The 3 Biggest Blunders When Closing a Sale

If you’ve ever interviewed for a job, you’ve likely been stumped when the hiring manager asked you, “What salary are you looking for?” Remember that feeling of dread—not wanting to answer too high and lose the opportunity, too low and undersell yourself or not at all and risk alienating your interviewer. Now, think about the sales prospects you’ve talked with lately. When you’re early in the process of qualifying sales leads, one surefire way to put them off is to sound like a hiring manager by asking them, “What is your budget for this project?”
Don’t fall into the trap of asking “the budget question.” From our 23 years of experience working clients, we’ve seen the three biggest blunders that sales people make when trying to close a sale all revolve around “the budget question.” These are:
1. Asking about budget too soon
Believe it or not, many sales people ask about budgets upfront, during lead generation, so they can tailor their offering around how much money the client tells you they’d like to spend. Makes sense, right? Wrong. If you ask about the budget too soon into the process of qualifying sales leads, you risk getting incomplete or no information from the prospect, and thus any rapport you may have established is about to disintegrate. It’s the equivalent of meeting someone at a party and then immediately saying, "Hi, Jeff, nice to meet you. I'm Bob. So, what's your net worth?" It can be perceived as rude and invasive in a personal context, and this may actually carry over to the business environment as well. So when is the right time to ask about budget? Read on. The answer might surprise you.
2. Asking about budget too directly
Generally speaking, it’s never wise to ask outright, "Do you have a budget for this project?” or “What is your budget?” Sure, these are the questions you want answered. But if you’re too blunt or too eager to get budget information from your sales leads, you run the risk of shutting down the sales process before you’ve had time to talk and get to know the client’s needs. Although we all want to win the client’s business, there are smarter ways to get there. For example, you could ask, “What are some recent initiatives you’ve done in this area?” This shows that you’re interested in the broader problems facing the client’s business, and you can get a sense for how much they might have spent on other similar solutions. You could also say, “Where does this situation stand on your priority list?” This gives you insights into the client’s level of urgency and eagerness to make a buying decision.
3. Asking about budget. Period.
Getting at the budget in a sale is an art form. Most sales leads don’t come right out and tell you their preferred budget; instead, it requires finesse to hone in on the client’s needs and clarify expectations of what solutions to deliver, and at what price. The real trick is getting the prospect to give you the budget information you're looking for without having to explicitly ask for it. How? Start by leading off with questions that show you're concerned with the client’s best interests. Then show them that you’ve been listening, and demonstrate how you can help solve their problems. Finally, provide a basic cost-benefit scenario and leave it to them to tell you if they can afford it. If you’re doing your job right, you won't even have to ask if they "have enough money."
So now that we’ve discussed the blunders, what is the “right” way to talk about budgets when qualifying business leads?
Remember that you are selling a solution—an “investment” that will benefit the client’s business. Don’t talk about what the client has to pay, talk about what they’re going to get in the context of ROI. Show them that they can’t afford not to pursue your solution since it will likely deliver a positive return for their business. That is, assuming you believe your product or service will genuinely provide this. Here are some examples of how to do it:
Cost-driven conversation
“We have a solution that’s going to cost you $X,000, but if you can afford to go higher on the budget, we also give you additional features for $X,000 more.”
With this conversation, the prospect is prompted to think, first and foremost, about what they will pay instead of what they will gain. A cost-driven conversation reminds the client of what they’ll be giving up, before they think of how they will benefit.
ROI-driven conversation
"Our solution can help you reduce your payroll by X percent and also give you more capacity and faster processing. This means that you can save (X amount) during the next 12 months. The cost of our solution is Y. So would a return on your investment of Z be a good fit for you? If so, then we might have just the solution you're looking for.”
You’ll always be on the right path to profits when the conversation is about the impact your product or service will have on day-to-day business operations or long-term growth.

09:10 by Robert dawne · 0

Could Facebook’s Newly Wealthy Employees Help California’s Withering Economy?

Facebook’s slew of newly wealthy employees could “significantly impact” California’s economy during the next few years, said H.D. Palmer, deputy director of external affairs for the California Department of Finance.
“The closest analogue is the 2004 Google IPO,” he said. “Its benefit to the state’s general fund was in the neighborhood hundreds of millions– at least $400 million.”
Facebook, based in Menlo Park, Calif., afforded generous pre-IPO stock options to as many as 1,000 of its employees. They now stand to make a fortune when the stock goes public. One of the ways the state will make money is when employees cash out their shares and then have to pay taxes.
“If it’s as big as it’s advertised, it certainly has the potential to eclipse the Google IPO — but it won’t happen over night,” Palmer said. “While the potential revenue gain is certainly significant, it has to be viewed in the larger context of the legislature having to close a budget gap that we estimate to be $9.2 billion before the state’s new fiscal year begins on July 1st.”
There’s nothing currently built into the state budget, finalized in December, 2011, that reflects any increase in funds related to Facebook’s IPO. At the time, it was unknown when the company’s IPO would be announced. But the state will release a revised revenue forecast in May, which could reflect any Facebook IPO money affecting the state’s General Fund revenue for the coming fiscal year.
Jason Sisney, deputy legislative analyst for the nonpartisan Legislative Analyst’s Office which advises the California legislature on state budget issues, said that lawmakers are eager to know how Facebook will affect California’s economy.
Because tax records are private, no one will ever know the Facebook IPO’s precise impact on the state, but Sisney said his office must consider Facebook when they revisit the budget.
“Given the budgetary pressures they (legislators) face, they’re interested in not making more cuts than they have to,” he said. “This is more than a drop in the bucket, it’s a pretty noticeable chunk of money.”
But even the most optimistic estimates of Facebook’s revenue are not enough to cure the state’s mammoth budget woes.
“This is only going to be one relatively small piece of how California addresses its budgetary issues in the next few years,” Sisney added.
It also remains to be seen exactly how much California will benefit from Facebook and where the most revenue will come from — whether it’s from taxes on the IPO filing itself or on executives cashing out stock. When these various taxes are paid will determine which fiscal year California’s legislature can include Facebook in its budget.
Facebook employees with stock options won’t pay taxes until they sell their shares. Once Facebook employees sell their shares, the money will be taxed as personal income. The top marginal rate for personal income tax in California is 9.3%. Individuals whose adjusted gross income is more than $1 million pay an additional 1%, with that money going toward mental health programs under Proposition 63. In the 2011 tax year, about 1 percent of earners generated more than 40 percent of all the personal income tax in California.
“History suggests that a lot of investors will sell some of their stake and diversify their portfolios, to spend, to save, to give to charity and other purposes,” Sisney said.
Comparing Facebook with Google, Palmer said Google’s co-founders Larry Page and Sergey Brin sold most of their stock over an 18-24 month period.
Richard A. Walker is a professor at University of California, Berkeley, and an expert in economic geography and California. He said that as outside investors purchase Facebook stock, Zuckerberg and employees with stock options will become wealthier.
An influx of wealthy Facebook people buying property could also drive up housing prices in the San Francisco Bay Area. But he said that property buys won’t provide as much long-term help to the economy as purchases of things like cars, food, and hardware.
Walker also said that, while hundreds of newly-minted millionaires could boost the California economy somewhat, their newfound riches will also come with economic drawbacks. “On the other hand, these kinds of super-IPOs contribute to the class of very rich people and to the ongoing problem of class inequality in California, which is already very bad — one of the worst states in the U.S.,” Walker said. “While the tech boom today is a healthy contributor to the local economy, what the state needs more is ordinary jobs with decent pay, not just high-paid or very wealthy techies.”

05:41 by Robert dawne · 0