No salesperson should ever be afraid of objections. Learning how to overcome objections, like the “no budget” argument, should be at the heart of your sales skills toolkit.
Savvy salespeople know that a large chunk of their prospects won’t ever become paid customers. That’s just the ‘biz.
But by the time a prospect says, “I have no budget,” top salespeople know what to do. They know the meaning behind a “no budget” objection differs for every client.
Having completed hundreds of successful sales calls, they have learned not to take the objection literally and focus on the actual cause behind the objection—i.e., lack of trust, lack of perceived value, or simply that the prospect isn’t the right decision-maker.
Read on to discover how expert sales professionals deal with these common objections and how you can improve your approach.
Don’t let ’em stop you.
To figure out how to handle the “I have no budget” objection, we asked nine leading sales professionals to share their best tips and tactics.
First, acknowledge that you understand what the prospect has said and recognize its validity. Then, tell them, “I understand. A few of my customers have gone through their budget quickly this year and are trying to get approval for an additional budget.”
The pros call that initial statement a neutralizing statement. Then you can immediately follow up with a high-impact question such as: “What is your annual budgeting process?” or “How do you determine which initiatives get priority for funding?”
These questions validate that the prospect’s statement is recognized and understood. However, when you respond with a statement that seemingly agrees with the objection they just made, they are likely to detect that you actually empathize with their goals, which allows you to turn an objection into an opportunity to ask a powerful question that will get you additional information. They may even share with you what it takes to get additional funding.
The info you get from the questions can help you undo the objection. At a minimum, you can ask additional questions, which allows you to continue to guide the conversation forward.
Anita Nielsen, President at LDK Advisory Services
For an in-depth lesson on high-impact questions, watch Anita’s BOUNDLESS 2021 session, “Discovery Questions That Would Make a Shrink Jealous”
I recommend getting into the pricing and budget discussion at the start of the initial qualification call. This way, you can get ahead of any pricing objections that might come after the prospect sees the value of the product or service you’re selling.
There will always going to be companies (like startups and small businesses) with firm budget-related objections, but it’s usually easier to identify these early in the sales process if pricing and budget are discussed first.
Once the objection comes up, it’s best to show how your service can solve their problems and prove value/ROI before leaning on a discount to overcome it.
You can provide references from current customers in the same industry or any customer who might have a similar use case and show how your service has helped them.
If your product or service is priced similarly to or below most of your competitors, you should have an analysis available to show that. If cost is the main objection, you can always offer a short-term discount or even a free month of usage to help get them over the finish line and see the value your service provides before they fully commit.
Jared Knotts, Lead Account Executive at Nutshell
Define your ideal customer and ProspectorIQ does the heavy lifting, so you can add new contacts to your CRM and start making more sales!
In Enterprise sales, the objection is typically attributed to missing the following qualification criteria.
Jon Boyer, Enterprise Sales Leader at Slack
There’s one thing you should not do. You should not say, “Show me the money,” like Jerry McGuire. That will not get you a demo. When I get the objection, I address their concern about the budget while taking out the monetary part and focusing on making them understand my product’s value. I clarify that the purpose of the first demo is to educate them on the product’s value.
Once I jump on a call, I thank them for being upfront with me. Then, I acknowledge they don’t have the budget. But then I say, “I see a lot of people allocate their resources for something they see as valuable. And just based on your website and my research, it looks like you guys would be a great fit for our platform.”
Morgan Ingram, Director of Sales Execution and Evolution at JBarrows
Related: “The New Rules of Prospecting”: Morgan Ingram’s top tips for breaking through the noise and generating more leads 👇
To me, this question all comes down to doing proper discovery early in the process. I need to understand exactly how much of a problem they have and what it’s costing them. To get there, I ask questions like:
If it turns out it’s costing them money, I ask them: “what do you think would be a reasonable budget to solve that problem for you?”
If they come back and tell me they have no budget, I refer back to the earlier discussion and say, “I’m not in a position to tell you how to spend your money, but if I had a problem that was costing me X and someone was offering me a solution that costs far less than that, it would seem reasonable to me to figure out a way to find the budget, am I missing something here?”
If you have a reasonable prospect they typically will follow your logic and agree with you. If not, typically you’re either talking to the wrong person (i.e., not the budget holder), or you’re talking to someone that’s unreasonable.
Mark Stoddard, VP of Sales & Marketing at ClientSuccess
For more of Mark’s advice, watch his BOUNDLESS 2021 session, “How to Supercharge Your Growth by Mastering Customer Retention” 👇
People don’t mind buying things; they just don’t like being sold. People’s first reaction when we’re trying to sell them anything is typically to pose some objection. One of the things that I like to do is determine if it’s really an objection or just a reflex.
People want to make money, save money on expenditures, and save time. So if someone throws an objection, one of the first things that I’ll do is say “What if my product could save you time, money, or help make you money?”
I prefer to pivot the conversation or refocus on something that I can help them with. Most people can’t resist that response because everybody wants to save time and money or make money.
You can sometimes bring up one of the prospect’s competitors and try to prove that they are using your product or service and that they are finding great success with it. Using stories really helps to sell.
Finally, I like using an objection cheat sheet. “I really respect that you don’t have a budget right now, but what I’d love to do is give you the information so that when you do have the budget, you won’t have to research. You’re already going to have all this information in front of you.”
You’re just trying to keep them in the loop. And most people are pretty cool with that.
I also prefer to establish next-steps before getting off the call. Since they might not open a follow-up email, try to give them some information immediately or set up a demo while I’ve still got their attention and consideration.
Ryan Dohrn, President & Founder at Brain Swell Media; see more of Ryan’s budget-objection advice in this video. 👇
Prospects are far more likely to buy when they’ve heard of you before. This step-by-step outbound campaign template shows you how to get on your contacts’ radars before you start dialing.
Focus on answering a question, adding value, and asking a question to steer the prospect in the direction of thinking about how we can optimize their business practices.
For example, you could say: “I totally get it—most companies I talk to work on tight budgets. However, the reason why companies switch to us is to increase revenue, and often on the first call, we can determine what the ROI would be. What are your thoughts on scheduling a 30-minute call to see if this is worth adding to the list of software to evaluate for 2021?”
Rachel Hammond, Director of Sales at FastSpring
Be sure that you’ve established the cost of their challenges before asking for a budget. How much is it costing them right now for not actually solving those challenges?
Then, tell your prospect “In order to solve the problems that you said costs you, for example, around a million dollars, what could you see investing in this project?”
If there’s still no interest, it’s time to pull out the range. The range sounds something like this, “In order to accomplish what we discussed, I can tell you that we’re going to be somewhere between a hundred thousand and $400,000. Where on that range, could you see yourself investing now?”
What’s amazing is that once you throw out some numbers, they are very likely to share with you a specific number.
Finally, don’t leave until you have established a budget. You have a right as a salesperson to get on the same page with money before you put together a proposal. The key is to be totally committed to agreeing on a budget before you go to the proposal.
Marc Wayshak, Founder at Sales Insights Lab
When someone says, “I don’t have enough budget,” it can mean a lot of things. But simply “neutralizing” the objection doesn’t make the objection go away. What I do instead is elaborate to unearth the underlying meaning of the “no budget” objection.
Client: “We have no budget.”
Me: “No budget?”
And then I shut up. The client always elaborates. “Yes, we can only spend X on these projects because they fall under department Y.”
Then I know what the problem is. After that, it’s all about figuring a way forward.
Me: “So this project will only affect this department?”
If they say yes, I go into detail and try to get them to see the big picture, and eventually get a meeting with someone else from another department so we can unlock more money.
If they say no, we skip the “get them to see the big picture” part.
One size does not fit all and quite often the situation can be a lot more complicated. But a good rule of thumb is that you never make it worse by listening.
Jan Martínek, Head of Sales at Kupi.cz
Sometimes, it’s helpful to have a few sales script examples on hand as a guide for navigating tricking objections. The following three script examples demonstrate potential conversations you could have with your prospect or lead when the “no money” objection arises.
Use this script example to determine the extent of your prospect’s budget constraints and figure out how your solution can align with those while supporting their company goals.
Implement a sales script similar to this to find out the cost implications of the prospect’s current problem and open the door to discuss how your solution could save them money, improving their bottom line.
Consider the following script example if you reach an impasse due to the prospect’s current budget constraints but want to build a rapport in the hopes they will opt for your solution when the budget is available.
With these sales expert tips and script examples, you should be well on your way to handling prospect objections related to money and budget constraints.
No matter the situation, always remember that your first priority is providing your prospect with a solution. Approach every sales conversation with the objective of solving a problem and building trust rather than making the sale.
Want even more sales and marketing tips from our experts?
Signing up for our free Sell to Win newsletter!
Join 30,000+ other sales and marketing professionals. Subscribe to our Sell to Win newsletter!
Use our calculator to add up your total investment of CRM and Add-ons
VIEW ALL PRICING