The Budget Squeeze - How to Navigate in Challenging Economic Climates
You might have been told that due to budget constraints, you can’t get your deal over the line – or perhaps you are being squeezed so your deal is not the value you might have hoped.
In the current economic climate, this sounds perfectly plausible; money is tight, so the spending brakes are on.
That said, some software companies are still recording record growth – so some customers are still buying.
How do you ensure you are one of the lucky ones which keep your deal intact?
A robust business case
When we work with a client who is getting the budget-constraint feedback from their customers, the first thing we look at is - how robust is the proposed business case?
Does your business case:
- Articulate unique value to your customer?
- Have a clear ROI, so your customer is easily able to see the investment vs return?
- Speak directly to the Champion and Economic Buyer who most benefit from this deal?
When compiling a business case, it is imperative that you demonstrate why your solution is the only solution for your customer.
Once compiled, you’ll need to validate this with your customer to ensure you are really hitting the mark and your business case provides the much needed antidote to their business challenges.
And, once validated, do they understand that it is only you who holds the key to success?
ROI rules the roost
It might be tempting to keep the deal on ice and wait for the company to come back to you with news of a budget being available. Unfortunately, when they say there are budget constraints, what they are really saying is the dreaded ‘maybe’.
If we have learned one thing, it is that:
a ‘maybe’ is more often a ‘no’ in disguise.
By not being a hard ‘no’, your deal limps on, takes up valuable time and prevents new opportunities being explored.
Advice to our clients at this stage, is to go back to the beginning of the sales cycle. Re-examine your deal with the focus on the value you bring to your customer and the Return On Investment they will see by working with you.
This feels like a big backward step. Moving from the end of your pipeline right back up the funnel to the start can be disheartening.
Much better to do this than have a deal that is perpetually constrained by budget, draining your energy and resources.
This re-examination starts with the pain you have identified and is backed up by the metrics you have collected:
- The pain needs to be real, it needs to be immediate and you need to be able to justify it in numbers.
- Your metrics must show what is at stake if nothing is done.
If you have identified an urgent need and have the numbers to back it up, you will be able to show your customer that the return on their investment very much warrants freeing up budget
The power of the Economic Buyer
The business case only holds water if validated with the Economic Buyer. Without this validation, the idea of prioritising budget is still a dream.
- Have you identified the Economic Buyer?
- Do they directly benefit from your solution?
- Do you know what a win will look like for them if they implement your solution?
Deals where the Economic Buyer hasn’t been identified and hasn’t assigned a budget to, are skating on thin ice.
If you are relying on someone who is spending money from a budget they are given, rather than a budget they control, coming up against constraints is a likely outcome in today’s world.
Refer back to our MEDDIC training and blogs to re-qualify whether the person assigning budget to your deal is really the Economic Buyer.
Champion to the rescue
By now, you should have a good relationship with your Champion, and should be able to lean on them for a bit of help in identifying the person you need to find to get this deal signed off.
If your Champion isn’t behaving how you hoped they would, or how you think they should, are they your Champion?
Our experience shows that in a lot of deals that stall for one reason or another, the Champion that you have identified isn’t actually a Champion. Or if they are, you have yet to build them into your Champion?
Taking the time to build a relationship with your Champion will be rewarding for the rest of your career. Once built, they will be your Champion for life, wherever their career takes them. Time spent on this step in any deal, is time you will get back tenfold, Champions are not built in a day.
In summary, if a budget squeeze is elongating your sales cycle or reducing your deal value, this is your cue to go back a step in order to take two steps forward.
If you are interested in new ideas, inspir’em sales meeting exercises and lesson plans are available to continue the development journey of your teams.
Contact us today to further boost your sales and see your revenue grow.
For more tips on applying MEDDIC in the real world - join our community at inspir’em today.