How do you respond to the prospect’s last-minute objection, “The budget’s been cut”? Is it a real objection or just a smokescreen to cover up a different problem? The “budget’s been cut” objection is an easy way for a prospect to avoid a commitment and get rid of a salesperson, and it’s a frustrating objection for the salesperson to counter. Selling Power asked John Russell, marketing consultant for Midwest Family Broadcasting in Madison, WI, and Nicholas Brezonik, area manager for Nuance Communications in Minneapolis, MN, for their views on how to deal with this situation.

“By the time you hear this objection, if you haven’t anticipated it you’re in for a challenge,” says Russell. “Be prepared for this objection and take steps to prevent if from even happening in the first place.”

Russell believes that the first step is to do your homework and try to ferret out if this really might be a legitimate objection.

“If you are going to invest time calling on a new client, do your homework first,” says Russell. “If this is a real objection, you can often overcome it before it comes up by asking the right questions early in the selling process.”

Russell systematically works to uncover the needs of his clients by using something called “System for Success,” in which questioning and financial analysis are used to design custom advertising programs.

“System for Success is a question-answering and information-gathering system developed by Midwest Family Broadcasting to uncover the needs and wants of our prospects and clients,” says Russell. “It also features a financial analysis that allows us to design our radio products and identify the customer’s investment up front.

“If the client’s objection is genuine and you have established value and discussed return on investment, you should be able to get funding allocated in the budget planning cycle,” says Russell. “If, after qualifying the buyer for purchase and budgets, you are still stuck with the no-budget objection, it’s a false objection. You need to return to the early stages of the selling process and ask more questions to probe for the real reasons.”

Russell advises salespeople to remain positive in the face of a no-budget objection, share success stories with stubborn clients and prepare ahead of time to face this specific objection.

“Maintaining a positive attitude moves your selling process in a positive direction,” says Russell. “You wouldn’t be hearing the no-budget objection if your prospects weren’t interested in what you have to offer.

“Learn a success story well and share it with your prospects,” adds Russell. “It makes them feel good to know you’ve run into this type of challenge before. Point out the benefits the customer received by finding room in the budget and making a purchase.

“The best way to prepare for these sales surprises is to plan for them and practice,” concludes Russell. “Taking time in sales meetings and on your own to review your strategy and role playing the questions and answers allow you to overcome the budget-crunch situation.”

“Because I sell a high-involvement, expensive product, I seldom run into the ‘budget has been cut’ objection,” says Brezonik. “When salespeople do run into this objection, it’s an indicator that they havn’t qualified their prospects enough and are most likely selling at the wrong level.

“If you’re at the right level and talking to the right person, money isn’t really an issue if you can cost-justify it,” says Brezonik. “If you’re at the project manager or analyst level, you better have all your paperwork and data together. If you don’t, chances are you may run into the budget objection. Obviously, they have no control, and you need to get to the person who influences or actually controls the budget.”

Brezonik says that gaining access to the right person sometimes can be difficult, and it’s important that salespeople give the prospect a cost-justifiable reason for going with their product.

“Sometimes it’s tricky to go around the person you’re currently dealing with to get to the true decision maker,” says Brezonik. “Take advantage of your own senior management to gain access and use higher-ups to get to higher-ups. For example, ask one of your senior VPs or your CEO to call and set up an appointment. The higher up in the organization you are, the better chance you have of not getting the ‘budget’s been cut’ objection. You won’t find a high-level officer of a company saying he doesn’t have the budget.

“Involve your prospects in the process and give them a compelling return on investment,” notes Brezonik. “Be creative and incorporate transaction-based pricing, such as deferred billing. Once they actually buy into your concept, they’ll find the money in the budget,” he concludes.