This common question could cost you

We experts always need to know if the prospect or client has money to pay us, whether it’s for one project or an ongoing engagement.

Sales experts tell you to ask bluntly “What is your budget for this?” It’s part of the qualifying step.

Then they tell you how to respond when the client refuses to answer.

But they don’t stop and think about why the prospect or client won’t tell you.

Why don’t they tell you?

Because they’re afraid to tell you.

Clients and prospectshave two fears:

Number one: if they tell you their budget, you’ll make a proposal that uses all the money.

Number two: see number one.

You’re asking the wrong question when you ask if they have a budget or what is their budget.

What you really need to know is if they have money to spend with your firm on this effort.

You don’t care if there’s a line in their budget to acquire the impacts you’ll deliver.

Ask a different question

The sequence of questions I use and teach my clients to use (6 Questions to Find Great Fit Clients) includes this question:

“Do you have money for this?”

Money can come from anywhere they choose.

  • They may have a line in their budget for categories such as “legal services” or “accounting services” or “training.” They’ll pay you out of this line, but they won’t pay you everything they’ve budgeted (planned) for the year.
  • Or they may have a current need such as “e-commerce development” or “systems upgrade” or “consulting on pricing strategy.” But they don’t want to tell you about their budget because of fear Number One: You’ll try to make them spend the whole thing with you.
  • It’s likely they didn’t plan to need, want, or desire what you offer but something came up. So there’s no budget—line item—but there is money to spend.

90% acceptance rate

A client firm that provides compliance analysis and related services to companies where industrial injuries are a huge risk used to ask if there was a budget for “safety.”

Company buyers would laugh and say “of course!” Like “duh, we’re in a dangerous industry, we always plan to spend money on safety.”

But the budget was for ALL safety related expenditures. Not just the compliance and training work my client does.

My client began using my Find Your Great Fit Client process. When they got to the question where they had to ask about money, they changed their question to: “Do you have money to spend on making sure every employee goes home healthy every night?” Prospects and clients would say “Absolutely!”

There are two big differences in this question:

One is “Do you have money” and two is “to pay for the IMPACT (life changing difference) we’ll deliver.”

Every single company buyer would answer “Yes.”

Then the provider would make three offers with fees proportional to the IMPACTs delivered. They have a 90% acceptance rate since they adopted this question about money and the Choice Framework.

Budget? What budget?

An accountant has mostly business clients. She used to ask if the CEO/Owner had a budget and most times they’d be evasive or answer “no.”

It turned out that most of these business owners didn’t have a budget at all.

They knew from years of experience how they made money and how they spent it. They didn’t write this down.

She started using the Find Your Great Fit Clients 6 Questions too. And when she asks if they “have money” they always say “yes.”

In most instances, they were calling her because they experienced a turning point moment: estate planning, more complex tax returns, disappointment with a previous provider, partnership agreements or disagreements. Something that suddenly made them think “I need help.”

Not only didn’t they have a written budget, they also hadn’t even thought about this moment until it happened.

Look in the mirror

I had the “do you have a budget “question drilled into me for years. At least 50% of business owners would say “no.”

Then I looked closely at my own financial management practices and realized I would have to say “no” when anyone asked me this question, except for one, accounting.

But I have paid numerous providers over the years. I didn’t have a “budget” but I did have “money.”

Make the change yourself

Why dead-end the conversation with prospects and clients by asking “do you have a budget?”

You’ll miss out on great fit clients!

Schedule a virtual coffee if you have questions about the 6 Questions or about IMPACT Based Pricing. Or text MONEY to 703-801-0345.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

More Articles

Get off the ground floor!

A long time business owner with a track record of many successes told me he’s planning a pivot. He’ll apply his knowledge and expertise to

Read More

IMPACT Based Pricing

Subscribe to IMPACT Based Pricing, TCG’s original content newsletter that helps Business Owners and Executives understand everything about pricing for impact, not for inputs.