stop throwing away money

Stop guessing their budget…you’re throwing money away.

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 they’re expectations were. I’d just present everything to them first, and pray to Jesus/Allah/Buddah that I got something out of it.

I later learned that if the client asks the question, “So how much does this cost?” it meant I was no longer controlling the situation.

Anyhow… after a few years I finally discovered what’s known as “The Bucket Technique.”

This technique is a framework for finding out how much your client is willing to spend.

THIS IS A DAMN IMPORTANT CONCEPT because it will save you from endless proposals that go nowhere, and find out how much your client is willing to spend.

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 magic 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 just see how motivated they are as a buyer.

Watch for their reaction.

BAD ANSWERS… SIGNS YOU SHOULD RUN:
“Well, all new projects are on hold right now.” (I heard this one from Sprint).
“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).
GOOD ANSWERS… SIGNS THIS MIGHT GO WELL:
“It depends.”
“I don’t know.”
“For something like this we’d typically budget around $150,000.”

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 sell as much as possible.

When I would reach out to companies, they would usually not have a budget for a website.

They knew their website sucked.
They knew they needed a new one.

And they didn’t have any set budget for it.

Now for me as a sales guy, 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

To me, it made sense to focus on getting LARGE contracts, since getting a large contract meant very little extra work on my part.

Now most sales people will tell me, “I’m different, because I have a complex sale.”

But that’s because they’re doing the sale all wrong (I teach you more about this in my training).

So typically our sales would come in from $20,000 to $45,000 at the time. 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 I’d be able to 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 anchors a high price in their mind, which makes your perceived value go up. This number should be SO high, that it’s literally hard for you to say that number with a straight face!

———————————————–

STEP 3 of The Bucket Technique: Finding their budget.

Ask this question:

“Typically 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 on this. 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 Re-Cap of The Bucket Technique:

STEP 1: Ask the “setup question”
“What’s your budget?”

STEP 2: Find the right prices to use.
Minimum price, 5x the minimum, 10x the minimum.

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?”