Handling Budget Objections in Sales

Photo by Karolina Grabowska from Pexels

Photo by Karolina Grabowska from Pexels

If you are in sales you have no doubt heard, “I don’t have the budget.” What do most people do? They give up. That excuse ends most sales conversations. Instead of giving up reevaluate your approach because I can guarantee you, they have a budget. Budget isn't a real blocker. What they are saying is they don’t feel the need to continue this conversation because they don't understand the value. As a salesperson, your job is to identify whether the real blocker is: value, timing, or access to funds. Below I provide some ways to respond and options you can provide your customers.

I can not emphasize this enough, if your product or service truly adds value to this customer it’s your responsibility to address the real concern. If you can’t pinpoint a real problem that you are solving for them, move along to the next customer. Out of respect for everyone's time, don’t try to manipulate your way into a sale. Even if you are feeling external pressure from your manager, it isn’t worth it. Sales is a hustle, there are billions of potential customers out there. Know where to spend your time and focus on the right fit.

Budgets

A budget by definition is an estimate for how they plan to spend their money during a certain amount of time. They may not have planned for this in their budget, but plans change. Unless you entered this relationship at the perfect time, they have not planned for this in their budget. As with any purchase, if you want something bad enough you will make it happen.

Decision-makers know that plans change. In this case, they didn’t plan on finding such a great product or solution to their problem. Now that they have, they need to realize the opportunity cost of not moving forward with this product or service right now.

Consider a grocery budget or if you are saving for something. You decided to organize your funds in a certain way. It was just that, a choice. They can also choose to make room or go over budget which is by no means uncommon.

Action: Respond with, “Of course you don’t have a budget for this. I just introduced this product/service to you. You don’t have enough information to be interested in yet. Let’s discuss your thoughts and how we can partner to address (insert problem). Until we come to an agreement on the value, the budget isn’t a concern. Discuss the ROI other customers have experienced.

Probe: When do they budget? Who is involved in those conversations? When was the last time they purchased a similar software/service? What criteria did they use to make that decision? How do you expect the budget to change next year?

Value

If the value is there they will make it work. How many times have you gone to purchase something with a budget in mind, just to justified going over it? For example, buying clothes, a phone, a house etc. The real objection is, “I don’t see why I should make this a priority for us right now.”

Action: Respond and say “I wouldn’t expect you to buy now, but if we start these conversations now we will be ahead when you are ready to solve this problem”

Probe: Ask them what they think the value of your product/service is. If there is a disconnect, it will be easy to identify here. Ask them why they chose that amount. Often this gives you a chance to address what they didn’t mention. Another good question to ask is how they would describe the value of that product/service to a manager. Being able to hear it in their own words provides an invaluable amount of insight.

Funds

If access to funds really is the problem then the issue is the payment structure. Get creative and provide different payment plans, discuss reallocating funds, or simply going over the budget. A couple of options to consider:

Action: Respond with, “If we could discuss different options to make it more agreeable to you, would you move forward? I’m confident we can find alternatives to make it affordable.

How do you create a budget?

Reallocation: Is there a cross-functional team that could benefit as well, and share the cost? Are you able to reallocate funds from another department?

Payment: If the payment is a problem, offer creative payment terms such as delayed first payment, quarterly, semi-annual, or monthly plans.

Financing: There are financial institutions companies can use to make large purchases. This allows them to avoid taking the immediate financial hit and typically offer lower monthly payments.

Honorable mention: The budget can come from multiple places. The key is getting to the right champion, and understanding her needs.

I hope this helped, if you have any suggestion feel free to comment below.