Forums: Discussions for entrepreneurs and small business.

Craig,

Sure that happens. It happens all the time. However, when two people enter into a transaction, "ideally", that should be a win-win. If it isn`t. something went wrong. Maybe you should not have even entered into the deal. Sometimes you need to walk away. And, if there were three people competing for that two person transaction, obviously somebody lost. That`s why they call it "sales" and not "order taking" (smile). Nobody wins every deal. Nature of the beast and that very fact is what keeps a lot of people out of the profession. They take it personally. They get insecure. They lower their prices. And when they get the deal, they hate themselves for taking it. Life`s too short my friend (smile).

And.....all some people care about is low price. And if that is all they care about, I generally walk away. There are others out there that appreciate quality, service, "value". And I still have no idea of what this has to do with your budget observation (smile). Tag (smile)

Craig

-------------------------

Craig M. Jamieson
Sales Results LLC
NetWorks! Boise
http://www.networksboise.com
http://www.linkedin.com/in/craigjamieson

Okay...now we`re getting into the crux of the matter. (It took me a long time to figure out what cruxes look like...they`re very fast, crafty, and run like crazy if you see them!) :-)

You`ve created a topic suggesting that asking for budget up front (from the client) is fundamental and critical.

I responded, suggesting it isn`t that easy. How does one increase one`s ability to do that asking? My intent was to uncover the psychological problem in the vendor (seller).

We`ve taken some time, but here we are. "However, when two people enter into a transaction, "ideally", that should be a win-win. If it isn`t. something went wrong."

Yes. But what went wrong? I`m proposing a psychological flaw in one of the persons, often one they`re unaware of in their own makeup. So the solution might have to include making them aware of their own insecurities. How? :-)

O.K. I get it. For example, I sell gift baskets. I go to a referral I`ve received, for a company that is going to have a convention. We meet,and I tell them I have different price ranges, but I need to know what their budget is. They say their budget is $4000 and they need 400 baskets, so I create a few $10 baskets and take them in for them to choose. Simple as that. It would be like me buying a new home. Yes, I would love the one for $800,000, but my budget only allows me one for $300,000. Even if I go an ARM, I won`t be able to afford the payments in 3 years. If you are only alloted x amount, then that`s all you can spend. This is why our government has so many problems approving a budget.

 

-------------------------

kkrafts
"Treat every day as a new adventure"

Great example about what you`d "like" would be the $800K house, but what you can afford is the $300K. :-)

Okie dokie. Let`s look at why we want to get a budget, why it is tough to ask for one, and why our prospect doesn`t want to share that information even though there are benefits involved in so doing:

Why, as a seller, I want to get a budget:

• If I have multiple products or services, I want to match the best one to the expressed budget. More chance of making the sale
• If the prospect wants the $800,000 house but only has $300,000 to spend and there is no way to figure out how to satisfy both needs, I`m likely wasting both our times. However, this is also a qualifying tool. While I want the $800K house maybe a dose of reality brings me to the $300k house
• And once again getting a budget is qualifying. They have told me that they are willing to spend "x" dollars. I might then ask them "If you found a product/service that met both your needs and budget, would there be any reason not to go ahead with it?" This would be considered to be a "trial close" that sets the stage for the actual close later. I might also ask "How will you go about making your decision? Will it be based on price, service, what and, in addition to yourself, will anybody else be involved in the decision? When will you be making your decision? How did you plan on paying for it?" These are all good qualifying and budget related questions.

Why, as a seller, I hesitate to ask for the budget:

• Bringing up money is uncomfortable this early in the game
• They may think I am too pushy
• They may say no (same reason that a lot of sales people have trouble asking for the order period)

Why, as the buyer, I do not want to share budget information:

• I recognize that this is a veiled attempt at a close
• I want to make sure that I am getting the best deal
• If I give them my budget they will use all of it
• I don`t really trust the sales person and they might raise the price on a less expensive product because they know I am willing to spend more
• I am out of my element in dealing with this type of product, really do not know what they cost, and I don`t like this feeling of vulernability. I am ripe to be had (smile)

So, we have a variety of dynamics going on here and all are valid. The sales person needs to feel comfortable asking the question and the buyer needs to feel comnfortable in answering. There needs to be a valid reason for both. Putting it into some sort of perspective, right now as I prepare to launch my new venture, I sell custom manufactured signage. And there are a number of different ways to build a sign using different techniques and materials which will largely affect the end price. As an example, I could provide a basic sign for say $10,000 or another one the same size for $30,000. Diffferent materials, different bells and whistles, different looks but do substantially the same thing.

Here`s how I approach this. And I do it at the end of the first meeting after I have gathered all the information I need. "Mr. Smith, I have to ask you a question that I`m guessing you won`t want to answer. It`s about your budget for this project. Now, you may not want to share this with me because you are afraid that if you give me that figure, I`ll spend all of it, and you are correct. My job is to one, earn your business, and two, to give you as much sign as I possibly can for the amount that you wish to invest. And there are dozens of ways that we can build you this sign. I want to come back to you with a design and a price that you are comfortable with. Therefore, what were you thinking about in terms of dollars?" They are going to answer in one of three ways or a variance thereof:

• My budget is "x"
• Whatever it takes (lying)
• I have no idea of what these cost (may be true but they still have a budget)

Now, if they answer #2 or #3, I`ve been doing this long enough that I have some idea of numbers that I can throw out and I always throw out high. "So, looking at what we have talked about here today, if I were to give you a ballpark figure of say $50,000, would that work for you?" "$50,000!? That`s way too much!". "O.K. then, what number would be more realistic?"

The point is that everybody has a budget even if they do not realize it. Through the years I have become very comfortable asking these questions and getting these answers. And, in my business, I share these budgets with my design and estimating departments and they keep these numbers in mind when they draw up the signs and estimate them. And, thankfully, they are very good at giving me something to take to the customer that looks the way they want and costs the price they expected to pay. A win-win (smile)

Thanks!

Craig

-------------------------

Craig M. Jamieson
Sales Results LLC
NetWorks! Boise
http://www.networksboise.com
http://www.linkedin.com/in/craigjamieson

Karen,

Yes. You have it (smile). And you are also right about the government yet...they can always print more money (smile). I think that with practice you will become very comfortable with this and also successful. Of course, there is a lot more involved like what they expect for that $10 and why they would spend it with you an on your product vs brand "x" but getting that budget is a huge step in the right direction.

Thanks!

Craig

 

-------------------------

Craig M. Jamieson
Sales Results LLC
NetWorks! Boise
http://www.networksboise.com
http://www.linkedin.com/in/craigjamieson

That was a really superb article! And the summary at the bottom clarifies everything.

Yes, it`s all about learning to become comfortable with asking about money and numbers, but by using the principles in this article, that`s the way to do it. *Learning* to become comfortable is a process. We don`t just happen to be comfortable based on nothing.

Well done :-D

Craig,

Thanks! Oh, and the pastor that lied to me about not having a budget......he ended up spending $15,000. He low balled me when he finally told me $10,000 (smile). Hoever, as I have said before, people will very often exceed their budget given enough benefits to do so.

Thanks!

Craig

-------------------------

Craig M. Jamieson
Sales Results LLC
NetWorks! Boise
http://www.networksboise.com
http://www.linkedin.com/in/craigjamieson

When someone asks me (with no other qualifying information): "How much does it cost to make a video?", I reply, "A Million dollars".

When they realize that I wasn`t joking, I tell them that if we don`t need Tom Cruz and the exploding Mazarattis for their video then we can drop the price substantially.  The point being that the video product that I produce depends solely on what they are planning to spend.  So we start with the million dollar video and  remove the costly items until we`re  down to $5-20,000.  Then we`re in the same ballpark.


-------------------------

Steve Mann
Internet Videographer
MannMade Digital Video
My Email

Salesdude... You have created a good sales tactic to assess not only the amount of work you wan to put into a perspective client, but you have also found a way to force the perspective client to think realistically.

When I start out to buy something I know little about (ie. Price, Installation Process, Typical commission fees ect.) I often have an unrealistic view of the amount I can spend in order to achieve a specific level of expectation. My expectation could be completely unrealistic. This causes a problem for the sales person. They have the difficult job of bursting the client’s bubble.

In general, I am the one people are trying to get a budget from. I have learned it’s actually more effective for me to state a dollar amount I hope to spend upfront. Instead of wasting time, I use my “I don’t know anything” attitude to my advantage.

Example. Let’s say I am interested in purchasing product or services I know little about. I can find out basic fees in most situations by making an internet search… but that doesn’t always work. I will approach the sales aspect like this…

[speaking to the sales person] “I am interested in doing this [provide example]. I am don’t know much about the costs involved or process. I would love to solve everything for about $xxx (Typically the dollar value is a number I feel comfortable with, but may not be the potential of funds available… because like you said, it’s about feeling or seeing the value to spend more.)

Then I listen to their thoughts on components, process or whatever education they decide to provide. I also use this method when I am very knowledgeable about the subject matter. I let the sales rep talk. Tell me why they think I should buy a specific model or accept a specific service contract.

By the time I do this with three sales reps for a specific task, I can typically see through the individuals who are “selling” VS know their product or service and represent it. Once the sales rep has had a chance to give info, I will then present questions, concerns and specifics.

Sometimes I have had my problem solved for slightly less than I originally suggested. Mostly I end up paying a little more, but that’s ok, because the sales rep did their job right. They built value into components I didn’t see valuable. That makes me happy to spend the money.

Even if I don’t reveal an entire budget figure, I do see the importance to state a budget. It immediately opens conversations of expectations and eventually settles on cost equaling fulfilled expectations.



-------------------------

Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words