What, exactly, is it that makes many people uncomfortable talking about money? After all, it’s said that “money makes the world go ‘round.” Yet even given its pervasiveness, discussing finances can be emotionally charged or seen as taboo.
Social conditioning plays a large role in the reluctance to have conversations about money. In her 1922 book of etiquette, manners guru Emily Post wrote, “A very well-bred man intensely dislikes the mention of money, and never speaks of it (out of business hours) if he can avoid it.” For many, this attitude still exists today.
The unwillingness to talk about money carries over into the business environment, making financial discussions awkward, especially in a buy-sell relationship. However, understanding your prospect’s financial capabilities, limitations, and expectations is critical to the sales cycle. Therefore, it is important to “talk money” early and often. Delaying this important conversation will drag out the sales process and, ultimately, increase the cost of the sale as more time is invested.
How do you go about uncovering your prospect’s budget?
Let’s start with the obvious: you could come right out and ask, “What is your budget?” But in doing so, unless you’ve already established a high degree of trust, you are likely to encounter one of the following obstacles:
Your prospect may not know the budget. Often, when considering a new product or service, part of the buying process is determining what one should expect to pay for it.
Your prospect has a budget in mind but withholds the information because they fear your proposal will be designed to consume the full amount.
In this age of social media and access to information (whether valid or not) through the Internet, potential customers may form negative opinions about a company or individual before ever having a direct interaction with them. This inherent distrust can add to a prospect’s hesitancy to have a conversation about money with you. The options below will help you get the budget information you need while building trust with your prospect:
Provide a benchmark from which to begin the conversation. You might state, “On average, our customers invest between $75,000 to $100,000 on these types of solutions. Is this range consistent with what you were expecting to pay?” If the prospect’s budget matches the range, it makes sense to continue in the sales process. If they experience sticker shock, you can still add value by providing alternative solutions or vendors.
Help the prospect understand costs. Ask, “Do you know your budget, or do you need help to understanding the cost range of these types of solutions?” By offering to provide assistance, you are fostering a relationship with the prospect.
Ask the question in a different way. For example, open-ended questions like “What did you have in mind regarding your spending expectation for this type of solution?” or “What was your team thinking about in terms of budget for this?” allow room for the prospect to respond without making a commitment to a budget. You can then use this information as a jumping-off point for a more in-depth conversation.
Find out where they stand. Asking “Has your budget been set for this service?” will provide you with the response you need to assess how close the prospect is to making an investment. If the answer is “no,” you can offer help in defining the budget. If the response is “yes,” using the benchmarking approach above will move you closer to understanding the prospect’s financial situation.
Once you’ve determined an initial budget, continue to build trust as the sales process progresses. This is the often part of early and often!
Prior to delivering a proposal, re-visit the money conversation. Set expectations and reaffirm your understanding of the prospect’s financial capacity with a statement like “You told me your budget was $20,000 to $25,000. It looks like our proposal will fall right in the middle of that range.”
When re-engaging a prospect, validate the budget. An easy way to do this is to ask, “Has anything changed since we last talked?” If so, you can adjust accordingly.
Financial conversations may not be easy for everyone, but a good salesperson knows how to make others feel comfortable and confident talking about money. Approached correctly, even Miss Emily Post would approve!