Strictly Sales Episode 12: How to Get Past the “No Budget” Objection

If you’re a salesperson, getting rejected is a daily occurrence. Yes, you have to get used to it, but that doesn’t mean you have to like it, or settle for every “no” your prospects throw at you. In fact, many of the most common sales objections aren’t as final as you might think. As sales educator Jeff Hoffman explains, with the right reaction, you might be surprised by how often you can turn any excuse into an opportunity.

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Key Takeaways

  • People tend to diffuse the responsibility for their objection by using plural pronouns. This usually means they don’t have the authority to tell you their department has no budget.
  • Leave budget alone. Find a way to ask questions about something else so they can’t push you off the call.
  • Figure out what “We don’t have the budget” actually means. The term is broad and meaningless, so call them out. They won’t want to look like they’re fooling you or they’re full of it, so force them to defend themselves by getting specific.

“If it’s what I would consider to be a false objection my goal is not to deal with it. My goal is to side step it and continue talking.”

— Jeff Hoffman, M. J. Hoffman and Associates

Transcript


Announcer: This is Strictly Sales with Jeff Hoffman and CeCe Bazar. For more information go to OpenView Labs or MJHoffman.com.
CeCe: Thanks for tuning in to the Strictly Sales library here wiki for all your sales questions and objection handling. We are joined today by Jeff Hoffman to talk a little bit about budgets and your clients. So Jeff something that people here especially when they’re prospecting just as an objection right out the gate is “Oh we have no budget for that.”
Jeff: Right. Right. Well it comes up at different times and I think where it comes up in the sales process is going to dictate the way you handle it. If it’s a serious question around budget, it’s generally going to require more than a short answer but we tend to hear that a lot early if it’s really not so much around budget but a way to kind of outbox us.
CeCe: Totally.
Jeff: And for that I think we need to have some good tools.
CeCe Bazar: So let’s jump in a role play on how exactly we might be able to handle that.
Jeff: Sure. I think right away so we can do it and I’ll give you a couple of examples so why don’t you fire at me with the budget question.
CeCe: Thanks so much for your call Jeff but actually we don’t even have budget for that right now.
Jeff: I’m sorry. Who’s we?
CeCe: The entire marketing organization. No budget.
Jeff: Time out. Now one of the first things I do with weird objections is I isolate the plural pronoun. You said… You said we and I said who’s we? Because when people give objections in the plural, we, our, they, they’re diffusing responsibility for the actual objection which we don’t let them do.
So we both know the person you’re talking to doesn’t have the authority to tell you that the entire marketing department doesn’t have budget. That’s absurd. So by saying we. Now if she said I don’t have budget, I would do something else. So we’ll go back and you can say your answer again. I’m sorry. Who’s we?
CeCe: The marketing organization.
Jeff: So this is my first call to your company and I know very little about your structure. How many folks are in your marketing department?
CeCe: We have seven people in marketing.
Jeff: Okay. Does that roll up to a VP of marketing?
CeCe: Yes. We have an interim VP of marketing right now.
Jeff: What do you mean interim?
CeCe: We have a person that’s kind of stepped in the role for about a six-month window until we find a new VP.
Jeff: Oh okay. The person who has stepped into the role, were they previously on the marketing team in a different function?
CeCe: Yes they were. Yes.
Jeff: How did you guys pick this person to keep the seat warm?
CeCe:    The CEO made that decision.
Jeff: All right. Time out. So what am I doing here?
CeCe:    You’re getting tons of information.
Jeff: And we’re off budget. We’re far away from budget. I’m leaving budget alone.
CeCe: I love it.
Jeff: You used budget as a way to get me off the phone and it didn’t work. That’s basically what just happened.
CeCe: All right. So what if this person was the CMO or was the VP of marketing?
Jeff: Yes. Okay. All right in this case we’ll say that… this person would say, “I don’t have budget.”
CeCe:    Yes.
Jeff: Okay.
CeCe: Thanks Jeff so much for the call but I don’t even have budget for that right now.
Jeff: What do you mean by you have or haven’t budget?
CeCe: We’re getting close to the end of Q2. I know where we stand. I just looked at all the number and I don’t have budget to bring on any new vendors at this point.
Jeff: Understood, but you have budget for existing vendors?
CeCe: Yes.
Jeff: Now how does it work if you don’t spend all that money this quarter? Stop. Now what’s happening?
CeCe:    Now you’re getting further and further away from budget but you’re figuring out what you do with the leftovers.
Jeff: See no one is going to say to you with just a couple of questions, people are not going to hold on to the… the “I don’t have budget” is so broad and so meaningless. I don’t have budget doesn’t mean you don’t spend money. It just means something else.
We’ve got to figure out what that means and you’ll find very quickly what happens is because this statement, “I don’t have budget” is so outrageous and so few sales reps call them on it that when you do, they don’t want to look like they’re fooling you, they don’t want to look like they’re full of it, so they’re going to defend it and the only way they can defend it is to get specific.
In this case, you got specific by saying our end of quarter, nothing for new vendors. So you’re giving me much more detail than what your objection was and now that gives me all the places I need to go to find out things.
CeCe: So do you generally when you’re closing out these types of conversations how do you leave it? How do you close it so that you can kind of move on to the next stage in the buying cycle?
Jeff: You know we want to be careful here because we don’t want to treat objection handling like a flow chart because there’s a variety of places that we can go.
CeCe: But think of it in another way.
Jeff: If it’s a real objection then you have to deal with it.
CeCe: Right.
Jeff: And you have to get in there and roll up your sleeves and really work but if it’s what I would consider to be a false objection whether the objections are given are the early calls, my goal is not to deal with it. My goal is to basically side step it and continue talking.
So in this case you know I’m going to be doing more listening than trying to pitch just trying to find an opportunity. Look we’ve just learned in the first role play that there is an interim VP but they’ve selected him or her based on some qualities and I’m probably going to use this call to drive toward an introduction to this and this idea around budgets.
What happens with money that isn’t spent on existing vendors or probably going to spin that into something around, “Well how does one become a vendor from a procurement standpoint? Are you saying that if there’s a vendor you haven’t used in four years but if they raised their hand and you wanted something from them you could buy something from them this quarter even though they’re existing in your database but not really existing as far as recent. I mean how far back do you go to make it a vendor? How can I get on the vendor list?”
CeCe: Right.
Jeff: You know there’s all kinds of… I don’t want a rep to hear this and think if the customer says A, C, D, the customer says B, C, C. What you want to think about is, there’s probably some really… you want to have that great sense that diffuses the bomb and gives you a little more runway to keep talking.
CeCe: I think that from now on anyone who’s listening to this can no longer use budget as an excuse on your first call.
Jeff: Nope. Yes, I hear you. Ultimately, the only way for this call to end abruptly is for a person to say, “I’ve got to go. Good-bye” and hang up or “Don’t call me.”
CeCe: Exactly.
Jeff: Anything short of that I mean…
CeCe: It’s fair game.
Jeff: Well sure. I mean we’re adults and they say something and I listen. I don’t… you said you don’t have budget. I don’t know what that means. I don’t ask for permission. You brought up budget. Not me. I didn’t bring up anything about budget. You did. So I just have questions about it.
CeCe: All right sales reps. This is exactly what you need to be doing and exactly what you need to be listening to. Make sure to check out our next Strictly Sales library podcast soon. Thanks Jeff.
Jeff: You’re very welcome.
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Image courtesy of Jacob Edward

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