How to Sell around Budget Constraints

It never ceases to amaze me how many business people assume that a budget dictates what a buyer can spend. In my experience, that is almost never the case. The truth is that in most cases, budgets are guidelines—and nothing more than that. Additionally, they are sometimes based on a flawed or limited understanding on the part of the buying party of what is actually required.

Of course, most salespeople fall into the trap of selling to the budget. They build their entire proposal around this number. They assume that their recommendation must conform strictly to, or be below, the budget threshold. They ignore the issue of value. They don't take the time to find out what the customer is actually trying to accomplish, and they miss opportunities to both increase sales and serve their customers better.

It is worth noting, also, that budgets are often the domain of people who do not have final approval authority. In other words, when a person tells you, "My budget is X," this statement usually means "I have been given permission to spend no more than X." This tells you that you are talking to a person who is not a decision maker. The real question here is this: who gave the permission? The person who approved the budget is the one who buys based on value and isn't limited to the budget number.