Battling the no-budget blockade
It can be deflating when you have worked on a prospective deal only to be told there is no budget. You might want to start again with another company because you believe this deal is dead and it’s time to move on.
Not so fast.
Let’s back up and analyse the steps taken to get to the dreaded words: “I’m sorry, but we have no budget for this.”
Step 1: seeking out the customer’s pain
People don’t buy without a valid reason; the status quo is a tricky boat to rock.
Perhaps you need to go back to the beginning to understand what’s happened.
Perhaps there always needed to be a compelling reason, and you hadn’t quite found it.
Or, if there was one, has that compelling reason become lost along the way?
One of the biggest challenges in enterprise deals is that the sales cycle can often be lengthy, with many people involved.
Sometimes, we need to revisit the foundations of opportunities to re-evaluate the pain that tickled someone’s interest in the first place.
Identifying customer pain is the foundation we need to return to.
How big is the pain: paper cut or amputation?
You may have identified a valid pain, but does it warrant solving?
Changing the status quo is still a hard sell, so unless the pain is meaningful to the business, there won’t be a budget for it.
How do you convince your customer that their pain is not trivial, that it is catastrophic, and that it warrants a budget reallocation to solve this compelling issue?
Step 2: qualification + Metrics = success
Macroeconomic events mean the numbers are heavily scrutinised. Qualification of the numbers is where MEDDIC comes into its own.
As we discuss with our clients, continually qualifying every aspect of your deal with the relevant stakeholders in the business is essential. It keeps your communication relevant and keeps your deal on the table.
Keep asking questions
You need to qualify the pain you have identified with your customer to know how they feel about solving the issue. Until you qualify the pain with the customer, you cannot know if they even know they have a pain.
Let’s say they know there is an issue, but when you start to qualify the pain, they don’t assign enough importance to make budget available. What now?
Things change; keep checking the Metrics
To do everything you can in your deal, assign metrics that enable your customer to see both the cost of them doing nothing, and the benefit of them working with you. Work with your customer to validate the Metrics ensuring the summary calculations are credible and stand up to scrutiny.
That annoying little paper cut can be magnified with Metrics detailing:
- The long-term negative impact on their business.
- Their susceptibility to falling foul of regulatory changes.
- The financial implications of assigning personnel to deal with the symptoms of the issue.
Metrics can also be employed to show the following:
- The return on investment (ROI) of your solution to their issue.
- The time taken to see a positive effect.
- The extent of this positive effect.
Once you have identified a pain that warrants budget to solve, qualified this pain, and quantified it with Metrics, you’re halfway there. Unfortunately, halfway there doesn’t get a signature on the line.
Step 3: Economic buyer buy-in
When discussing issues with the budget, the conversation is only complete with the Economic buyer.
Remember: an Economic buyer owns P&L. If your ROI is good enough, they will be interested in implementing your solution to see that return.
With the above in mind, this means the Economic buyer is someone who will be assigning budget to your solution. Even after you have completed steps 1 and 2, if you haven’t identified and confirmed the budget with them, your deal won’t have the best of foundations.
By now, you will have identified and be well on the way to building your Champion. If this person really is a Champion, they will work with you to get your deal in front of the Economic buyer.
A common issue with many stalled deals is that the person you think is a Champion isn’t a Champion.
The trick here is to assess your Champion as dispassionately as you can. It’s difficult to conclude that they are the wrong person when you have been working and building a relationship with a person you think is your Champion. But if they aren’t, the sooner you find the right person to get your deal over the line, the better.
Always remember: there will be a Champion for all significant purchases (just because you don’t have a relationship with them, doesn’t mean they aren’t batting for a new solution—it may or may not be yours).
Keep qualifying
If you are told that there is no budget for your deal:
- Reassess your customer’s pain.
- Find the right Metrics to qualify and quantify the pain to ensure it warrants budget spending, and if your pain is just a paper cut, then qualify out and move on to another opportunity where the pain is acute.
- Requalify your Champion to ensure they will help you get your deal over the line.
- Make sure you get Economic buyer buy-in.
It might take time to go through these steps, but by the end you’ll know whether your solution is beneficial enough to have budget assigned, or whether the best option is to qualify out. Either way, these extra steps are worth it.
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