John Holland of CustomerCentric Selling® makes an interesting point in a blog article. Many sales people who have been brought up on an over-literal interpretation of BANT may believe that the absence of a budget for a project should be a reason to disqualify an opportunity.
This may be valid in simple transactional sales, but in complex high-value discretionary B2B purchases our interpretation of the apparent presence or absence of a budget needs to be much more nuanced. Firstly, it’s important to distinguish between a project-specific formal budget and a source of funds that can be reallocated from other priorities.
As John points out, if there is no clear source of funding, it’s almost certainly a sign that we are operating at too low a level and that our current contact does not have the authority or ability to act as a power sponsor. If a project is important enough, a power sponsor will always be able to find the money (by shifting it from another pot).
Counter-intuitively, if a project-specific project budget does already exist, it may be a sign (and a warning) that another vendor is already making the running, and that they may have set the prospect’s expectations not just in terms of cost, but also functionality.
Of course, the budgetary figure might be the result of our own previous conversations with the prospect - in which case we may have established a certain advantage, although not one we can afford to be complacent about.
In his article, John suggests that managers need to ask the question “whose numbers were used to establish the budget?”, and this certainly seems a more effective approach than the traditional “is there a budget?” question.
Living in a post-BANT era
When you consider how discretionary projects are really funded within organisations, this line of thinking really hammers another substantial row of nails (as if any more were needed) into the coffin lid of “BANT” sales qualification.
It also ought to cause us to think laterally about other aspects of how successful projects get funded within organisations:
- They tend to be supported by a power sponsor who has the ability to redirect funds to finance his or her favoured projects and has the political skill to align all the other stakeholders around their preferred approach
- The winning projects invariably have a solid case for change that can be justified on both raw economic or financial terms and a range of other less tangible but nevertheless significant considerations
- Successful projects will typically have to compete against a range of different investment opportunities that may bear little or no obvious relationship to the project’s objectives
- At any point, up to the raising of a definitive purchase order, any budget assigned to any project is at constant risk of being reallocated to another currently more important investment priority
- The mere presence of a defined budget could - depending on the specific circumstances of the opportunity - have either positive or negative connotations
It’s clear, as John points out, that as sales managers we could and should do more in guiding our sales people. Instead of lazily asking them the obvious “is there a budget?”, we need to get them to answer these questions, as well…
- How is the project going to be funded?
- Whose numbers were used to establish the budget?
- Who is the prime sponsor behind the project and are they a budget maker (good) or a budget taker (bad)?
- Has a solid economic case for change been established (and did we help to guide it)?
- Are there equally solid non-economic reasons to pursue the project?
- What other projects are competing for funds, and what is this project’s relative priority compared to them?
- How are the final approvers going to decide which projects to give the green light to?
I hope that I’ve helped to illustrate how merely “having a budget” gives false comfort and is by itself a weak qualification criteria if these other factors are not properly understood or taken into account.
One month to go...
There is (at best) a month of practical selling time between now and the end of the year. How many “budgeted” projects are you still relying on to make your numbers? And what if any of my final list of questions above remains an unknown, or changes between now and the end of December?
Are you still confident that all those "budgeted projects" are really going to come in? I’d venture to suggest that some urgent requalification might be in order…
Thank you again to John for the original inspiration.
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ABOUT THE AUTHOR
Bob Apollo is a Fellow of the Association of Professional Sales and the founder of UK-based Inflexion-Point Strategy Partners, home of the Value Selling System®. Following a successful career spanning start-ups, scale-ups and corporates, Bob now works with a growing client base of tech-based B2B-focused high-growth businesses, enabling them to systematically establish their distinctive business value in every customer interaction.