Most B2B technology companies who are closer to start-up than mainstream maturity will likely have a product/solution that is innovative in some way with the aim of disrupting their target market. If it isn’t innovative/disruptive then why bother?
What that then means is that it is highly unlikely that a budget will exist within companies you’re targeting. By ‘budget’ I mean a line item in the capital expenditure plan for the current year that they can procure your solution against.
It may be that your pricing level is sufficiently low that it can be ‘expensed’ within the business and sneak under the radar. But, what if it’s not? What if your pricing is going to require significant capital expenditure? Do you have to wait for a future financial year when you can formally exist as a budget line item? Sounds ‘commodity’ doesn’t it?
The good news is you don’t have to wait, in fact, don’t wait. You don’t need there to be a budget for you to successfully close your deal. Let me explain…
‘No budget’ is good. That should be your mindset. If there’s a budget, there are competitors and plenty of them competing on feature/function/price. Now, let’s say you have generated a lead; the company looks great; you have an initial conversation, maybe a demo, and there’s interest but no budget.
Your first job is to figure out what ‘no budget’ means. Is that your contact’s way of saying they’re not interested? You have to figure out exactly how to ascertain that. Ultimately you need to develop a ‘coach’ who can help you sell your solution internally. Asking your contact who else you should be meeting with, how you can help them promote your solution internally, how the adoption of your solution impacts them in their role, are all ‘coach’ type questions and if you’re continually blanked you might want to accept that you haven’t explained the value well enough for them to be sufficiently interested to move forward. Yet. Always remember that the timing may just be off so figure out how you nurture their interest until the time is right.
However, if ‘no budget’ really means your contact just doesn’t have budget available for a purchase right now then that’s not a deal stopper, it’s surmountable and you can help your contact move this forward.
Firstly, the CEO of any company always has a war chest whether for contingency or special projects of some kind. Can your deal be the recipient of these war chest funds? That depends on the value you deliver and whether it would be enough to get on senior management’s radar. If it doesn’t, and as we already stated, you may still be able to close the deal as an expense item.
The second criteria you would need to meet to get access to the war chest is whether or not you could be classed as a special project. Each and every CEO will classify these differently but think of them as left field projects that are unforeseen yet could have a significant impact on the business. Might your project fit here?
Researching the business and enlisting the help of your contact/coach is the only way to understand this and again the company focus (and CEO goals) may be 100% focused on X when you deliver Y. That’s the end of that. Not necessarily.
This is a real example from the early days of predictive analytics. The company I worked for sold predictive analytics solutions and one application/opportunity was a predictive fraud solution for insurance companies. The idea was simple in that the software could score new insurance claims for fraud at first notification of loss (FNOL) – the first call the claimant makes to the insurer to make the claim.
What could be easier to sell than that? Except our target company had no budget for the fraud solution and the CEO was 100% focused on customer satisfaction. Well, the account team together with their internal coach presented the following scenario to the CEO…
At FNOL the system can categorise each new claim as:
- definitely fraud
- definitely not fraud
- not sure
Those claims that were scored as definitely fraudulent would be passed directly to the fraud team, those where the systems couldn’t definitely say would be treated as normal at that time (more information needed), but those that were scored as definitely not fraud could be settled there and then at FNOL, thereby, delighting customers and driving customer satisfaction upwards.
This is impossible to do without a good coach in the company and your ability to develop that relationship is a good leading indicator of the value your solution will deliver, assuming you’re speaking to the right person, of course, but that’s a whole other conversation.
So, if you’re a founder and/or running a start-up and your sales person tells you there’s no budget, hopefully this post will provide you some background as to how the rest of that conversation should go.