No Budget, No Worries

When you find out that your prospect doesn’t have a budget for the type of product or service you sell, should you walk away or keep pursuing?

Many salespeople will mark that account unqualified and move on. Their experience has shown that even if a lower level person is interested, any proposal will eventually get shot down higher up the chain.

But is it possible that they’re closing the door too soon? That not having a budget not only should NOT be a disqualifier, but it might even be advantageous?

Here’s the reasoning:

Budgets are guesstimates 

We all know budgets aren’t all they’re cracked up to be. They are merely guesstimates (some well-researched, but many not), made 3-6 months before the start of the new fiscal year, of what will be needed, what the priorities for investment will be.

And we all know how hard it is to predict the future. Life happens. The world doesn’t stand still. Markets change. Competitors rise (and fall). Things come up that weren’t anticipated when the budget was produced. How many businesses were prepared for the effects of COVID, supply chain issues or inflation? Businesses had to react. They had to pivot.

It happens in our personal lives, too. Most homeowners don’t allocate special funds for car or home repair. But when something needs urgent fixing, the money is spent to get it fixed.

Other times, the problem is something you didn’t notice. Perhaps a friend sees a discoloration on your ceiling and asks you if you have a leak. You never saw it and now you can’t un-see it. It weighs on your mind. No monies were budgeted for repair, but now it’s a priority.

Businesses are no different. The problem wasn’t recognized when budgets were made last year but now it is. Or, a good salesperson (hint, hint) uncovers a problem that no one noticed and helps the prospect add up the hidden costs.

And, when your solution costs less than what the problem is costing them, your solution becomes self-funding. The solution pays for itself.

In other words, if the need is strong enough, if the right person wants it bad enough, if they realize it’s costing them money to ignore the problem, then you have an excellent chance of making a sale. You should pursue it.

A few years back, a CEO saw a need for some customized sales training. He talked to a client of mine who told him to contact me. The CEO liked what he heard and we did the training. There was no budget for this, but they paid it in full. How? He told the CFO to pull money from their marketing budget. The CEO felt they’d get a better return on their investment from my class than from the marketing activities they had planned. Done. My client pivoted to a higher priority.

Priorities beat budgets 

Priorities beat budgets.

And that’s why lack of a budget doesn’t concern me. Because if I can find something that causes them to pivot, not having a budget won’t matter. That doesn’t mean it won’t take work. But it also means you may not have to deal with competition or having your margins squeezed.

It’s an advanced skill, but all it takes is having the right process and practice to pull it off.

One last thing on budgets… Even when you find out your prospect does have a budget for what you sell, that’s no panacea. They may not have allocated enough to actually solve the problem. And just because it’s budgeted doesn’t mean it will actually get spent. Spending gets frozen all the time. Or, reallocated elsewhere.

Where does money get spent? On priorities, emergencies, no-brainers, and things that pay for themselves quickly.

When your solution fits into one of those categories, the lack of a budget doesn’t really matter. And if it doesn’t fit in one of those categories, then having a budget won’t help you land the deal. You can easily get beat out by a stronger priority.

Priorities beat budgets.

Next week: What to do when your solution exceeds their budget.

Have a great weekend!

Bob