Why Asking About Your Prospect's Budget Can be Bad for Business

This article just went out yesterday in my newsletter. Many of you don't even know that I publish something other than this blog. But I do. And, I share lots of sales resources and events there too.

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Should You Ask, "What's Your Budget?"

Shortly after my last newsletter went out, I got an email from Lauren. She liked my article, but was frustrated because she couldn't easily Tweet about it. Now that may not be one bit important to you, but check out what happened next.

Lauren's email continued: Unless I'm missing something, you don't have that capability enabled which I'm *very *surprised about. You are considering social networks when doing this, right? If not, we're more than open to speak with you about how we could help you.

I was impressed. She'd spotted a potential opportunity for her business and immediately followed up on it. Plus, her message made it clear that I was lagging behind where I should have been.

The only thing she didn't know was if it was important to me. It was. I wrote back:

Thanks for your note! And, I am guilty as charged. My email service provider does have social media capabilities, but I haven't started using them yet. It's time to get on it!

I also need to get my blog social media friendly. I don't have anyone working on that right now. It's a small project, but a necessary one. Interested?

Of course, she was. She asked, "What's your budget for this?"

That's exactly what traditional sales training tells you to ask. To find out if you're dealing with a qualified buyer, you're supposed make sure they have money in their budget for your product or service.

It was the wrong question to ask! Click here to continue reading.

Comments

[Cynthia Kondratieff]

Appreciated the article – it made me think.

And I realized that I’ve learnt to ask the budget it question in a slightly different way, depending on whether I made the first contact – or the prospect did. I usually ask either “Did you have a budget in mind for this?” Or “What kind of a budget did you have in mind for this?”

This could lead to a yes / no answer ... Or a number, or ‘I didn’t’ ...

But lots of times, even when a client has a budget in mind, they don’t want to tell you. Judging from my own motivation, they are hoping that the price you name will be less than they thought it would be.

So sometimes I start with – or follow up with – a statement like: “Depending on what we do [what you need], the range could be either A to B or C to D. [ I usually include a short description.] Does either of those make sense for what you had in mind?”

[Chris Zdunich]

I won't go into detail, but budget needs to be discussed after you know what product or service you will most likely provide. This is fair to both parties.

Knowing each other's budget range will help both of you decide if you want to move forward or not. It also establishes a basis for further discussion on other possiblities.

You do not want to take the time to develop, prepare and present a proposal to find out that your pricing just blew them out of the water.

[Alan Allard]

It's good that Lauren was confident enough to ask about budget issues.

Not so good that her timing was way off.

She didn't pace you at all. She assumed you had the information to make a decision at that point.

She failed to listen to you. Your e-mail reply told her you hadn't given serious consideration to the matter up to that point.

It also told her that you were willing to have a conversation about it.

She could have asked intelligent questions to discover where you were, what you needed to take another logical step, ask more questions, and so on.

When it comes to asking the budget question, timing is everything.

[Jill Konrath]

Thanks Cynthia, Alan & Chris. I appreciate you adding your insights to the discussion. My goal in writing the article was to make people think. Too often we're just on cruise control in our sales and don't even consider options.

I absolutely do believe in talking about budget. But at the earlier stages, this might be in the form of education instead of an open-ended question.

Case in point: When my husband bought me my diamond engagement ring, we'd decided to spend X amount. However, after the good jeweler educated us about the four F's and how to tell a quality diamond, we ended up spending twice as much.

So had the jeweler asked our budget initially, he would have gotten a much smaller sale. Again, the key is WHEN to pop the question and HOW you do it versus IF you do it.

But that requires thinking and too many of us are on autopilot!

[Alan Fendrich]

Jill,

Good point for sure.

So often we go on autopilot, we're just plain tired from grinding out prospecting calls or (and I'm afraid this is all too common) we've got the wrong person doing our calling for us.

Elegance in selling is something that comes naturally to some (don't try to get the money before you really have rapport), but to most it is difficult.

Your point is well taken.

All the best!

[David James]

The budget question is even more tricky today, especially with the newer generations who are much more computer literate coming into positions of decision-making ability.

All too often the client is convinced that whatever the product or service, they "can get it cheaper" online or overseas. This really makes the budget question very tricky.

Too often the client thinks the product or service should or will cost almost nothing, or be free someplace online. The result, if it is an important project, the buyer will search about, otherwise, it generally gets put way down on the "to do" list.

This attitude can especially tricky with products and services that appear the same in name but the end result of the cheaper alternative looks and acts like a Yugo.

Too often clients don't really think about the impact that a low quality solution has on them. This includes wasted money, time, resources and, of course, opportunities.