The best thing in life is free,
but you can give it to the birds an' bees.
I need some money, need some money.
-John Lee Hooker
My favorite Blues singer sang it well - and for demand generation, money (or in this case budget) is a necessary part of any qualified lead. However, most prospects don't like disclosing their budget numbers to vendors early - and often, vendors don't know how to ask the right questions around budget in general.
From the client's perspective, it's a bit like dating - you don't tend to disclose how much you make to someone on date #1, but by the time that you are serious enough, you'll share your W2 information. Same thing is true in the engagement cycle between a client and a vendor. On day 1 of engagement, the client will rarely disclose their actual budget numbers on a project (unless tactically it is done to reveal either a top or bottom line of price sensitivity).
From the vendor's perspective, if the client won't be sharing budget on day 1, then how in the world do you determine budget?
- Ask circular questions about budget.
- Do your research in public documents like the company's annual reports for budget trends and planned expenditures in the future fiscal year.
- Sell the heck out of the value of your solution - not the cost of it.
- Which departments are funding the project?
- Does a board of directors have to sign off on the expenditure?
- Are the funds only available for a certain timeframe and do they go away/need re-approval past that timeframe?
- Is the project considered part of a capital project initiative or "everyday" spend of IT dollars?
- If they are price sensitive (and have let you know it), have they considered using financing* to complete the project?
Selling the value of your solution and not the cost of it is a topic I plan to discuss in a future post - but let's leave it as simple as, if the client understands and believes the value you bring to the table, cost can become irrelevant.
The KISS Question is "how many ways do you ask about budget on date 1?"
*Financing can be a terrific way to secure that a lead turns into a sale - a vendor can reap a ton of benefits including:
- Increase deal size.
- Close deals faster.
- Strengthen customer relationships by being a partner - not just a vendor in the process.
- Get paid up front.
- Offer more flexibility to the clients.