“Our budget has been slashed!” Big deal, or big lie?

“Our budget has been slashed!” Big deal, or big lie?

Written By Jeffrey Gitomer

KING OF SALES, The author of seventeen best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His live coaching program, Sales Mastery, is available at gitomer.me.


“Our budget has been slashed!” Big deal, or big lie?

You’re well on your way to a huge computer sale. All approvals are in. Just a matter of time until someone from IT calls with the good news. The phone rings. “Hello, Bill, this is Randy from Acme Building Supplies. Uh, listen, I know you’re expecting the order, but we just received word our budget’s been slashed. We have to put this purchase on hold.”

Rats! Now what?

“They were my biggest sale, Jeffrey” you cry. “I already had the money spent. Now I won’t make “President’s Club.” Wah! Wah!

Typical sales response: whining instead of thinking.

First, in most cases when the prospective buyer says, “Our budget has been slashed,” this “buyer” isn’t telling the truth. “Our budget has been slashed” is a quick “bug off” answer.

Also, when the buyer tells you the “budget has been slashed,” this person is NOT the decision maker. The person who makes the decision is not the person who SPENDS the money in the budget. The person who makes the decision is the person who MAKES the budget. The budget was slashed by somebody-and that somebody was the decision maker-not your prospect. Wake up and smell the pop tarts.

“Budget’s been slashed” indicates that you’re dealing with a big company. Otherwise the language would be different. A small company would say, “We don’t have the money.” Small companies don’t have budgets-they either have money or they don’t.

The key is to find out who the real decision maker is (a very delicate process). And the easiest way to do that is to find out who slashed the budget. (That’s the second time I’m giving you this answer.)

Salespeople think that because someone has a budget and can spend it, they’re deciding without big-boss approval. Even the person who appears to control his or her budget, may in fact, have to go back and ask “mommy” or “daddy” if it’s OK to buy.

Department heads and managers don’t like when their budgets are slashed because it hampers their game plan. They count on that budget to increase or improve something. BUT TAKE HEART! Just because the budget’s been slashed, doesn’t mean it can’t be restored.

The challenge for the salesperson (that would be you) is to uncover the reasons the budget got slashed, who slashed it, and if that slasher is the true decision-making authority. Can he or she “pull the trigger”?

Here’s the good news: The person whose budget was slashed will do anything to get it restored (assuming they’re telling the truth). At this moment the salesperson (you) can work WITH the prospect to reach a higher authority and help recover the “lost budget.”

NOTE: There is an obvious sales response that I’ve omitted; it’s a whiny question for the salesperson who is only interested in the sale, not the relationship. The question too many salespeople ask when told the budget is slashed is: “When will the budget be restored?” In other words, the salesperson is saying that until the budget is restored, “I am leaving.” Big mistake.

Budget is too often about price. Many “budget” spenders consider price only. Those people are not doing the best job for their company. The object of having a budget is to select the best value at a fair price. When solid decision makers buy, they consider value, productivity, and profit.

ANSWER: Get to the decision maker with a value proposition. That’s the best way to recover the lost budget. Find the decision maker and prove the value of your product or service in terms of their needs-and you can recover the budget.

LAST THOUGHT: Why weren’t you talking to the budget MAKER in the first place?

Want more about the budget objection? I’ve got a few more tips. Go to www.gitomer.com — register if you’re a first time user — and enter BUDGET in the GitBit box.

Jeffrey Gitomer
, the author of The Sales Bible and The Little Red Book of Selling, is President of Charlotte-based Buy Gitomer. He gives seminars, runs annual sales meetings, and conducts Internet training programs on selling and customer service at www.trainone.com. He can be reached by phone: 704/333-1112 or e-mail: salesman@gitomer.com

c 2005 All Rights Reserved – Don’t even think about reproducing this document without written permission from Jeffrey H. Gitomer and Buy Gitomer 704/333-1112