Do They Have Budget???

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“Do they have budget,” is a fundamental qualifying question for every seller. We have all sorts of tricks/techniques for determining this. There’s the old standby, “What were you planning to spend?” Alternatively, the direct approach, “How much have you budgeted for this project?” Or if we are selling XaaS, “As you know our standard pricing is $X per user, how many seats are you funded to support?”

Sometimes, particularly in more complex situations, we ask “Is this project funded, ” or “How are you getting funding for the project?”

We spend a lot of time trying to figure out if they have enough money to invest in our project. But the budget question is a tough one for the customer to respond to in a meaningful way.

Perhaps, we had some conversations while they were putting together their budgets for the year. They may have gotten rough pricing and put in a budget request for something. It’s now the new year, that money is burning a hole in their pockets and they want to spend it. Or a new requirement came up, not knowing the costs of solutions, they committed a pot of money to satisfy this. So before they started the project, they got their budget, possibly because they know BANT as well as we do and they are prepared to answer our BANT questions.

But that is rarely the way buying and budgeting happen. Too often, a critical situation arises, they must address it, but have no budget–they may not even know how much they have to spend. But they have to do something, and they have to find the funding for this project.

And guess where that funding usually comes from—those people who sought and received funding lose it as funds are reallocated for more critical issues or projects.

Gartner research shows, 49% of funded buying projects were canceled because of internal priority changes. 48% of projects that were approved were ad hoc, that is had not been planned for or budgeted.

So we, and our customers are left in a difficult position when we ask the “do you have budget” question. They may have it, but there’s a good chance it might be diverted and reallocated. Or they may not have it, but it’s so urgent they have to find the money.

Is there a better conversation than the “Do you have budget” discussion?

Some ideas:

  1. Do they have a process for requesting funds for unanticipated spending? What is it? How does it work? What do they have to prove to get that funding allocated and who do they have to prove it to?
  2. What’s been their success in doing this in the past or for similar projects? Where have they succeeded, where have they failed?
  3. What happens if they fail to get the funding for this project? (What are the consequences of doing nothing?)
  4. What other projects might be competing for funding? How might you make the case for your project to be the most important?

Even if they have the budget, these questions are important for them to keep the budget and gain the approval to spend the money.

If your customer can’t answer these questions, if they don’t know how to get or keep the funding needed, if they haven’t gone through this process before, be wary. As much as they may want what you have to sell, they are unlikely to get approval for this. If you’ve gone through this process before, with this customer, you can create great value in helping them secure the funding and approval for the project.

Republished with author's permission from original post.

Dave Brock
Dave has spent his career developing high performance organizations. He worked in sales, marketing, and executive management capacities with IBM, Tektronix and Keithley Instruments. His consulting clients include companies in the semiconductor, aerospace, electronics, consumer products, computer, telecommunications, retailing, internet, software, professional and financial services industries.

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