6 Reasons to Answer the "What's Your Budget?" Question

6 Reasons You Should Answer the “What’s Your Budget?” Question

“What’s Your Budget?”

Do cringe every time you hear that?

When a sales rep asks, your first instinct might be to clam up. Mine is.

As a former CMO, I spent millions on marketing vendors and technology projects over the years. I was frequently in the buyer’s seat and I know how it feels to suspect that somebody is just trying to get as much money of you as possible.

It’s a bit like walking into a car dealership and having the sales person inquire, “So, how much do you want to pay each month?”

When you’re buying services for your business, the budget issue is not about the payments, it’s about value.

Money is a resource, and there’s usually more to be found when something as a priority. There’s always an opportunity to pull budget from other areas to make an important project happen.

If you know you can find the money for whatever initiative you’re considering, you may be convinced that there’s no point in sharing your budget numbers with the person sitting in front of you.

What’s in it for you, other than a higher pricetag?

Actually, there’s a lot at stake and it’s worthwhile to be frank. Here are six strong reasons to answer the all-important budget question:

1. It proves you’ve done your homework.

Having a budget number, or at least a range in mind, shows that you have some idea of what you’re looking for and how much it should cost.

This is a great way to very quickly demonstrate that you’re a savvy buyer, and you won’t be hoodwinked.

2. It shows you’re serious.

Tire kickers typically don’t have a budget because they’re fishing for numbers. If you’re using the sales person’s time to help you do your research that’s okay, but be upfront about it.

When you’re open, the person you’re dealing with is much more likely to be helpful and honest in return.

3. It signals trust.

Saying “I don’t have a budget” is like saying “I don’t trust you.” If you’re lying about that in the first meeting, that doesn’t bode well for the prospect of a trusting partnership with the provider you’re considering.

Share your budget estimate, even if it’s a broad range. Cite a high- and low-end, or give a more specific figure if you’re comfortable doing so.[Tweet “Saying “I don’t have a budget” is like saying “I don’t trust you.””]

4. It establishes your authority.

Real decision-makers have a realistic budget in mind. Not knowing that number (or professing not to know) suggests that you’re simply gathering information for someone higher up.

If you don’t want the person you’re dealing to go over your head to find the person who can sign the check, be upfront about the numbers you need.

5. It shows respect.

Helping the person that you’re dealing with figure out quickly whether you’re a good prospect is beneficial for you both. Being cagey shows you don’t respect their time.

Don’t waste your time or theirs time dancing around the budget issue. Get a financial framework on the table and move on.

6. It weeds out unqualified vendors.

Purchasing is a mutual decision. Both parties should be concerned about fit as well as value.

If the relationship is not going to work because budget expectations are out of alignment, you want to know that as quickly as possible.

Now that you’re in the know, what will you do the next time you’re asked, “What’s your budget?”