Which Comes First: Solution, Criteria or Budget?
SCENARIO: You're STILL developing a complex B2B opportunity with a large company. You've met with several stakeholders and have identified a problem that your offering can address. And you've defined the economic consequences of that problem, so that the key stakeholders not only agree that the problem exists but agree upon the size and shape of the economic consequences.
You must now decide what to do next in order to ensure that you spend your time wisely. What's your best next move?
- APPROACH #1: Define a viable solution. Work with the prospect to determine an approach to solving the problem.
- APPROACH #2:Define decision criteria. Work with the prospect to understand how they'll make a buying decision.
- APPROACH #3: Define budget allocations. Work with the prospect to determine where they will find the budget for a solution.
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The correct answer is #3: Define budget allocations!
The reason is simple. A prospect who has does not have a budget will never be a customer.
Remember, you've gotten the stakeholders to agree that there's a problem that needs fixing, and you've got them to agree to the size and shape of the adverse financial impact of that problem.
However, the opportunity isn't really an opportunity (and doesn't deserve your time and energy) until the customer has committed some budget dollars to fixing the problem.
Until a budget is allocated, it's crazy to write proposals, make multiple business trips, or put the revenue from that "opportunity" into your forecast.
Instead, you you should focus on getting a specific budgetary commitment -- BEFORE you define a solution. (You can give them ball-park what a solution might cost, for planning purposes, but no more.)
Needless to say, that's a very different approach to the standard consultative selling model. In most cases, experts recommend customizing a solution early in the sales cycle and then selling the solution in order to get the budgetary commitment.
However, if you take that traditional approach, you're only providing free consulting and there's a very good chance that you'll get into an expensive sales cycle with a "customer" who never really intended to buy.
The above is based upon a conversation with Mark Sellers, author of the bestselling book "The Funnel Principle". Interesting guy.