Q:

Dan, my team is good at the BMPCC account qualification questions but I am thinking we can improve on the first question which is the Budget question. Can you give us some ideas?

Zach

Kansas City, MO

A:

Zach:

Great question. Thank you.

Most sales representatives have been taught to ask if a project has been budgeted, but only sales superstars know WHY that question is so important.

Let's dive deeper.

Most reps want to know the answer to the budget question for one reason. They want to be able to 'max out' on the purchase. 

The sales Superstar looks at the world differently. She needs to understand budgeting in order to learn exactly where the client is in his or her buying process. If the client does not have funds budgeted, that means the Superstar must step up to offer guidance, insight and assistance on the best practices for obtaining budget approval and/or accessing emergency funds.

In the context of helping the client with his or her budget requirements, a Superstar would help package the budget request with the following  Top Three Keys For Project Success as explained in our previous TTS Newsletter.

• A Passionate CXO or Senior Executive Sponsor.  Any major project should have a leader who is passionate leading the charge.
• A Critical Event Date & Key Milestones Tied To a Calendar.  A tight set of milestones attached to a timetable indicates that this is a well-planned, serious project set for success.
• A Strong, Compelling & Emotional Business Case.  All businesses have a fiduciary responsibility to spend the money of the corporation wisely. The Business Case helps a CFO determine which projects are sound investments. A sound investment is one which is line with the core corporate strategy and delivers stellar financial metrics. These metrics or "tollgates" are often represented in terms of ROI, TCO, Payback, NPV.

The client's fiscal year is also important to the budgeting process.  A Superstar who is responsible for the management of key accounts must know the fiscal year of each. It is important to note that the fiscal year is often not the calendar year. For example, many companies have a fiscal year which starts in April, July or October, such as the US Government. 

Financial reports, statements and BUDGETS are all keyed to the fiscal year.  In fact, the fiscal year is also referred to as the "Budget Year". 

The budgeting process starts approximately six months before the end of the fiscal year. Typically that is when the CFO and Finance team ask each department for its "Christmas List" of requests for the following year. That list is then dramatically reduced based upon the metrics established by the CFO. Those metrics typically include rational parameters such as the Business Case mentioned above along with emotional considerations such as the political power of the project sponsor and the emotional appeal of the project. Budgets are usually finalized and locked in about 90 days prior to the beginning of the fiscal year. The Sales Superstar is aware of this timeline and reaches out to assist the department executive with this process. Meanwhile, the average rep sits back and waits for the phone call from procurement stating that the budget for XYZ has been approved and a quote is needed.

Bottom line:

"If you want to understand why the CFO buys what the CFO buys, you must see the world through the CFO's eyes."

-Unknown  

Understand and help your client with his or her budgeting process!