Do you often wonder why some salespeople always seem to outsell the competition? They are not doing it with some magical formula as some would assume. The main reason is that they have become adept at dealing with budget issues in a professional manner.
Salespeople who are uncomfortable (and even timid) when it comes to dealing with budget matters struggle with gaining the respect of their clients. If they don’t gain their client’s respect when dealing with money, they will ultimately struggle closing sales.
It’s not your money!The biggest hurdle for new salespeople (and some seasoned salespeople) to get over is the realization that they are not the ones investing in the project. Many salespeople cannot imagine spending $500,000 or a $1 million on a project. Many can’t imagine even spending $10,000. With that mindset, the salesperson begins to believe the project they are proposing is too expensive and begin to reduce the scope. Worse yet, they begin apologizing for the high budget. Astute clients will pick up on this immediately. They will either lose confidence in the salesperson and company and decide to go elsewhere, or they will ask the salesperson to cut their price. The sad thing is, many will go ahead and cut their price just to get the job!
What is the “real budget?”
The other key thing to keep in mind when determining what a client’s budget entails is their budget may be much higher than what the salesperson thinks it might be. For example, if a client says that they don’t want to spend a lot on the project, the salesperson should avoid attaching an arbitrary figure to that comment. They need to find a way to get to the client’s “real budget.”
The best thing to do is to be upfront in your budget discussions. Take the lead in this discussion. You cannot be afraid to talk money. The sooner you can be sure that you have pre-qualified the prospect and their budget, the less time you waste dealing with a prospect that will most likely say no after you have gone through the entire design and budgeting process.
Being upfront in budget conversations ensures you’re not wasting your time with a client unwilling to spend on the projects you’re selling.
Three Ways to Determine Your Client’s budget.I have found three sure-fire ways to get to the “real budget.”
1. Ask. You may think that this seems too simple. You don’t want to ask, “What can you afford to spend on your project?” You never want to put a client in a position to have to say, “I can’t afford this.” The better way to ask is, “How much are you comfortable investing in your project?”
First, it underscores the fact that this is an investment; second, it gives the client a comfortable way of telling you what they would like to spend on their project.
2. Give ranges. On the initial consultation, the prospect may tell you what the scope of the project they are considering. For example, they may say they want a bluestone patio to entertain up to eight to 10 people, a fire pit, a pergola and outdoor kitchen. As the prospect talks, you should be tabulating in your head the total potential cost of the project using past actual budgets. You would then say, “based on similar project we have designed and constructed, the project you described could cost between $50,000 and $80,000. Is this a comfortable budget range for you?” Typically, they may say, “That looks like a good budget range, but I would prefer to be at the low end or middle of the range.” You now have a good budget number if you’ve given the prospect a realistic range.3. Show pictures.
More than likely, you have a portfolio of completed projects to show the client, or pictures on your laptop or iPad. As you go through the pictures, show them projects similar in scope to what the prospect is interested in. You can say, “These projects that we are looking at are all in the $50,000 to $80,000 budget range. Is that what you were thinking of investing in your project?” They may respond, “Those are certainly beautiful projects, but I would never spend that on my property.” Or, they might say, “These projects are definitely in line with what we are looking for.”
Finally, always keep in mind that you are the expert. That is why clients are calling you. By assuming the expert role, you become a consultant rather than a salesperson. Approach your presentation with that in mind and the hesitancy to talk budget should disappear. Your ability to close on all types of projects, especially larger ones, will go up exponentially.
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