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May 2011
Issue: 52

 

 

"It isn't in the Budget"

&  

Cold Calling 

     

Dan:

 

I sell a software solution to physicians and hospitals to help them monitor employee benefits. Our solution is a web-based, SAAS (software as a service) solution. There is an excellent demand for our offering as it helps clients reduce costs. The trouble is that when I am cold calling for leads I almost always face the "It isn't in the budget for this year" objection.

 

Maybe you have some TTS best practices to share for improvement in my success rate.

 

Sally

Denver, Colorado

 

Sally:

 

Great question. I believe I can help.

 

First of all, as to the practice known as "cold calling", I propose that the phrase does not apply to "Superstars". Cold calling is for average reps, which I call "dialing for dollars".  Superstars know that it is just not a very good use of their valuable time. If we are going to label the process, however, I suggest it be called "high quality prospecting". There are better ways to fill the funnel with high quality prospects. 

 

On one end of the spectrum there is cold calling for leads. On the opposite end there is a high quality referral from a very satisfied customer.  As you traverse along the spectrum of prospecting ideas, consider the following.  

  • Expand The Pie Strategy: You may find it a better use of your time to contact existing customers and use an "Expand the Pie" strategy with them.
  • Leverage Partners: Look for complementary products or services and establish a formal or informal strategic business partnership with them.
  • Help Them Come To You:  Make use of tradeshows. Conduct a "special event" lunch, breakfast or dinner by invite-only, announcing a hot topic related to your product offering.
  • "Warm Calling":  The most difficult prospecting option is to proactively reach out to prospective clients. This is very heavy lifting, but there is a way to dramatically improve your chances of success. You will not "cold call", but rather "warm call". What do I mean by this? Simple. Never, ever, contact a prospective client without first doing your "homework". What is that? It includes digging up everything you can about the prospect. Remember one of our favorite quotes: "Failure to Plan is a Plan for Failure".  Make use of the many free and for-sale resources available as you can. How much? As much as you can. You will find that there is a direct correlation between the amount of research you do and the quality of your prospecting results.

Why is it so critical for you to conduct your research and make it a warm vs. cold call?  It permits you to open your call with a very simple but powerful statement. It sounds something like this, "Hello Jim, this is Dan with Adams & Associates. I have spent a great deal of time researching your company and the key initiatives of your CEO, Brenda Thompson. I noticed that you have a key initiative related to cost reduction. We are working with A, B, and C (highly credible companies in the same industry) to tackle that same challenge. We have had excellent results. I would like to get your opinion on what we are doing for them. I will be in your area next Friday. What time would be best for you?"  TTS workshop attendees and subscribers to the TTS newsletter will recall that I call this simple but very powerful approach the 3-R's™.  

 

I hope all of this is of use to you. Now let's discuss your second question about the objection "It's not in the budget this year."   

 

When facing this objection, it is very helpful to understand how companies and budgets work. All but the smallest companies operate using a budgeting process. It starts months before the actual need for the funds is required and allows all departments to submit a wish list for all the key expenditures they desire for the following fiscal year. Invariably, there are many more budget requests than available funds.  It is the CFO's primary responsibility, working in conjunction with the other key senior executives, to develop a process to strategically evaluate all requests. In some companies this is called a "toll gate process".  The projects must pass many toll gates in order to receive ultimate approval. 

 

Once approved, the line department managers receive their marching orders to spend money on the items that have been approved. They are told that no deviations can be made.They in turn tell you the same thing: "It isn't in the budget this year."

 

Here is the secret that Superstars know: budgets are chiseled in stone if you are a mid-level line manager.  But they are sketched in pencil if you are a senior executive. Why? Think of it this way. Let's say you have received "budget approval" from the CFO of your household (your significant other) for a new hot tub this summer. You have the funds. They have been set aside in your money market account or you have received the financing. You are ready to pull the trigger. Then you are presented with an opportunity to get a super deal on a hot, low-mileage car from your relative. What do you do? You do exactly what senior executives in companies do all the time; you reshuffle priorities, cut the budget for the tub, and pull the trigger on the car.

 

So, here is what you will remember about budgets:  

  • Budgets are chiseled in stone if you are working with mid and lower-level customers.
  • Budgets are sketched in pencil if you are working with senior-level executives. Remember the key: you can persuade your executive to cancel or reprioritize other funded/budgeted projects. This is accomplished by converting the features and benefits pitch used by average reps into powerful, customized business-case solutions that will strategically impact one of the key initiatives of your client.
  • A word of caution for those of you who are working on projects that are budget approved.  The fact that a project has been given "budget approval" means nothing. It is always in jeopardy of being cut as a result of other priorities or business slowdowns.

So Sally, if you want to minimize being "hit" with the "It isn't in our budget" objection you need to:

  • Stop cold calling and start warm calling.
  • Leverage relationships with key partners.
  • Use tradeshows and sponsoring events that are related to your offering that your clients will find valuable.
  • Make use of the 3-R's and call higher in the organization. Once in, strive to develop a customized business case that will strategically impact one of their key initiatives.

Good Luck, and Close 'Em!

 

Dan Adams, Adams and Associates

  


P.S. For Dan's previous TTS Newsletters click HERE

 

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Daniel Adams
Adams and Associates
532 Walker Road
Hinsdale, IL 60521
630-215-5090

Email: [email protected]

Web:  www.trusttriangleselling.com


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