Answer this sales objection: "I have no budget"

That's not so much an objection as a brush off.

You need to determine if they actually want it before going anywhere near this "objection".

If they do, then it is up to you to help them find a budget, do they have any cash in other budgets that could be re-allocated (maybe it's just the way you phrase the item - I once sold a major corporate 500 laptops for 50 quid, and then 500 laptop bags for nearly a million, because they came from different budgets and they had to use them that way...).

Or do can they pay in a different way, over time, leasing, credit agreements?

If the answer is neither, then they really have no money, and can't buy it even if they want to, so determine when they will have budget and go back.

I've found it useful to remember that money is not a resource. It's a priority. For everything we want in life, professionally or personally, we find the money. Same thing with time. If we really want to do something, we magically find the time. So, Jill's point about addressing the other person's interest right at the outset of her introduction is why her approach created a priority for the prospects budget and why he/she gave her the time. I personally think that empathy may be the last status symbol. So few people have it. When you make it about the other person, sincerely, you win almost every time.

I do a lot of work in data safety and file backup. So my question to people is, since they have no budget to protect their data, where will they find to bigger sack of money to replace their data. Data protection, like insurance, can bite your budget. But data restore, like a check to replace a wrecked car, then becomes affordable.

Companies use budgets as a tool to manage the cost of operations to meet a particular profit goal. Budgets are a good thing and the right way to run a company. Budgets are developed in the planning cycle for the following fiscal year. A lot of the information used to develop the budget is past and current data. If the organization knows nothing about my solution and what I can do for them, they most likely will not have budgeted for it.
If you present your solution in terms of using expense money then your prospect has no choice but to think of their budget. If you present your solution in terms of an ROI, then money can be found. Most economic buyers (the people with the money) will always evaluate a way to improve profitability. That's their job. Our job as sales people is to get the right value proposition in front of the right person at the right time.

It depends how far into your sales pitch this objection comes up.

If it comes up before you get past your second sentence, then this is what they say to everyone, and it's because they are use to saying it. It's their polite way of saying no -without having to say it. Even sales managers or executives are humans, and it's basic human nature: people don't like to say no to others. This is their easier way.

If it's after you have gone through your entire pitch or presentation - then it means one of three things:

1. You didn't identify them as your target market correctly, or they simply don't have the need. Just because you have a product or service that would fit your target market's need, doesn't mean they actually have the need - enough to do anything about it.

2. You didn't do your due diligence hard enough to find out if this company could even afford your services or product - as the objection might be absolutely the truth.

3. You didn't present enough value to the person you pitched or presented. If there is enough value - and they have the need, companies find a way. Or they will at least say something like: "we haven't budgeted for this - but this is something we are really interested in - let me get back to you once we see what we can do" or the like.

One thing I remember when I was first in sales and trying to overcome all objections is when this one would come up, I would always ask - 'what can you afford for this problem/need if this helps you do xxx better which will ultimately improve your company's bottom line?'

That usually stumps them because then it's back in their court to provide you a general dollar figure. If they don't, they were probably lying anyway. But when you ask the question that way, people usually respond with a ballpark number. If their ballpark figure is reasonable, you might want to work with them in a financial situation or work with them in a barter and trade situation.

For example: Your product/service is $10,000. And they say they only have $5,000. Then you let them know you really want them to have this product because you know it will help them and your company is in business to help other companies.

So you let them know for the remaining $5000, you will work out a non interest finance plan over the course of xx months. If you are confident in your product or service, you will know it will help them. And if it helps them, then their bottom line will go up, so they eventually will be able to easily afford the monthly payments to pay off the balance. Note: this is best if the product or service directly links to the bottom line. If it doesn't this could still work, but the months might have to be extended out longer.

That shows you are willing to work with them, you are not in it 'for just the sale' and they will remember this. In their eyes, you have slightly switched your role also. You have gone from a 'sales rep' to a colleague helping another professional colleague.

Overall, your exemplifying a working relationship with this person and their company and that always wins in many ways.

If they are happy with the product, they will refer you often - or give you the referrals when you ask for them.

You don't do this with everyone, you save this for a select few - you will know which one's are 'snowing you' and which ones are telling the truth about the lack of funds.

I like Jill's answer too. Budget funds come last in a buying process, so it is really a smoke-screen. No one budgets money unless they know what they are buying and how much it costs. So change the subject and talk about their business objectives. Let the budget take care of itself downstream.

Jeff Ogden, President
Find New Customers
"Lead Generation Made Simple"
http://www.findnewcustomers.net

I agree with Jill, you gotta have your chops up! Software alone isn't going to save any sales professional.

Sometimes the word budget itself turns prospective customers off. While providing business managment systems I find they often feel giving you a "budget number" means they are committing to spend that amount of money and therefore hurt their ability to get the best price on whatever they may purchase. We often phrase the question "Software for a company your size often ranges on the low end from x to the high end of x. Based on what we have discussed your company should fall about the mid range of that. Is that something your team can commit funds to if it solves your company's challanges." If yes, and they are of a size in your customer matrix (which you should already know) and you really can solve their problems, you are good to go. If their answer is "We could never spend that amount of money on software", move on. Early qualification is the least used sales tool. For some sales professionals, filling their pipeline with more instead of better seems appropriate. It isn't.
Another tool I often use is a document I send over to the prospective customer. Putting their budget on paper and not actually telling you while speaking to you somehow takes the stress out of it. If my prospective customer is serious they complete the document, if not, they blow it off. If the question of budget says "we dont' have one" our next call is to help them figure out how to create a budget. Our role then is "one who helps you buy instead of "someone that sells". But make sure you can solve their problems or budget is a mute point.

This is often an objection more easily addressed with the prospective client than with the early-stage software vendors that we represent. With limited resources to deploy in support of a given sales process, "budget" becomes a requirement for engagement. Understanding that organizations have typically not budgeted for a solution they do not know exists, coaching and the development of a sales strategy that focuses on key steps designed to establish value and build a credible ROI are critical. Absolutely agree with Jill's messaging going in the door.

Jill is 100% on point but you have to keep in mind you may be selling a product which may not have such a direct linkage to the revenue of the company. One could always pitch based on cost savings or ROI but it is extremely important to be realistic. Some prospects just don't have the money and it may be better to move on and find another prospect. Let us not forget quality of the lead is the single most important factor.