Let’s spend a little time on a topic nobody likes to talk about, but that we in sales are forced to talk about all the time — money.
There are three key factors your people should consider when, as they qualify new prospects, they try to uncover a prospect’s true budget, and whether that budget corresponds to the full (undiscounted) cost of the solutions your company could provide. (In other words, does the prospect’s budget make it worthwhile to pursue the opportunity?)
The first two factors are pretty straightforward:
- The prospect must be willing. Does the prospect recognize the scope of his problem or goal? Does he understand the negative impact the status quo is having on his company? Is he therefore willing to spend the money required to fix his problem or achieve his goal?
- The prospect must be able. Is the prospect the one writing the checks? You can have the most enthusiastic and willing prospect in the world, but that doesn’t mean anything if he doesn’t have the authority to spend the money.
So, the prospect must be both willing and able to spend an appropriate amount of money. Simple enough.
OK, what’s the third component required to define a prospect’s budget?
- The salesperson has to believe.
Huh? Why would determining a prospect’s budget have anything to do with salespeople and their beliefs?
It actually makes a lot of sense if you think about it. Do your reps believe in what they’re selling? Do they believe your products or services are worth the price?
“Money weakness” is a major issue for a lot of salespeople. They get nervous about their prices being too high—they’re afraid of scaring off prospects or losing out during a bidding process.
If your reps don’t believe that what they’re selling is worth the price, what’s going to happen when a prospect hesitates, even slightly, at a quote? Your reps are going to cave. They might even agree that yes, that quote does seem high. They’ll offer to cut their prospects deals—and cut right into your profit!
How to stop this from happening? Well, ask your people to imagine making the following statement to a new prospect (early on, of course, while they’re qualifying the opportunity):
Salesperson: “Jack, our company has been around a long time, and we have a lot of repeat business, but I have to warn you—the people who buy from us again and again, they have told us that we’re a little more expensive.”
Now ask your reps, “After making that statement to a prospect, what’s the worst thing that could happen?” They’ll probably say, “Losing the sale.” And they’re right. Losing the sale is the worst thing that could happen. But it is not the most likely thing to happen.
If your salespeople can comfortably (and nicely—always nicely!) say to prospects that their product or service is going to cost a little more, what do you think those prospects are saying to themselves? “If that’s true, their company must be better!” They are not going to hang up or show your rep the door. More than likely, they’re going to want to be among those wise clients who recognize that you get what you pay for. No such thing as a free lunch, right?
And during every solid opportunity that’s worth pursuing, when your rep delivers a competitive quote at the end of the process, what’s that prospect going to think? He’s going to feel happy and a little smug, because he got the good stuff at a good price.
Happy prospects-turned-clients, closed sales, and no discounts — that’s something we all should believe in!