No salesperson should ever be afraid of objections.
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. Having completed hundreds of successful sales calls, they have learned not to take the objection literally, and focus on the real cause behind the objection—i.e., lack of trust, lack of perceived value, or simply that the prospect isn’t the right decision-maker.
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.
Don’t let ’em stop you.
Neutralize the objection
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.”
That initial statement is what the pros call 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.
For an in-depth lesson on high-impact questions, watch Anita’s BOUNDLESS 2021 session, “Discovery Questions That Would Make a Shrink Jealous” 👇
Raise the objection before the prospect does
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 are always going to be companies (like startups and small businesses) that have firm budget-related objections, but it’s usually easier to identify this 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 this objection.
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.
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Qualify the prospect based on strict criteria
In Enterprise sales, the objection is typically attributed to missing the following qualification criteria.
- Pain: Throughout the sales cycle you should be actively quantifying pain and seeking to understand the consequences of staying in the status quo. If you don’t quantify pain in your customers’ KPIs—such as lost productivity, time to revenue, and cost savings—you should, because you can use it as an opportunity to go deeper and ensure your solution is tied to your prospect’s largest business objectives and problems.
- Economic buyer: Confirm you are working at the appropriate altitude within the organization and that your buyer is a decision-maker. Ensure you have not mistaken a champion as the final decision-maker. If you are not working with an economic buyer directly, prioritize working with your champion to secure a direct conversation. Once you secure access to the decision-maker, confirm their objectives and initiatives, and seek to understand their level of sponsorship on your solution.
- Budget: Last year, many organizations had low financial performance due to the pandemic, which negatively impacted their cash flow. If this is the case, brainstorm with your prospect various ways to address the issue, whether it is creative payment terms or the reduction of products and services.
Focus on the value, not the money
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 focus 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 that they see valuable. And just based on your website and based on 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 👇
Find their problem’s financial cost and offer something cheaper than their current solution
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’m asking questions like:
- Sounds like this is an issue for you, do you think it’s actually costing you money?
- Is it just a minor annoyance that you need to put up with?
- What’s your best estimate of how much it costs you?
- Does anyone else know about this?
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 cost 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” 👇
Focus on how your solution helps the prospect save time or money, or make them money
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.
Help the prospect and add value to their lives
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?
Clarify the problem’s cost
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.
To discover the real problem, stop talking
When someone tells you they 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.
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
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