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It's Never in the Budget

By: Larry Sugarman

10/1/2008

Selling to customers who have 'no budget'

Whenever I conduct a sales-training workshop, I ask my students to list the biggest challenges they face in selling to schools. Invariably, the first or second item on the list is "no budget."

Later, when we discuss the prospect-interview process, I ask for some key questions a salesperson should ask. The question mentioned by most participants: How much is in your budget?

Now, if we know there is no budget, why are we asking what's in it? Unless you had a proposal in place prior to the previous budget cycle, the answer to "How much is in your budget?" is almost always going to be, "There is no budget."

So stop asking customers that question and ask yourself this instead: If you're not in the budget, how do you make your quota this year? The answer to this question requires us to understand what the budget really is.

A Guessing Game

The budget is the school district's best guess as to how much revenue they will receive during the year, and their best guess at how they will allocate those funds to accomplish their objectives. The whole thing is based on guesses. Therefore, budgets change as reality bumps up against them. A dangerous roof leak, an unexpected shortfall in the state coffers, a sudden drop in reading scores, skyrocketing heating bills-- these are all realities that cause budgets to be modified. I would like you to consider the possibility that "budget" has no bearing on the decision to purchase your product or service.

Think about this: Every school district has the same Mission Statement. Each will spend a year writing it, but they always end up with pretty much the same thing:

"To provide a world-class education for all children and prepare them for citizenship and life." You will notice that nowhere in this mission statement is the phrase, "as budget permits."

Every school district is trying to meet this lofty objective. And, every school district is experiencing problems in doing so. Some have declining test scores, some have teachers who are unprepared to handle increased diversity in the classroom, and some are dealing with escalating violence on campus. Most are dealing with a number of these issues.

It is my contention that the determination of how money is allocated in the district is based on two main factors:

1. The intensity of the pain being caused by their unresolved issues.
2. Their belief that a particular expenditure of funds is the most cost-effective way to address the issues.

To make matters more complicated: