This is my favorite objection! Ever!
Ok, it’s not really an objection, it’s an invitation. So it’s my favorite buying invitation,ever!
Every seller has heard “lack of budget” as an excuse on multiple occasions. When I conduct AgileSelling workshops I gather the most frustrating sales challenges from the audience. Lack of Budget is usually in the top five.
Let’s start by translating what it really means. When a contact says, “we don’t have a budget for this”, they’re really saying, “I don’t have the authority to change the budget.” This means someone else does have the authority to execute a reshuffle of the budget.
Now comes the interesting part: The agile seller uses lack of budget as an invitation to meet the real budget authority and sell larger deals.
A couple of days ago, I had a LinkedIn message exchange with a former colleague of mine, Steve Flannery. Our quick exchange reminded me of a time when Steve had overcome this challenge in spades. I recall reviewing his year in advance forecast with him during a Q1 Ops review. During the review Steve revealed his largest customer, Unisys, would not be spending any money on our solution in the coming year. They were dropping from spending over a million dollars a year to zero – nada, zilch. When I asked why, he described a situation where Unisys was consolidating from five product lines down to one and laying off personnel, leaving them saturated with our software solution. He ended his story with the words, “so they slashed the budget”.
I suggested it was an invitation to meet with the person who slashed the budget.
Steve set up a meeting with the General Manager of this particular Unisys division. When Steve met with the GM, he found the situation was even worse that he previously understood. As a result of waves of personnel layoffs, their best remaining people were shopping their resumes and were likely to jump ship. That meant the GM wouldn’t have enough of the right people to get their only remaining product line to market.
Steve ended up closing a $75M contract for services to insure the one remaining product line succeeded.
Here’s what I learned from Steve’s experience:
- If there’s a big problem lower in the organization, it’s probably more painful higher up.
- Budget is an amorphous solid. If you forgot your high school chemistry, an amorphous solid is one that can change shape, usually by adding some heat.
- The Agile Seller uses lack of budget as a reason to meet with the person who can reshape a budget.
- An effective problem diagnosis can create a larger opportunity with the person who has the authority to move money around.
Let’s exit Steve’s example, and talk about the everyday, ordinary selling campaign. Can a seller still use lack of budget as way to get to a decision maker and overcome the obstacle? The answer is yes, if…
If… the seller does an agile job diagnosing the problem set and uncovers the impact of not taking action. When done effectively, the contact will usually respond positively to a request to collaborate together to get the purchase funded, including taking the message to more powerful budget holders.
So the next time your hear “no budget”, translate it in your head as an invitation. It’s an invitation to diagnose effectively, meet other stakeholders and create a larger opportunity.
Kevin Temple guides sales teams to be more agile and improve revenue outcomes. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.