Budget squeeze: steering sales in tricky economic climates
You might have been told you can’t get your deal over the line due to budget constraints. Or perhaps you’re being squeezed, so your deal is not the value you might have hoped for.
This sounds perfectly plausible in the current economic climate; money is tight, so the spending brakes are on.
That said, some software companies are still recording record growth, so some customers are still buying.
How do you ensure you are one of the lucky ones and keep your deals intact?
A robust business case
When we work with a client receiving budget-constrained customer feedback, we first ask how robust the proposed business case is.
Does your business case:
- Articulate unique value to your customer?
- Have a clear ROI, so your customer can easily see the investment versus return?
- Speak directly to the Champion and Economic buyer who will benefit the most from this deal?
When compiling a business case, you must demonstrate why your product or service is the only solution for your customer.
Once compiled, you’ll need to validate this with your customer to ensure you are hitting the mark and your business case provides the much-needed antidote to their business challenges.
And, once validated, do they understand that only you hold the key to success?
ROI rules the roost
It might be tempting to keep the deal on ice and wait for the company to return with news of a budget being available. Unfortunately, when they say there are budget constraints, they are saying the dreaded “maybe.”
And if we have learned one thing, it is that:
A “maybe” is more often a “no” in disguise.
By not being a hard “no”, your deal limps on, takes up valuable time and prevents new opportunities from being explored.
Our advice to our clients at this stage is to go back to the beginning of the sales cycle. Re-examine your deal, focusing on the value you bring to your customer and the return on investment they will see by working with you.
This feels like a big backward step. Moving from the end of your pipeline back up the funnel to the start can be disheartening.
But:
Doing this is much better than having a deal perpetually constrained by budget, draining your energy and resources.
This re-examination starts with the pain you have identified and is backed up by the Metrics you have collected:
- The pain needs to be real and immediate, and you need to be able to justify it in numbers.
- Your metrics must show what is at stake if nothing is done.
If you have identified an urgent need and have the numbers to back it up, you can show your customer that the return on their investment warrants freeing up the budget.
The power of the Economic buyer
The business case only holds water if validated with the Economic buyer. Without this validation, the idea of prioritising budget is still a dream. Validation, in part, comes from answering the following:
- Have you identified the Economic buyer?
- Do they directly benefit from your solution?
- Do you know what a win will look like for them if they implement your solution?
Deals where the Economic buyer hasn’t been identified or assigned a budget are skating on thin ice.
If you rely on someone who spends money from a budget they are given rather than a budget they control, you’ll likely encounter constraints in today’s world.
Refer to our MEDDIC training and our Economic buyer blog to re-qualify whether the person assigning the budget to your deal is the Economic buyer. If they don’t have the level of control we’ve described, they’re probably not the Economic buyer.
Champion to the rescue
By now, you should have a good relationship with your Champion. You should be able to lean on them for help identifying the person you need to find to get this deal signed off.
If your Champion doesn’t behave as you hoped they would or as you think they should, you must ask yourself: are they my Champion?
Our experience shows that in many deals that stall for one reason or another, the Champion you have identified isn’t your Champion. Or if they are, you have yet to spend the time and effort building them into your Champion.
Taking the time to build a relationship with your Champion will be rewarding for the rest of your career. Once built, they will be your Champion for life, wherever their career takes them. Time spent on this step in any deal is time you will get back tenfold; Champions are not built in a day.
So, remember: if a budget squeeze is stretching out your sales cycle or reducing your deal value, this is your cue to go back a step so that you can take two steps forward.
Are you already an inspir’em member? You can log in today to take advantage of your digital learning resources and pose questions to our coaches in our growing online community.
Not an inspir’em member? You can look at what inspir’em membership can do to accelerate your sales process.
