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Qualifying Budget

by PaulintheSticks
36 replies
I can understand why prospects don't want to talk about budget because it seems it puts them at a disadvantage in a negotiation. I know I've always been leery of giving that info because I think the salesperson's going to jack up the price if he knows I've got more to spend than what he might otherwise charge.

So what's the best way to deal w/a prospect that doesn't want to give you any info or asks you how much your services cost in the qualifying process?

Thanks.
#budget #qualifying
  • Profile picture of the author quicklynx
    Really good question. I'm anxious to read how others respond.

    If they don't want to provide the information which you need to determine a price it's a tricky situation. You don't want to seem like a weasel pulling the info out of them, and you definitely don't want to seem uninterested in their business.
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  • Profile picture of the author socialentry
    I would ask them indirectly.

    In my case, if they are with a competitor, they are automatically qualified.

    I found that if the person think you are asking to help, it goes easier. It has to flow, sometime, you won`t be able to ask it pointblank (sometime it works, sometime it doesn`t, depends on how you feel the prospect).

    If they start asking for price before qualifying (I found this to be relatively rare) , you can just stall for time.('as a matter of fact , I was getting to this' or 'we do a personalized and custom service, pricing varies from customer to customer')

    If they just give me too much trouble,I would just qualify out honestly. Price is not really a matter of negotiation, I don`t want to work for peanuts.

    If they start off early asking for price, you say a price range, and they say no before hearing you pitch, then I just consider him as closed-minded (or genuinely broke) and move on

    my .02 cents
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  • Profile picture of the author Claude Whitacre
    Originally Posted by PaulintheSticks View Post

    So what's the best way to deal w/a prospect that doesn't want to give you any info or asks you how much your services cost in the qualifying process?
    I tell them. I am now going to tell you what will work, most of the time.

    "How much is this?"

    "Bob, if you get our most expensive and complete service, the most you can possibly pay is $6,000 up front or we can finance it That's a lot of money isn't it?" (You must say this in one long run on sentence)

    Bob; "It sure is!" (What are they going to say? "No"?)

    Claude: "It better be the most profitable advertising you've ever had for that much money don't you agree?" (again. one run on sentence)

    Bob; "It better be!"

    Now, why does this work?

    First, you can't leave an opening between the words "finance it" and "That's a lot of money.." If you pause at all, he will say "That's too much money!"

    You want him to say that it's a lot of money, which is a completely different story. Don't change anything I just told you. Not a word.

    Now, all you have to do is show that what you have is easily worth what you are asking. And at the end, what you are selling is usually less than you quoted.

    And during the entire presentation, the prospect is getting used to the price.

    At some point in the presentation, the prospect will think (and I've had them say out loud) "Man, I thought that was a lot of money, but I can see now why someone would pay that".

    If you quote the maximum price they can pay...it's very hard to say "No" to that. Because it's the maximum, not what they will pay.

    Whatever this idea sounds like in print, I promise that I've used it hundreds of times. It works most of the time. And, if they let you continue after this dialog...they nearly always buy.

    Because it's all downhill from here.
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  • Profile picture of the author Climb Online
    I do a little research on the prospect. Are they spending now or have they in past? I look for full page ads in YP, newspapers & magazines. Radio or TV slots. Premium directory listings.

    If they are using any or combination of those mediums, you can be sure that they have large marketing budget and know that they need to be marketing. Now, whether it is actually working for them with positive ROI is another matter. I would feel comfortable offering premium package and pricing armed with the knowledge.

    If there is little evidence of marketing, and when the do its small ads, free directory listings, a web site with musical intro. be wary very wary, they either are broke or do not value marketing. I would go in expecting to educate a little more and offer a fiscally prudent package to begin with, and ramp up the fees when they start seeing results.
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  • Profile picture of the author Eddie Spangler
    Here is one way to do it if you dont already have a predefined package
    or are more comfortable with the proposal and close on 2nd visit type.

    You explain to them how you know at least 10 different ways to
    help your business and it doenst make a lot of sense to show you a 5k per month plan
    when you only can invest 1k

    You telling me your budget doesnt mean I try to gouge you or overcharge you
    it allows me to figure out what are the best of those 10 ways to give you the
    best bang for your buck.

    So they say okay i can budget 1k per month
    Now you need to find out if that is a real number or just something they threw out,
    ie get their REAL budget.

    Thats fine Mr. Dubious. I have some ideas in mind.
    When Im putting this marketing plan together and determine
    that we could really add some gasoline to the fire to
    get things moving twice as fast but it will require an additional $500mo investment,
    should I even bring it to your attention?

    Hopefully he says, well if you think that it will be worth it then I could probably
    swing that.

    Then when you come back present 3 offers, 1k pack we know he can do, 1.5k pack that he may be able to swing and the 2k pack-just in case he can swing bigger.
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  • Profile picture of the author Jason Kanigan
    Let's look at a few responses from the past to the budget question:

    Who sets the budget? Them or us?
    http://www.warriorforum.com/offline-...ch-we-can.html

    (Hint: I think it's "us." If they don't fit with our needs for budget, we're outta there.)

    A video from another perspective on the budget issue:
    http://www.warriorforum.com/offline-...-too-much.html

    Your prospect has NO budget?
    http://www.warriorforum.com/offline-...ontractor.html

    What happens when a price-shopper (and many prospects are, because at that point they don't know anything else to compare different vendors with) calls you?
    http://www.warriorforum.com/offline-...vanishing.html

    And how do you weed out the tire-kickers?
    http://www.warriorforum.com/offline-...e-kickers.html

    Now everything looks good, but I have to check my budget:
    http://www.warriorforum.com/offline-...-rebuttal.html

    More thoughts about the qualifying process, of which budget is an element:
    http://www.warriorforum.com/offline-...questions.html

    An audio post from JD that I'll wager he's forgotten he made :
    http://www.warriorforum.com/offline-...sion-home.html

    And my own blog entry on the budget subject:
    Can Your Prospect Pay: The Budget Problem In Sales | kanigan.ca
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    • Profile picture of the author PaulintheSticks
      Originally Posted by Claude Whitacre View Post

      First, you can't leave an opening between the words "finance it" and "That's a lot of money.." If you pause at all, he will say "That's too much money!"
      I'm trying to follow the psychology behind that but am not getting it. Care to elaborate a bit?

      Originally Posted by Eddie Spangler View Post

      You explain to them how you know at least 10 different ways to
      help your business and it doenst make a lot of sense to show you a 5k per month plan
      when you only can invest 1k
      I like that.


      Originally Posted by Jason Kanigan View Post

      Let's look at a few responses from the past to the budget question:

      What happens when a price-shopper (and many prospects are, because at that point they don't know anything else to compare different vendors with) calls you?
      http://www.warriorforum.com/offline-...vanishing.html
      Jason, those were all good but the price shopper one was brilliant. Thanks for sharing that.
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      • Profile picture of the author Claude Whitacre
        Originally Posted by PaulintheSticks View Post

        I'm trying to follow the psychology behind that but am not getting it. Care to elaborate a bit?
        Sure. ""Bob, if you get our most expensive and complete service, the most you can possibly pay is $6,000 up front or we can finance it That's a lot of money isn't it?" (You must say this in one long run on sentence).

        Now say it like three separate sentences;

        "Bob, if you get our most expensive and complete service, the most you can possibly pay is $6,000 up front or we can finance it..... That's a lot of money isn't it?".

        If you leave a gap of a second. The prospect is thinking about $6,000. It only takes a fraction of a second to process this sentence. He will reject the thought and say "I'll never pay that much. What do you have for $500?"

        If you say it as one long run-on sentence, the prospect is thinking about the fact that it's a lot of money. And that's what will come out of his mouth.

        It's all in the timing of the speech. In fact, try it on a friend just like I wrote it. Add your own figures and your own offer. Have him ask the question about cost, and then say the response with the same speed all the way through. Say the words like any normal conversation...but don't leave any gap between the words "finance it that's a lot..."

        The friend will say "It sure is a lot of money!" or maybe "Well, it sounds like a lot, but maybe not".

        You just want them to say that it's a lot of money. Not that it's too much money. "A lot of money" is a statement..."Too much money" is a dead end.

        You can even call me at my store if you like, and I'll show you how I say it.

        It's also important that you don't leave anything out. Don't leave out "The most you can possibly pay is..."...and "If you get everything" or "If you get my most expensive program.."

        Every part serves a purpose.

        This isn't an idea I'm trying to sell. It's the actual language I've used to successfully get the prospect past the price objection. I do it now. And I honestly can't remember the last time it didn't smoothly work.

        That doesn't mean they will buy. It means that your price didn't stop them from listening.

        I think I got the original idea from a close I read in a Tom Hopkins book. The structure and words are completely different. But the idea of a run on sentence to connect two thoughts I got from the book.

        And you have to say "It better be the best program out there for that price don't you agree?" The structure of that sentence is "It better be the (best/most profitable/best made/longest lasting/most trackable) (whatever)
        for that much money don't you agree?

        You are subtly changing what the prospect is thinking , but not enough for them to disagree. If you get anything but "It better be!" or "You said it!" or something along those lines...you said it wrong.

        This is about as advanced as you can get in selling. About now, most guys say "Yeah, and you need to really really believe in your product" or "Yeah, and you need to Always Be Closing!" or "Yeah, and selling is a numbers game".

        I hope you are smarter than that.
        I hope I didn't waste my time.
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  • Profile picture of the author misterme
    Originally Posted by PaulintheSticks View Post

    I know I've always been leery of giving that info because I think the salesperson's going to jack up the price if he knows I've got more to spend than what he might otherwise charge.
    And that's one reason I never ask what their budget is. It can lead to distrust but sales are based partly on establishing trust.

    The other reason I don't ask is because they're probably not going to give me the real budget number anyway. People usually have three numbers in mind. There's the "I hope I can get this low number that my cousin in Wisconsin saw a Craigslist ad for this much three years ago." Then there's the "It'll probably be more like this much, though" number and then they have their "If I have to, I'll pay this much" number.

    Guess which one they'll tell you if you directly ask what their budget is?
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  • Profile picture of the author Rearden
    Life insurance is a little different than your regular product or service.

    I sell premium -- I start high and work low. Versus selling a specific death benefit.

    "If I can qualify you today, is somewhere between $80 and $100 in your budget on monthly basis?"

    If not, I ask them and go lower, until they hopefully say yes.

    Now, in B2B sales, I sell a commodity product, and everybody thinks they know how it works, or, if they are a small business, they think it's way too expensive to fool with.

    If I get that objection while trying to set the appointment, I give them the minimum they could pay.
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  • Profile picture of the author ronrule
    Eh, I dunno man, the word "financing" is a turn-off for a lot of people. I will write a $6,000 check before I'll create a new monthly expense any day of the week, and so will most businesses. If you're pitching to businesses that think $6k is expensive, you're pitching to the wrong businesses.

    As far as getting them to reveal their budget, it's not rocket science... If the client went as far as letting you make your pitch, they DO have a number in their head as a budget and they DON'T want to waste their time listening to you talk if they can't afford what you're selling. This is where honesty and modular pricing can work well together, so just ask them. Most will throw out a number, and the rest will say they want you to show your hand first. If they throw out a number, start there and show them what you can do for that number, then go for upsells to see if that number was their real budget or a starting point to see where you were.

    If they want you to go first, just start with your best value price point - but TELL THEM its your best value price point - and ask if we're in the same ballpark or not. If you're too expensive, they'll say so and you can work your way down, otherwise you can continue where you started and work your way up.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by ronrule View Post

      Eh, I dunno man, the word "financing" is a turn-off for a lot of people. I will write a $6,000 check before I'll create a new monthly expense any day of the week, and so will most businesses. If you're pitching to businesses that think $6k is expensive, you're pitching to the wrong businesses.
      I understand. I added it, and sometimes say it, But it is the least important part. When I was selling vacuum cleaners, I never said it, and the method worked as well.

      On the other hand, I've never had a prospect focus on the "financing" part, one way or the other. So I may just drop it.
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  • Profile picture of the author PanteraIM
    Asking what their budget is only reflects what they are willing to pay based on the knowledge they have right now.

    It's almost always an arbitrary number unless you are dealing with very complex purchases. It also motivates them to stay consistent with that said price because it's their 'budget' so they aren't going to let YOU as a salesperson of all people to decide that for them.

    I stay as far away as possible from price and budgets, because if they really see the value in you and what you're selling they WILL find the money somewhere, somehow. Broke alcoholics always seem to have enough cash for booze, so do destitute bums for smokes and drugs, some sales are just easier to rationalize to ourselves than others.
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    • Profile picture of the author ronrule
      Depends on the product... for me, my time is more valuable. I don't want to waste my time pitching to someone who can't afford what I'm offering, if I didn't demonstrate the value in what I was selling and manage expectations before the meeting then I didn't do my job.

      Works that way on the receiving end too... these guys that want to be vague to get a face to face meeting, then go into a long-winded pitch and make me wait to hear the price won't get the opportunity. Tell me what you're selling and what it costs - if I don't see the value or can't afford it, we won't waste each other's time and you'll be free to move down your list to the next guy.

      The time I waste pitching and trying to convince someone why they should cash out their grandma's retirement account to buy what I'm selling could be used qualifying people who I know already have the budget, then going after them instead.
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      • Profile picture of the author PanteraIM
        Originally Posted by ronrule View Post

        Depends on the product... for me, my time is more valuable. I don't want to waste my time pitching to someone who can't afford what I'm offering, if I didn't demonstrate the value in what I was selling and manage expectations before the meeting then I didn't do my job.

        Works that way on the receiving end too... these guys that want to be vague to get a face to face meeting, then go into a long-winded pitch and make me wait to hear the price won't get the opportunity. Tell me what you're selling and what it costs - if I don't see the value or can't afford it, we won't waste each other's time and you'll be free to move down your list to the next guy.

        The time I waste pitching and trying to convince someone why they should cash out their grandma's retirement account to buy what I'm selling could be used qualifying people who I know already have the budget, then going after them instead.
        How do you know that the people that 'can't afford it', aren't only saying that to get you off the phone? Especially if they can sense if you are that kind of prospector and trust me it will come out in your voice.

        Maybe we have different skills, but I'm more inclined to investigate behind that objection to see is there's a legitimate basis before hanging up on them.

        I couldn't count the amount of sales I've made when people originally said they didn't have the budget.. it means literally nothing at the start of the process. I've never been invited to a sales meeting with someone that was broke either lol
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        • Profile picture of the author ronrule
          Originally Posted by PanteraIM View Post

          How do you know that the people that 'can't afford it', aren't only saying that to get you off the phone? Especially if they can sense if you are that kind of prospector and trust me it will come out in your voice.

          Maybe we have different skills, but I'm more inclined to investigate behind that objection to see is there's a legitimate basis before hanging up on them.

          I couldn't count the amount of sales I've made when people originally said they didn't have the budget.. it means literally nothing at the start of the process. I've never been invited to a sales meeting with someone that was broke either lol
          I'm saying prequal goes a long way... picking companies that obviously can afford it instead of going after the mom & pops where you have to guess what they have in the bank means you never have to worry about it. It's a lot easier to sell something of value to someone who can easily part with the money - your only job then is to convince them of the value. But when you're going after people where the COST of your product needs to be considered, regardless of the value, that's when you get caught in a time-wasting trap more often than not.

          Say your product is $10k ... to some businesses that's a lot of money, to some it isn't. I won't bother with the ones who think $10k is a lot of money, because even if they absolutely loved everything I had to offer they're still coming from a place where they have to think about whether they can spare it. It doesn't matter how much value you can bring when the owner is thinking "if my sales are low next month I might need that $10k".

          But when you go after the deeper pockets, the price isn't a factor, ONLY the value is. Those are the customers I will spend time with. I'd rather make 5 appointments and close 2 or 3 of those than make 10 appointments and close 2 or 3 of the other guys, then have them breathing down my neck constantly because they just gave me their life savings. There are only so many hours in the day, you know?
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          • Profile picture of the author PanteraIM
            Originally Posted by ronrule View Post

            I'm saying prequal goes a long way... picking companies that obviously can afford it instead of going after the mom & pops where you have to guess what they have in the bank means you never have to worry about it. It's a lot easier to sell something of value to someone who can easily part with the money - your only job then is to convince them of the value. But when you're going after people where the COST of your product needs to be considered, regardless of the value, that's when you get caught in a time-wasting trap more often than not.

            Say your product is $10k ... to some businesses that's a lot of money, to some it isn't. I won't bother with the ones who think $10k is a lot of money, because even if they absolutely loved everything I had to offer they're still coming from a place where they have to think about whether it's worth parting with it. When you go after the deeper pockets, the price isn't even a factor, ONLY the value is. Those are the customers I will spend time with. I'd rather make 5 appointments and close 2 or 3 of those than make 10 appointments and close 2 or 3 of the other guys, then have them breathing down my neck constantly because they just gave me their life savings. There are only so many hours in the day, you know?
            You got the right idea, brother.

            Pre qualification is part of the campaign which is a whole other topic IMO which is separate from prospecting.

            Getting the right data and targeting your segment to dollar value is a smart move. I have a web design campaign which I am focusing at the moment targeting unlisted businesses and then another SEM calling campaign I'm running going after people I know that advertise A LOT on G.

            The little sales tie you over for the bigger ones. It's all good.

            I totally agree your method makes more sense when you put it that way.
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            • Profile picture of the author ronrule
              Originally Posted by PanteraIM View Post

              Getting the right data and targeting your segment to dollar value is a smart move. I have a web design campaign which I am focusing at the moment targeting unlisted businesses and then another SEM calling campaign I'm running going after people I know that advertise A LOT on G.
              Exactly. Back when we first got our groove pursuing PPC clients, I had two rules:

              1. Only go after clients where ONE sale of their product covers 100% of what they're paying us for the month, and

              2. Only go after clients with focused keywords that would be typed by likely buyers, not browsers and researchers.

              It's not a coincidence that we ended up with a lot of eye doctors and DUI lawyers. Why? Because in both cases, if you are the end user you are only searching those terms for one reason: You are ready to spend money on their services. Couple that with the fact that 100% of those searches contained a city in the query (nobody just Google's "eye doctors" ... they search eye doctors in their AREA), and both had lots of available long-tail keywords to choose from, we were not only picking them up more easily, but we were making them VERY happy because it didn't take very many leads for them to be coming out way ahead.
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              • Profile picture of the author bawls
                Originally Posted by ronrule View Post

                Exactly. Back when we first got our groove pursuing PPC clients, I had two rules:

                1. Only go after clients where ONE sale of their product covers 100% of what they're paying us for the month, and

                2. Only go after clients with focused keywords that would be typed by likely buyers, not browsers and researchers.

                It's not a coincidence that we ended up with a lot of eye doctors and DUI lawyers. Why? Because in both cases, if you are the end user you are only searching those terms for one reason: You are ready to spend money on their services. Couple that with the fact that 100% of those searches contained a city in the query (nobody just Google's "eye doctors" ... they search eye doctors in their AREA), and both had lots of available long-tail keywords to choose from, we were not only picking them up more easily, but we were making them VERY happy because it didn't take very many leads for them to be coming out way ahead.
                Thats a good model, but I would say just sell per lead and build equity in your own business and not others.
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              • Profile picture of the author PaulintheSticks
                Originally Posted by ronrule View Post

                1. Only go after clients where ONE sale of their product covers 100% of what they're paying us for the month, and
                I use lifetime customer value in my presentations to prove value if the avg transaction is low but the avg # of transactions is high. Its a lot easier with your model since the math is simple but there are only so many high transaction niches.
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  • Profile picture of the author PaulintheSticks
    Not too long ago I had a salesman approach me and I told him I didn't have the money for his coaching. The truth was I just didn't want it bad enough because he hadn't convinced me of the value...which I ended up telling him before the end of the conversation.
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  • Profile picture of the author PaulintheSticks
    A perfect example of this is I just pitched an hvac guy that's probably doing $2 million/year and spending $50k on marketing. In the initial phone meeting he told me he didn't have the money to spend on my services. That didn't stop me. This was just over a week ago and I didn't get the contract but I pretty much knew that going in. I'm still following up and I believe I will get some business from him.

    So in this case I knew he had the money. The objection wasn't really an objection. But like Ron said, I don't go after mom and pop donut shops.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by PaulintheSticks View Post

      A perfect example of this is I just pitched an hvac guy that's probably doing $2 million/year and spending $50k on marketing. In the initial phone meeting he told me he didn't have the money to spend on my services. That didn't stop me. This was just over a week ago and I didn't get the contract but I pretty much knew that going in. I'm still following up and I believe I will get some business from him.

      So in this case I knew he had the money. The objection wasn't really an objection.

      Paul; "I can't afford it" isn't true in 99.99% of the cases. Even if it is true, it's the easiest excuse most can think of. It's a polite way of saying "I don't want to talk to you any more".

      It's such a cliche to say "I can't afford it" that I refuse to say it in any conversation. I'll never say it to anyone pitching me anything. I just say "I'm not a prospect for your deal".
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Claude Whitacre View Post

        Paul; "I can't afford it isn't true in 99.99% of the cases. Even if it is true, it's the easiest excuse most can think of. It's a polite way of saying "I don't want to talk to you any more".

        It's such a cliche to say "I can't afford it" that I refuse to say it in any conversation. I'll never say it to anyone pitching me anything. I just say "I'm not a prospect for your deal".
        And you have to wonder if you do say that enough (and believe it) it becomes a self-fulfilling prophecy. Not in a religious way though.
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      • Profile picture of the author bawls
        Originally Posted by Claude Whitacre View Post

        Paul; "I can't afford it isn't true in 99.99% of the cases. Even if it is true, it's the easiest excuse most can think of. It's a polite way of saying "I don't want to talk to you any more".

        It's such a cliche to say "I can't afford it" that I refuse to say it in any conversation. I'll never say it to anyone pitching me anything. I just say "I'm not a prospect for your deal".

        Can also mean "if it ain't broke no need to fix it" obvouisly the guy has people marketing for him and its working at the tune of 2 mil a year.
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        • Profile picture of the author PaulintheSticks
          Originally Posted by bawls View Post

          Can also mean "if it ain't broke no need to fix it" obvouisly the guy has people marketing for him and its working at the tune of 2 mil a year.
          If you knew his overhead, you might think differently. He's got 20 employees. And his marketing sucks. He does most of it himself and its totally random. No real strategy.
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          • Profile picture of the author bawls
            Originally Posted by PaulintheSticks View Post

            If you knew his overhead, you might think differently. He's got 20 employees. And his marketing sucks. He does most of it himself and its totally random. No real strategy.
            True but is his business struggling or more to the point does the owner think it is?

            Paul you probably been in the game long enough to know that your perception of a business is far different than the owners perception.
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            • Profile picture of the author RimaNaj2011
              I usually let them get excited and say "how much does this all cost?" and I give my price. I give a price higher than what I would be happy to walk out with. Usually they agree if you sell them on the value well but if not, you can tell them you offer different packages at lower prices.
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            • Profile picture of the author PaulintheSticks
              Originally Posted by bawls View Post

              True but is his business struggling or more to the point does the owner think it is?
              He's hurting. He told me during the phone mtg. The guy was pretty much an open book. I wonder if he even would have been talking to me if not.

              It probably really helped that my pitch is to help sbo's improve their current sales and marketing operations without spending more money on the typical services like SEO or whatever.
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              • Profile picture of the author bawls
                Not sure outside of Google +/places and PPC there is any actionables for HVAC, if you offer him evidence and he does not value evidence...nothing is going to change that, ask him if he would buy leads, because in the hvac niche the cost per lead using adwords is around 90 to 120 bucks each.
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                • Profile picture of the author PaulintheSticks
                  Originally Posted by bawls View Post

                  Not sure outside of Google +/places and PPC there is any actionables for HVAC, if you offer him evidence and he does not value evidence...nothing is going to change that, ask him if he would buy leads, because in the hvac niche the cost per lead using adwords is around 90 to 120 bucks each.
                  He's got fundamental sales and marketing problems that aren't going to be fixed by a ppc campaign. First of all his website sucks so driving traffic to his site isn't going to do any good.

                  But the big issue is that he's got no funnel or sales system whatsoever and no competitive advantage. Plus he's trying to sell fairly far outside of his local market which is going to kill his margins.
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                  • Profile picture of the author bawls
                    Originally Posted by PaulintheSticks View Post

                    He's got fundamental sales and marketing problems that aren't going to be fixed by a ppc campaign. First of all his website sucks so driving traffic to his site isn't going to do any good.

                    But the big issue is that he's got no funnel or sales system whatsoever and no competitive advantage. Plus he's trying to sell fairly far outside of his local market which is going to kill his margins.
                    Most those guys only value new business because is easier to see the results of x leads = x sells = x profit. I think the problem was that you offered him something complicated and abstract.
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  • Profile picture of the author misterme
    Asking what they're budget is... is pointless. They'll give you their lowest number. Good lord, how many times do people spend more than they originally said their budget was? Telling them what the budget's going to be is more powerful. The number's too high? Great, you can always go down. Here's the psychology. There's an upward pull when you quote a higher number first.

    You have a service you sell from $900 and up.

    If you ask them:
    What's your budget?

    Them: "I'm not spending more than $500 on this."

    Now you have a lot of building to do to get them up to your $900 minimum.

    Now, with you volunteering the price first:

    "Based on what you've told me, it sounds like my $900 service can help you."

    Them: "That's too much."

    You: "All right, how close are you?"

    Them: "Not close. I can do 500... maybe 6, 650. Absolutely no more than that."

    Note: I don't like giving examples like this because obviously I can write whatever answer suits my premise. But you see when you let them quote their low number first, it establishes the bulkhead. And they'll defend it. But when you quote a number first, which is probably higher, they realize their low number isn't realistic and they're more likely to give you their next higher number they have in mind.

    So in my example, I got them to bump up $150 simply by me stating numbers first. In negotiations, the person to give numbers first has the edge.
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  • Profile picture of the author PaulintheSticks
    You might be right. Maybe small business owners that understand the value of improving and systematizing their operations is a really small niche.
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    • Profile picture of the author bawls
      Originally Posted by PaulintheSticks View Post

      You might be right. Maybe small business owners that understand the value of improving and systematizing their operations is a really small niche.
      Insurance companies do, there is a company that sells that very thing to insurance companies at the tune of 250k for a two year contract.

      let me qualify insurance companies, small to medium vendors not the underwriters.
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  • Profile picture of the author kenmichaels
    Originally Posted by PaulintheSticks View Post

    I can understand why prospects don't want to talk about budget because it seems it puts them at a disadvantage in a negotiation. I know I've always been leery of giving that info because I think the salesperson's going to jack up the price if he knows I've got more to spend than what he might otherwise charge.

    So what's the best way to deal w/a prospect that doesn't want to give you any info or asks you how much your services cost in the qualifying process?

    Thanks.
    People already gave you the pro's and cons of asking about the budget,
    so i am not going to beat that dead horse.

    I am going to suggest a completely different way to figure it out.
    Once you get comfortable with this method it works 99.99999% of the time.

    I am making the assumption, as a sales person you talk WITH your
    prospect and not AT him.

    In the beginning, before you even attempt to pitch him, talk to him
    ask him direct questions about his business, questions about his
    advertising. Specify ask him, what type of advertising he does now.
    Ask him about his returns, ask him what he is paying for it.
    Ask him if he is happy with it. Ask as many questions that you can without
    making him uncomfortable. If you pull it off properly. After a few minutes
    he will be comfortable answering any question you ask.

    Don't get cocky and ask his budget, that creates a predetermined number in his head
    you DO NOT want that.

    Instead. You want to ask questions designed to figure out what he is already
    spending. You want to figure out if he is paying cash for them
    or leveraging credit. If he has a existing web guy, you want to
    know what he paid for it, existing seo guys... whats the monthly fee.

    ext ... ect ...

    how he responds will give you a very clear indication as to whether or not
    he feels he is getting his money worth.

    Again, pull this off properly, you will know what he has to spend,
    and more importantly how much he is willing to spend... before you
    ever pitch him AND with out directly asking.
    ( removing any stigma of a pre determined number )

    Also. During this convo, you will get a better idea of what you can sell
    that will fit him.

    example: you may have called him to sell a website.
    But you realize he is happy with what he has. But you also realize he is not happy
    with his SEO responses... so you can change gears and pitch that instead.

    --edit--
    If your interested in this technique, the term to look up is "pre-qualifying"
    ( not to be confused with "qualifying" )

    I am sure there are bookkoo books written on the subject.
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    Selling Ain't for Sissies!
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