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Quiz: How to Handle a Hot Prospect

SCENARIO: A prospect comes to you with well-defined need and states that there's budget money allocated to address that need. The prospect shares with you that money is tight and there's no guarantee that the money will actually be spent, that that he's been talking to other vendors. However, the prospect's need appears to match almost exactly what you're selling.

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The correct answer is: Help the prospect define the financial impact of not buying.
Here's why. The key issue is not whether your customer needs your offering. Heck, the customer already knows that. The key issue isn't the competition either, because you don't know whether the opportunity is real for you or for them.

The real issue is whether the need is significant enough, in terms of dollars, for the company to spend dollars to address it.

For example, an engineering firm using a decade-old CAD system might know that their engineers might be more productive with a modern one (that's the need). And they may have dozen of engineers digging around to find the best new CAD system to buy.

But until that firm's management knows whether an upgrade would save $100 a day (no big deal) or make it possible to earn new business that's worth $10,000 a day (doubling revenue!!!!), there will be NO decision to buy, and no money spent.

Why? Because EVERY company has needs that exceed their total budget. The budget gets spent on those needs that have the highest financial priority. Always.

It's a waste of your time and energy to pitch your offering or define a solution or position against the competition, unless the prospect is going to spend the money. And the best way to ensure that actually happens is establish full financial impact -- right up front.

In addition, figuring out the financial hotspots will help you position against the competition, because you'll know which of your product's unique capabilities are of high value to the prospect.

Here's a post that can help you define the full economic value of an opportunity: "How Much is Your Solution Worth?"

The insights in this post are based on a conversation with Mark Sellers, author of the excellent book "The Funnel Principle".

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