(From Bryan Kreuzberger email)
Clinton,
When I started off in sales, I would go to a meeting and then FREEZE when it came down to talking money.
I
would try and disguise the dollar amount in cheesy ways like saying
"this will cost 50-K" instead of saying "This will cost fifty thousand
dollars."
But
the main mistake I was making was not first ASKING the client what
their expectations were. I'd just present to them, and pray to
Jesus/Allah/Buddha that I got something out of it.
I later learned that if I was in a meeting and a client asks the question, "So how much does this cost?" It meant I was no longer in control of the situation.
Years later I learned a technique known as "The Bucket Technique” to talk money.
This
technique is a framework for finding out how much your client is
willing to spend, even in you aren’t comfortable talking money like me.
THIS
IS AN IMPORTANT CONCEPT because it will save you from endless proposals
that go nowhere, and find out the most your client is willing to spend.
It’s almost so good, I don’t want you to see it coming when you buy
from me. I still use it with every client.
Read on:
STEP 1 of The Bucket Technique: Asking the "setup question"
In
your initial meeting with the prospect, if you're seeing signs they
like what they see... you ask this magically simple question:
"What's your budget?"
We can even modify that question a few ways like this:
"What do you typically budget for something like this?"
"You seem interested, do you have a budget for something like this?"
Basically,
this is a setup question. Almost certainly they never just throw out a
number. This question is to show you how motivated they are as a buyer.
Watch for their reaction.
BAD ANSWERS... SIGNS YOU SHOULD RUN:
- "You know, we're really just looking." (This means they're just shopping around and using you for free information).
- "We're just in research mode." (This means they're not ready to spend money).
- "Well, all new projects are on hold right now." (I heard this one from Sprint).
GOOD ANSWERS... SIGNS THEY MIGHT BUY:
- "It depends."
- "I don't know."
- "I’m not at liberty to say."
Let me show you a real-life example from recent history:
---------------------------------------------------
I
was selling custom websites for a web design company. The contracts
would range from $5,000 to $250,000... and it was my job to close as
much as possible.
When I would reach out to companies, they wouldn’t usually have a budget for a new website. Even though...
They knew their website sucked.
That they knew they needed a new one.
They didn't have any set budget for it.
Now for me as a salesperson, I didn't have to do the technical side of building the website. My company handled that.
So it came down to this:
If I sold a small contract, I did the same amount of work.
If I sold a big contract, I did the same amount of work.
HOWEVER, I made 10% of the gross sale, so the difference in commissions was massive!
If I sold a $5,000 website, I would make $500
If I sold a $50,000 website, I would make $5,000
If I sold a $150,000 website, I would make $15,000
If I sold a $200,000 website, I would make $20,000
I’m
not a math genius, but to me it was pretty clear to focus on LARGER
contracts, since getting a large contract meant very little extra work
on my part.
Typically
our projects were from $20,000 to $45,000 on average. And when I would
use The Bucket Technique and ask "What's your budget?" I was always
shocked at how wrong I was!
I would either be able to get a lot more out of the deal, or they had no money and I was able to quickly disqualify them.
----------------------------------------------
STEP 2 of The Bucket Technique: Finding the right prices to use.
So
if I was going after a contract I wanted to land at a target of
$20,000, but I'd like it to be more like $50,000... then I'd come at the
client with these figures:
$20,000: This is the minimum I'd like them to spend. Anything below is not of interest.
$100,000: It's 5x the minimum spend.
$250,000:
This is more than 10x what I think they're budget will be. I purposely
want this number to be completely outlandish. This number should be SO
high, that it's literally hard for you to say that number with a
straight face!
The
reason I want the last number to be high is it anchors a high price in
their mind and makes the perceived value go up. It also gets them to
physically react, when I say it.
-----------------------------------------------
STEP 3 of The Bucket Technique: Finding their budget.
Ask this question:
"Typically our clients fit into one of three buckets: $20,000... $100,000... or $250,000..."
Now almost every time without fail, as I utter the highest number, they will stop me mid-sentence.
And that's EXACTLY what I want!
Because the next words out of their mouth will be the number on the higher range of what they're willing to spend.
They'll say something like this:
"There's no way we can spend $250,000... the max our budget is about $85,000."
"We're a lot smaller than some of the companies you probably work with, the most we could spend is 30 to 40 thousand."
Almost
right away they have given you their max budget. Why does this work you
ask? Because the number is SOO high, they respond emotionally.
I was hoping at best to get $50,000... but almost immediately could find out they're willing to pay more than double.
NOW... if at this point they still haven't told you their maximum budget, you follow up with the question:
"Typically our clients fall into one of three budgets, do any of those numbers speak to you?"
And with that setup... in over 1,000 meetings... I've never had someone not answer that question.
--------------------------------------------------
So
there you have it, "The Bucket Technique" to talk money when you're not
comfortable talking money....and to find their budget, even if they
"don't have a budget."
If
you're ever going on a sales call, and need a quick refresher on how to
position your pricing, use this cheat sheet I made you:
Quick Recap of The Bucket Technique:
STEP 1: Ask the "setup question"
"What's your budget?"
STEP 2: Find the right prices to use.
Normal price for working with you, 5x the normal, 10x the normal.
STEP 3 of The Bucket Technique: Finding their budget.
Ask
this question: "Typically clients fit into one of three buckets:
$20,000...$100,000...$250,000...do any of those numbers speak to you?"
You can also save this email.
Thanks,
Bryan Kreuzberger
P.S. If you liked this email,
there's a LOT more I have to show you. Stay tuned
