As published on Forbes.com
Jamie, the CEO of a technology company, approached me for help to figure out why his company could not grow beyond their existing level. His company was struggling to maintain their profit margin. They also found that their sales cycles were taking much longer than they could tolerate. Finally, they were frustrated that their clients had a lackluster sense of urgency when it came to engaging Jamie’s company. The first thing I did was to ask my client’s team some questions.
What Information Do You Collect In Client Meetings?
To help uncover the root cause of the challenges faced by Jamie’s company, we discussed how each team member approached their business meetings with clients. I asked Jamie’s team what questions they asked in client meetings. We discovered that each rep had their own unique questions they asked clients. Had Jaime’s company not determined what information their reps should be collecting from clients?
The single most common question they each asked was “What is the customer’s budget?” I have the honor of working with professionals across industries to grow their businesses and create a sales culture within their organizations. The budget trap is one of the most common mistakes in B2B Selling.
Avoid The Budget Trap
Many assessment tools penalize a sales professional if they do not ask about budget. Budget, in fact, is a component of a long-standing method of qualifying opportunities in sales situations. The acronym BANT stands for Budget, Need, Authority, and Timeframe. I don’t know who invented it, but I first heard about BANT when I was the CEO of an IBM business partner company. Maybe someone at IBM was the inventor. Here is why BANT doesn’t work anymore.
I asked Jamie “How much is your typical solution?” They said their typical solution is $50,000. I then asked them “What if your client told you they had a budget of $80,000?” The reps said, “That’s a good opportunity. They have more than they need for our solution.” I then asked “What if they said they only have $39,500 to spend?” The reps almost immediately said “If need be, we can sell it for that price.” Notice how that works. With excess budget, the reps felt confident. If the customer had insufficient budget, they immediately thought about discounting. Budget gives misleading information. What about the other elements of BANT?
When BANT was invented, I’m sure that there was a clear “decision maker” for most decisions. Today, many individuals might have supposed authority, but the best run organizations have learned that their teams need to “own” the project. This means that leaders strive to build consensus within their team. This means that although many team members cannot say yes, one or two detractors can say “no.” Authority, as a result, is a bit of a distraction from the real reason for making a business decision.
Needs will always be part of valuable qualification. Too often, however, professionals will mistake desire for need. Just because your potential client would like something, does not mean they have sufficient consequences of not solving the problem. I refer to this type of qualification as Issue/Impact/Importance or I-3.
For example, if you sell IT maintenance services, a superficial need would be “We need to switch IT Vendors.” The I-3 example would be “We need to switch IT vendors. Our systems have been down so often that we are losing revenue because we can’t do our work. If I don’t find a solution soon, I’ll be out of a job.” This example shows the issue (switch IT vendors) along with the Impact (losing business because they can’t do their work). The Importance is that the person involved fears a horrible consequence if they don’t solve the issue.
It used to be that timeframe was asked in the following way “When would you like to have the solution in place?” This is a great question, but a secondary question uncovers the real truth. Once you get an answer to when they would like the solution, you then ask “Why that date?” Then, for extra credit, ask “What happens if you don’t achieve your goal by that date?” This is the I-3 equivalent for Timeframe.
Think about your most successful deals. Were they successful because the client had budget waiting to spend. Or, did you have a discussion that made it clear why the customer needed to solve the issue? If the client believes that their issue has enough impact and is important enough to solve, they’ll find the money whether or not it was budgeted. If you qualify using Issue/Impact/Importance, then budget becomes unimportant.
In both Same Side Selling and Upside Down Selling, you can read about success companies that qualify based on Issue/Impact/Importance instead of BANT to achieve incredible growth while pursuing fewer opportunities.
What Questions Should You Ask
Capture four quadrants of information: 1) Issue (the superficial description of the problem); 2) Impact/Importance; 3) Their envisioned Results; and 4) Who else is impacted by the issue and the eventual solution. Put each of these on a sheet of paper with one in each corner. During each meeting, you’ll quickly identify where you might need additional information.
It’s Your Turn
Share a story about when a client had budget that disappeared. Or, share an example of when the Issue had enough Impact to allow the customer to find the money without a defined budget.