Willie Sutton, an infamous bank robber, was asked why he robbed banks, and he responded,"Because that's where the money is."
So why should you be extra diligent and motivated when prospecting toward the last quarter of a fiscal year? You guessed it because that's where the money is.
The article Taking Advantage of 4th Quarter Spending Season, (published on Governmentcontract.com) points out that 1/3 of the annual budget is spend in the fourth quarter, and 50% of that is spend in the last month! Many corporate clients follow a very similar spending pattern.
Why this matters
- Budgets often need to be used by the end of the budget cycle or the end of the year. As a result, budget owners are often evaluated on their ability to effectively use what is allocated to them and the return on that spend.
- No successful executive wants to end the year and be rewarded with the words, "Nice work on coming under budget. Let's cut your potential to spend next year." Instead, effective executives will see their surplus and figure out how to use it to run programs that help them plan for the future.
So as a sales professional, how do you use the budget cycle to flush out new opportunities? Using a simple model from our Selling the Key Executives (SKE) program, we suggest using the RAMP method, Research, Access, Meet, and Propose.
Research about the industry, company, and people is always necessary before a senior-level sales meeting, but it's especially critical now regarding their budget cycle. It may help find an internal coach, administrative assistant, or procurement specialist who can help with your research and provide more information about budget details. Here are some additional research suggestions:
- Understand the budget cycle of every client and the prospect you're targeting, and respond accordingly. Build and execute sales plays corresponding to their budget cycle.
- Find out how budgeting works within your client. Is it "use it or lose it"? Are they measured on budget utilization?
- What is the budget threshold each of your key sponsors can invest in without escalating or getting procurement involved?
- Is the budget cycle a time of stress? Or is it a time where you can trigger a potential "reason to meet?" Use this as an opportunity to help your client solve a problem and utilize an untapped budget.
Getting high-level meetings during the budget cycle should be your goal. So pick up the phone, send a tailored email or personalized video message outlining why it is in their interest to meet with you now.
- Ask for the meeting – the goal is to get in front of them and have a conversation, not pitch them in an email or voicemail. Sell the meeting.
- Work with internal coaches or admin assistants to build the case for a meeting and why it's in the executive's interest to meet with you.
Once you have a meeting, consider the key questions to ask to explore the budget situation. The focus needs to be on helping them solve a problem, not coming across as just trying to spend their budget. Here are some questions to consider:
- What happens if you have an unused budget at the end of the year?
- Are there any initiatives that you're trying to get off the ground before the end of the year?
- Do you have an unutilized budget that you would like to invest in a small project or pilot?
- What steps would have to happen to launch this initiative by the end of the year?
The final step of the RAMP model is to plan out your proposal and refine your ask. If you know a budget is available, present an idea that's a priority to the sponsor.
- Propose a pilot or small engagement to tap into the budget and set the stage for a larger project.
- Present ideas to utilize budget for expenditures that can be paid for in this budget cycle, such as capital outlays, service hours, planning sessions, etc. (ensure compliance with procurement, accounting, and legal constraints.)
- Propose a proof of concept that's easy to say yes to and doesn't require significant investment - but get their commitment upfront for a larger scope project once you've proven value.
The end of budget cycles can be lucrative times for people who have cultivated a relationship of trust. Knowing who in your book has an extra budget to spend can be the difference between hitting your number and crushing your year.
About Ray Makela
Ray Makela is CEO and Managing Director at Sales Readiness Group (SRG). He oversees all client engagements as well as serves as a senior facilitator on sales management, coaching, negotiation and sales training workshops. Ray has over 20 years of management, consulting, and sales experience and writes frequently on best practices for coaching and developing sales teams.