Chapter 10: Are You Afraid To Ask About Their Budget?

Of course you are.  Well, maybe afraid is the wrong word.  Maybe apprehensive is a better word.  Or cautious.  Maybe we can just keep thinking up words so we run out of time and can’t ask our prospect all those squishy questions about his budget.

Why is it so difficult to ask our prospect questions about the project’s budget?

Talking about money, in any kind discussion, business or otherwise, tends to make us feel very uncomfortable.  But not having an understanding of the budget can lead to false assumptions (see Chapter 8 and Chapter 9) and waste both your and your prospect’s time. It is important to realize that the budget needs to be discussed up front and early.

Early in my sales career, I was so excited to be talking to an interested prospect that I forged ahead at full speed, asking about everything except the budget.  “I better not ask about money at this point,” I reasoned to myself.  “She’ll be so impressed with my proposal that it won’t matter what what my competitors price is.”

Let’s look at the assumptions I typically made.  Besides the 13 (yes, 13!) assumptions discussed in the previous two chapters, I typically increased the odds against myself by assuming that:  1, there was a budget;  2, there was a budget with enough funds for the project;  3, there were more funds than I was assuming;  4, project funding was only coming from one budget…and so on and so on.

Did unspoken budget questions stop me?

It didn’t even slow me down.  Many hours, and then many more would go into my glorious proposals.  Company history, corporate organization charts, staff backgrounds, charts, graphs, drawings, all printed out and bound into an inch thick booklet, dripping with fresh ink – customers were impressed with the sheer weight, if not the content.

As I would thump the proposal down on my prospects desk, all those assumptions would rear their ugly heads.  Bypassing all that carefully crafted prose, those detailed charts and graphs, and going straight to the last page with the pricing, I would hear one of two things:

“Wow.  This is way over our budget.”

or

“Wow.  This is way cheaper than I thought.”

Neither of those statements is what a salesperson wants to hear.  Not once did I hear, “Wow.  This price is exactly what I expected.”  Sadly, this problem is typical with not only most junior salespeople, but with quite a few senior salespeople as well.

It may be uncomfortable for you to ask questions about their budget, but if you have established trust (Chapter 7) and expertise (Chapter 3), you can accomplish this in a way that is acceptable to your prospect and furthers the sales and qualification process.

This is an important part of any business-to-business sale, and it is critical to any large, complex, or technical sale.  We will be spending quite a bit of time honing in on tactics to enable a mutually beneficial discussion on budgets and assumptions.  Otherwise, you are wasting time, killing trees, and annoying your boss.

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Chapter 9: The Problem with Problems (and too many Assumptions)

There is more to the problem of assumptions than making sure that all parties have mutually agreed upon terms.  I have found that there are many different kinds of assumptions that can keep you from giving your client a great solution to their problem.

For instance, your client may assume that there actually is a problem when there isn’t.  Maybe there once was one, but for whatever reason, it is now gone, or that there never was a real problem in the first place.  It is also possible that the client may be focusing on a single problem, when there are really several problems.

While every salesperson may believe that his or her company has the best solution to the problem, there is a chance that there is no solution to the problem.  Alternately, the client may believe that there is only one solution to the problem when in fact there may be many. Or what if the reality is that the solution may be worse than the problem?  (Insert your favorite “the government made the solution worse than the problem” story here).

What if nobody cares about the problem?  While your contact may think that the problem is a mission-critical issue that could affect the very survival of the company, there is the possibility that nobody else believes him.  And if the person who signs the contracts and writes the checks for projects doesn’t think there is a real problem, then you have a very steep road ahead of you.

As more companies focus on ROI as part of their purchasing decisions, it may be a poor assumption that the problem and solution can be measured in a way to prove ROI.  In fact, it may be impossible to measure any aspect of the problem or solution.  Also, if the client has many people involved in the project, there is a great chance that each of them will have their own perception of the problem and the solution.  How do you handle this if your client has a team of twelve people who all want a piece of the decision?

One of the worst assumptions is that your client perceives your solution will solve the entire problem.  While it may be true that ultimately there are only two kinds of problems (people problems and money problems), the world of large, complex, or technical sales usually means that many problems within the client’s organization are causing varying amounts of influence and these can greatly affect any solution you may be proposing.

Let’s go back to our cloud-based CRM example from Chapter 8.  After lots of questions (Chapter 7), we all agreed that the client’s problem was that they couldn’t keep track of key data for their staff and customers, and they didn’t have a large budget to solve this problem.  In reality there would be much more to this, but let’s agree your product or service met the client’s stated needs.  How could this project possibly fail?

While your solution may solve your contact’s problem, it may cause real or imagined problems elsewhere, creating friction within the client’s organization that could  result in a failure of your solution.  For example, the IT department may not like the fact that your cloud-based CRM stores sensitive data offsite instead of on their servers.  The HR department may not like the additional responsibility of training staff on how to use the new system.  The finance department may not like the monthly software license costs, preferring to make a one-time purchase of a software program that the company would then own.  The CEO may not like spending any money at all.  And those always annoying, whiny salespeople?  Instead of efficient data management, they see management asking them to do more reports.

How do you overcome all of those problems?

Don’t get too overwrought by all of this.  Everyone involved in your project will have problems with assumptions – that’s just human nature.  However, if you are  aware of the multitude of assumptions that are being made, on both sides of the table, you can better navigate the sales process, keep qualifying, and reduce the possibility that some of those assumptions will have a negative impact.  Keep your eyes and ears open to these issues and you will walk a straighter path towards a successful sale and implementation of your solution.

Chapter 8: How do you spell ASSUME?

We all know the “to assume is to make an ASS out of U and ME” line, but how far are you willing to go to reach an understanding on the facts of the problem you are trying to solve?  In Chapter 7 we talked about creating trust so that you can mutually discover the full set of facts, but there is actually more to this than asking great questions.

The first assumption problem involves terms.  If you are a 20-year industry veteran, and the client is new to your industry, there is a potential minefield of errors that can get in the way of your fact digging based on differing ideas of what terms and phrases mean.  For example, let’s say that your client wants to talk to you about cloud-based CRM systems. We all know that it is poor form to talk in endless acronyms, but worse, CRM might mean one thing to you and another to your client.  And the cloud, as used in the computer industry, is so new and abstract to some people that you would definitely need to make sure you both were talking about the same thing.

How do you agree on the meaning of terms in a way that doesn’t sound condescending to your client?

Done properly, a quick discussion on terms can be a great way to show that you want to be 100% accurate in every aspect of the solution process (at the same time, it helps with your continuous prospect qualification process).  It might be something as simple as saying, “We’ve found that cloud-based customer relationship management systems (notice CRM is defined here, not abbreviated) can mean different things to different people.  To make sure we are on the same page, can you tell me what that means to you and what you are trying to accomplish?”

You might find out that to the client, CRM means Consumer Research Methodology. Better to find that out now than 30 minutes into a presentation.  Or you may find that their idea of a cloud platform is a Hotmail account when you think it means a hosted software platform with full redundancy and real-time failover.  Whatever happens, you have removed assumptions, clarified intent, and set up a pathway that you can now both go down together.  In addition, the client has had a chance to think about what her real problem is, and what a successful outcome might look like.

Using the example above, let’s assume that you and the client have agreed that a cloud-based CRM is a software package that resides on your company’s computer servers, is accessed over a standard web browser, and allows you to import, export, and sort data on the company’s staff and customers (an example of this is SalesForce).  The next step is to find out why your client wants this.  The client may answer, “I Googled it and found that it is cheaper to get a cloud-based system rather than a self-hosted system.”

If you sell cloud-based CRM systems, it is time to fire up the PowerPoint, show 12 slides of your company’s org charts, and close with the classic “sign here, three copies, press hard” and run for the door, right?

Not so fast.

If price is the only reason that they are buying this type of system, then you are now in the commodity business; in a race to the bottom to see who can have the lowest price and margin.  There is a place in every industry for the lowest cost product or service, but I’ve always preferred to be known as the Most Expensive Guy In Town (more on that later). There must be another thing other than price that is driving this decision.  There almost always is.

This is where real sales begins.

What about the other things that your company can do, such as give  24/7 for tech support, automatic software upgrades, user-friendly software, special customizations, etc? What about other advantages of cloud-based systems, such as real-time security against spam, malware, hackers, and Nigerian e-mail scams?  Only after agreeing on what each of these terms means to the client can you proceed in a way that makes you a resource to your client, and if you are resource, you can earn your way to Trusted Advisor status (see Chapter 3).

These are just assumptions on terms.  In Chapter 9, we will look at other types of more complex assumptions, all based on the frailties of the human mind.

Chapter 6 – Partnering with your Prospect

In the last chapter we looked at the three most common ways to fail at sales.  Those three methodologies have been repeated and perfected through the years, and are very effective at making sure the client doesn’t get what he or she wants while turning you into ineffective salesperson.  As you have probably guessed, there is a better way.

Let’s work with a simple example.  Do you have a friend who is a gadget freak? Someone who drools over technical specs, compares all the different models, and camps out overnight at the Apple store every time a new product is released?  If you were in the market for a new cell phone, you might seek guidance from this person, discussing the pros and cons of different models and operating systems, all the while interacting as equals.  Perhaps at the end of your discussion, you might trust his judgement in this purchase more than you would your own.  This friend has little or nothing to gain in advising you, and you would probably take the advice given as trusted, impartial, and based on your true needs, resulting in your purchase of a perfect new cell phone.

It is this kind of dynamic that we are trying to create with a client-centric sale.

In the real world of sales, this isn’t always easy.  Most prospects have been trained over the years to expect salespeople telling them what they need (usually based on selling what they have) without really understanding their business.  As the saying goes, “If all you sell are hammers, after a while everything starts to look like a nail.”  If not that, prospects are used to telling salespeople what they want, eschewing any kind of value-add dialog from the salesperson that might benefit the prospect’s company.  If it is a large, complex, or technical sale, it is very likely that there will be a great deal of guessing by both the salesperson and the prospect.  These dysfunctional selling practices were covered in greater detail in Chapter 5.

A better way is to focus on a collaborative and consultative sale, acting as if you were not on commission, but instead were hired to help your client complete a successful project. Just as a hired consultant would do research with the client in able to unearth useful data, you will need to do the same with your prospect. During this question asking process, it is very likely that your client will not have all of the answers you require to create an optimum solution.  This is good news, not bad.  I have learned over the years that in the end, the salesman with the best answers does not win the sale.  My experience has shown the opposite:  the salesman with the best questions wins.

It is here that Client-Centric Sales takes a sharp turn away from the well known traditional consultative sales techniques that have been taught for decades.  At first, things might appear very similar to what you are used to.  But as we get deeper into the salesperson-prospect relationship, you will see that success comes from asking questions that your contact won’t be able to answer.  This opens up the opportunity for both you and your prospect to engage others within the organization.  Besides creating a greater sense of corporate buy-in, you may learn, for example, that you have been talking to the wrong person, that the project doesn’t have firm funding, that the European division wants the same solution, or that the president has squashed the project several times in the past. The right questions will help you continually qualify your prospect.

Client-Centric Sales is based on this methodology.  The chapters that follow will help you learn how to ask tough questions, obtain relevant data, meet key people within the organization, verify funding, cooperatively build a business case, jointly present it, and reach a definitive decision.

So roll up your sleeves.  We’re about to get our hands dirty.

Chapter 3: Becoming an Expert in Order to Qualify Successfully

If you had no need for money, but still wanted to work for your company, how would you treat your customers?  With no need to hit a quota, earn a commission, or impress a boss, would you interact in the same way as you do now? Let’s assume that you wouldn’t.  Let’s assume that you would only spend your time with clients who had problems you could solve, that you would work hard to put together the right solution to solve those problems, and that the client had the resources to enact your solution.

Now wouldn’t that be an enjoyable working relationship?

What if you are like most of us, and you need to hit your quota, earn your commission, and impress your boss?  You can have it all – great relationships with your clients, happy customers, and a great income, but you and your clients will have to change how you interact.  It means that in order to be an effective salesperson, you will have to greatly increase your knowledge of your prospects and their industries.  It means that you will have to earn the trust of the key people within those prospects.  And it means that you will need to push your prospects to dig for information that they don’t even know exists.

Joseph Stiglitz won a Nobel Prize for his work in economics.  One popular phrase to come out of that work is that “There is no such thing as perfect information.”  It has always surprised me that when I quizzed salespeople about a prospect that they were working on almost no information.  Often, all they knew was that there was an RFQ on the street. Salespeople would work hours and hours responding to these projects.  A handful of competitors would do the same, with nobody (often including the company who issued the RFQ) really understood the problems that the prospect was trying to solve.

How do you get this information?  It starts by increasing your knowledge of your prospects industry and the challenges that companies within it face.  For example, if you sell to the healthcare industry, do you know about HIPAA requirements and how they affect your prospect’s business?  While your product or service may not directly affect a hospital’s HIPAA requirements, this is something that greatly affects many aspects of a hospital’s business, and the more you understand the business drivers of your prospect, the better chance you have of becoming a trusted expert with integrity.

Those who only sell products become commoditized; those who provide wisdom and guidance become trusted experts who can’t be displaced by a competitor with a lower price.

There is no secret to learning a prospect’s industry.  The internet is an obvious place to start, and we won’t spend time discussing such basic things.  Learning about the major problems faced by the prospect’s industry in general is also straight forward, and just requires a commitment to spend the time learning about those problems.  Learning about the problems and key business drivers of a particular prospect is more difficult.  But this work is essential, and is part of the qualifying process that we discussed in Chapter 2.

One way to start this process is to join industry groups on LinkedIn or industry trade sites and respond to the postings there with comments or advice.  Join online groups associated with the problems and solutions that companies in your prospect’s industry are experiencing.  An important note: LinkedIn groups should be used to establish competence – this is not a place to give even a hint of a sales pitch.

You can use LinkedIn to determine who are the important people at your prospect’s company.  Join the groups that they have joined, comment on posts that they may be reading, and get introductions to them through your other connections.  With a bit of diligence, you can become an expert who is sought after instead of a salesperson to be avoided.  By doing this prep work up front before first contact with your prospect, you will be way ahead of your competitors.

Chapter 2: Dialing for Dollars, the Newbie Salesperson’s Nemesis

We’ve all done it.  Most likely, during our early sales careers, or when joining a new company, or opening up a new territory. The dreaded cold call, also known as “Dialing for Dollars,” using a list of the area’s major employers.  “Hello, Mr. Prospect.  I’ve done no research on you or your company. I have no idea what problems you face, and frankly don’t care.  Can I meet with you for several hours to show you a poorly done PowerPoint presentation, and then e-mail you a ‘cut and paste’ proposal with multiple misspellings?  Hello?  Hello???”  The formula was very straight forward:  call, fail, call, fail, call, fail, call, get meeting, write proposal, fail.

Oh, the humanity…

I got better in time, as we all eventually do.  But why did sales have to be so hard?  I have always had a burning need to work very little, while earning an embarrassing large amount of money in the process. There had to be a better way.  There was – the surprising thing was that it came to me while working at my only non-sales job.  The most valuable lessons I learned about selling came from my short time working as a consultant for customers.

Firstly, what does a consultant do, and why do end-users hire them?

My company was hired primarily because our clients did not trust the people who were selling them products and services.  Usually, after several companies had met with our clients (call, get meeting, write proposal, fail), they would call us to try and make sense of all the proposals.  We would almost always have to start from scratch, evaluating needs, creating a budget, writing a specification, putting the project out to bid, and then awarding the project to one of the bidders.  Our goal was to level the playing field so that if a company was pre-qualified to bid on the project, we could choose the lowest price bid. Where was the selling here?  In essence, we turned salespeople into bid responders.  Our consulting company was able to charge high fees to do this work, primarily because no salesperson had been able to establish himself as a trusted advisor to the customer.

What were the big lessons I learned as a consultant?  One of them was that in reality I never sold anybody anything…if I was lucky a customer bought from me.  More important: I got to hear what the customer said after the salespeople left the room.

What a gift!  My favorite people in the world, the people who write checks for purchase orders, were explaining what they liked and didn’t like about salespeople, presentations, demos, proposals, and (ack!) unread corporate brochures.  While it was painful to learn that many of my “secret sales moves” were at best ineffective, I was able to take our client’s comments and apply them at my next sales job.  This education helped me to open up a new sales territory that was a four hour drive from my home, had no existing clients, and full of prospects who had no idea who my company was or what we did.  Armed with this new end-user knowledge, I was able to do more business in a year than the home office did with three salesmen.

Was I a great salesman?  No.  I have always been, at best, only an above average salesman. But my short-lived consultant career taught me what worked and what didn’t work with end-users.  I learned what an ideal prospect looked like and what a time wasting, low price buying, revise-the-proposal 32 times prospect looked like.  Qualifying became the foundation of my sales success.

What is qualifying?  Is it surfing the web for companies that fit your product or service profile?  Maybe kinda sorta.  Really, it is much more than that. While qualifying is an important first part of the process, it really doesn’t stop until you have the purchase order in your hand.  Most people do an initial qualification, but then halfway through the sales process, with red lights flashing and warning flags waving, they ignore the signs that the prospect is no longer (or perhaps never was) a qualified prospect.  “I’m halfway through writing the proposal…I can’t stop now,” they reason.  “I’ll finish it up, submit it, and hope for the best.”  And when they eventually lose the sale, they kick themselves for pursuing a lost cause.

It doesn’t have to be that way.  By continuously qualifying a prospect, deeper and wider within the organization than you may be used to, you can make sure that you spend your time with the right people within your prospect’s organization.  This is especially important with large, technical, or complex sales. You need to focus on broadening your contact base, because the person with whom you are working with, the person who swears that he or she is the person who will be making the decision, is almost certainly not the person who will be making the final decision.  The only exception I have personally ever seen to this is when selling to the CFO.  More commonly, a host of people whom you have never met will be part of a group that makes the purchase decision.

There are only two ways around this.  The optimum solution is to get to all of the right people, which is easier said than done.  We’ll explore strategies to do this in future posts. The other option is to teach your prospect how to sell your product or service to his or her management team in an effective way.  We will explore the craft of qualifying in great detail as well.

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