“They Give You Cash, Which Is Just as Good as Money”

Yogi Berra hit the nail on the head. There are a lot of different words for the end target of sales: money, cash, budget, price, resources. None of them is particularly easy to talk about.

Buyers often inquire about pricing right out of the gate. And salespeople, many of them coming from a tradition of lead qualification that starts with Budget (BANT), are eager to get financial information up front too.

Often, though, both sides of the conversation are doing themselves a disservice in how they ask these questions. The issue of resources is much deeper than just dollars and cents. Talking about resources should be multi-dimensional, addressing issues like timing and human resources.

RESOURCE QUESTIONS HAVE CHANGED SINCE BANT

Budget conversations used to be very different when IBM created the BANT qualification framework. At the time, essential corporate purchases involved a large initial outlay for ownership—for example, of a mainframe computer. But most B2B sales today center on software as a service (SaaS) and cloud services instead of traditional licenses. The shift to SaaS has accompanied a shift to subscription-based pricing. We see subscription models outside software too, e.g., in rental contracts for computers and printers at large organizations.

Subscriptions have upended the ways in which organizations budget, especially for software. In 2018, Gartner predicted subscription-based SaaS would make up 80% of offerings from legacy software companies, as well as 100% of newer software. Fast-forward to 2021, and we see that SaaS has in fact become completely dominant.

Now a conversation about budget isn’t addressing a one-off, upfront cost. It’s about total cost of ownership and a long-term commitment to pay a smaller amount. Sometimes it still makes sense to time a sales cycle to take advantage of institutional budget cycles. For example, higher ed tends to deploy a lot of new technology over the summer when IT has available bandwidth and downtime impacts fewer active users. Federal and state departments often need to burn surplus budget at the end of their financial year in order to avoid cuts.

The timing of resources in subscription-based SaaS makes for new things to think about for both the buyer and the vendor. Demonstrating the value can involve helping them to see how quickly they will realize a return on investment. For the sales professional, it’s important to keep the other aspects of DRIVE in mind: will they see Impact? It’s possible for a salesperson to land new customers who actually present a net loss to their organization. If they subscribe but churn before you recover the costs expended in sales and marketing functions to land them, it would have been better never to have pursued them. The DRIVE framework helps identify the square peg round hole problem (more on “I” = “Impact” in March blogs).

Universal adoption of one model makes differentiation tough in the Resources conversation. Companies that want to find a competitive advantage by offering unique pricing have begun to explore options beyond subscription. For example, usage-based pricing is gaining popularity. Since users only pay for what they use, they don’t feel like the subscription is a dead weight on their budget. Again, though, unless the buyer is motivated to use the product actively, it will be hard to recoup the costs of customer acquisition.

COLLABORATIVE BUDGETING

Resources can be one of the most delicate parts of the sales conversation. Handing over money from one party to the other feels a lot like a win-lose outcome where you win and they lose. But value comes through when you connect Resources to the big picture for the prospect. To cite DRIVE, what Impact will the purchase have? What are their Expectations?

I’d like to share some examples of questions that initiate a conversation about Resources in a way that can lead to prospects considering value, and that can psychologically prime them to become a champion for you. Here are the questions:

• What does the budget approval process look like?
• What other departments do you think would benefit by your buying our solution?

Think about what these questions get the prospect contemplating. In the first question, instead of thinking about dollars and budget line items, the prospect is thinking about taking actions to advance the sale. They are considering who they would have to talk to and how they would have to persuade them. Or in those rare cases where they’re the sole decision-maker, they’re probably feeling pretty positive about the authority they can exercise to make the decision. Your follow-up questions as you dig into further layers of DRIVE information-gathering can further engage them in imagining going through the process of making this deal happen.

The second question I mention can help people who are in large organizations but are hesitant about their ability to drive budget decisions. Concurrently, it helps you. By inviting the prospect to think about other departments and colleagues who may benefit from the purchase, it gets them thinking about the value of the product again. Now instead of worrying about money, they are thinking about helping Judith over in R&D or Anish in HR. They are thinking about how to become your champion. If they successfully reach out to other departments, the resources piece may also fall into place. Now there is budget available from multiple departments—or, at institutions that have realized the value of budgeting to more holistic priorities, a solution that benefits multiple departments is likely to rise up the priorities list.

To become expert at guiding resource conversations in these directions—where you can get the information you need through a process weighted toward positive, value-oriented visualization and away from uncomfortable line items—consider practicing question trees.

HUMAN RESOURCES

Even if you initially engage customers with a free trial or use a freeware or freemium approach, implementation requires resources. Users need to learn how to use the product. Organizations may also need to spend some amount of time with your deployment team customizing the setup to their needs.

These costs in human capital have derailed many sales. If no one on the customer’s team has the time to learn how to use the software, they won’t use it. If they don’t use it, they won’t get any value out of it. This scenario makes them extremely vulnerable to churn.

This is why it’s extremely important to consider human capital in your discussions with prospects about resources. If they don’t have the manpower for successful and timely deployment, training, and uptake, focus your attention elsewhere. SaaS subscription-based ARR requires reasonably satisfied users, not just buyers. Buyers only become happy users by using the product. For usage-based pricing models, the requirement that they use the product for you to succeed is even more obvious.

Great Resources questions that get into this issue of employee time as a valuable commodity include:

• Who else will be working on the implementation with you?
• What other teams need to be looped in?
• What’s the process for determining bandwidth?

Some prospects can answer these questions readily. This can be a good or a bad sign. If it’s glib but not backed up by details, you may need to try asking the question a few other ways to uncover the real situation. But if they can explain in detail, they’ve probably handled similar deployments before. Then you can ask them follow-up questions to dig into how to ensure the most successful launch possible.

On the other hand, it’s amazing how often asking these human-resource questions gets an answer of “I don’t know.” Then the question can be the nudge your prospective customer needs. It puts important issues on the radar.

If they haven’t thought about these issues, but are proactive in getting the answers, it’s a good sign. They will be ready for deployment, and also are motivated about implementing your solution. They will probably also be motivated to get the contract signed, schedule kick-off, and get their team trained on using it.

If you can’t get them to get these questions answered, signs are poor for their organization becoming engaged users of your product. It may be smart to inquire whether they have the necessary resources to really implement change at this time—or if you should check back with them at a future time.

Questions about human resources and availability don’t stop being an issue when they sign on the dotted line and become a client. In fact, this is one of the areas that’s most important to keep talking about in the post-sale period. Think about how you can balance check-ins about their bandwidth and timeline with offers to add value. For example, if you can show them during implementation how best to track the gains they’re realizing from using your software, it will help them justify their investment and demonstrate the wins they’re creating for their organization. (It can also serve as great case study fodder for you when they end up as a success story.)

Finally, contemplating what employee time in their organization is worth can help prospects see the value of purchasing a solution rather than building it in-house. If they are having difficulty finding time for implementation and training of an off-the-shelf solution, how will they find time to build, test, and maintain their own solution? As a simple, dollars-and-cents total cost of ownership, your product or service may sound expensive. But once they think about all the employee time that would be eaten up by solving it themselves, your SaaS solution may sound like a much more reasonable way to deploy their resources.

Connect with Mastery@maestrogroup.co today to learn more about the DRIVE information-gathering framework and best practices throughout the sales cycle.