for larger order quantities that would reduce the price difference between the buyer’s sources. The key to overcoming the budget difference is to know what value your product or service adds to the customer’s business.
When you have been talking value and benefit compared to the budget all through the selling process then the price objection rarely happens at the close. The best salespeople have nailed down the price expectation before the closing presentation.
What You Can Do Right Now Finding The Budget
- Completely understand the problem first
- Resolve to discuss budget early in the selling process
- Always present value and benefits relative to the budget