How Soon Is Too Soon To Ask Your Sales Prospect About Their Budget?
A common practice here at AG when speaking with prospects and uncovering qualified opportunities is to ask questions surrounding the budget process. A client asked a very interesting question regarding this aspect of our process last week which really got me thinking. She asked whether or not questions surrounding budget were the right ones to ask so early on in the sales process (meaning the first live conversation with a prospect). This was a very good point, and I think the best way to answer it is to say that if you ask budget questions in a certain, non-intrusive way, they are appropriate to bring up during initial conversations. The main reason not to avoid budget questions altogether during early conversations is because you need to determine right away if the prospect has an active project, or at least a project that is occurring within the next 12 months. If the project is budgeted for 2 years out, it’s best that your inside rep holds on to the lead and nurtures it instead of passing it over to the outside sales team. If a lead is passed over to an outside sales rep without getting an idea of when budget might be available, the opportunity won’t be as qualified or as active as the rep would like it to be.
The key to approaching budget during an initial phone conversation is to focus on painting a picture surrounding the organization’s overall budgeting process, instead of running down a list of targeted questions that make your reps sound scripted. If questions are read down a list, the prospect may feel less comfortable about sharing financial information with them. If you follow the guidelines below, you and your inside sales team can feel confident that it is not too soon to ask about budget during an initial call with a prospect:
- Provide your inside sales team with a list of potential questions but don’t leave it at that – role play with them and share with them how to work the questions into a business conversation. For instance, a question you provide for them might be, “Has there been budget approved for a project like this?” After giving them this question, explain how to tie it into the specific conversations they are having. For example, “Mr. Prospect, you mentioned you would like to have a new solution in place by Q2 of 2012 to address your needs to XYZ. With that said, has budget already been approved for this project?”
- Be confident. I always recommend being confident and direct with prospects when qualifying them – especially when it comes to asking tough questions surrounding the budget process. It’s important that your inside team does not get nervous and that they don’t back down when asking these sensitive questions – the worst that can happen is that the prospect says “I don’t feel comfortable sharing that information with you at this time.” In 5 years of making calls, I have heard this response only once.
- Be honest. Have your inside team inform prospects that they are asking these questions so that the specialist/outside rep from their end following up will have a better idea of their business prior to the first meeting to make the best use of everyone’s time. They will appreciate the honesty and historically, there have been few situations where prospects won’t share this information. If they get defensive, it might be a sign that their interest level isn’t that high to begin with.
Some feel that asking about budget during an initial cold call is too soon. I do believe this is true in some cases – like for companies that are just looking to get in front of potential prospects even if they don’t have an active project in place for example. By asking budget questions early on though, you can determine whether or not the prospect is truly interested in purchasing or if they are simply open to hearing a sales pitch if a project were to come up down the road.
What’s your opinion on when to address budget in the sales process?