How to Beat the “Budget” Objection

The ‘budget’ is one of the most ambiguous – and consequently, most frustrating- objections in the world of telephone sales.  If you can learn how to effectively master the budget objections you’ll close more sales, plain and simple.

Here’s the problem: there are several ways to interpret the “it’s not in the budget” objection:

  • Is your client saying, there’s budget available but your price exceeds that which has been allocated? Or,
  • Is your client saying, there is no budget for this particular item at all? Or,
  • Is your client saying, we’ve got budget – maybe lots of it- but wants to chisel the price down? Or
  • Is the client really saying, “I am not interested” but is being nice about it? Or,
  • Is the client hiding another objection behind the budget smokescreen?

Clearly you can’t tackle the budget objection without some clarification. There are 3 steps to get you started:

Step #1: Pause

This is a bit theatrical but very effective on the phone. When you hear the budget objection pause for a brief second. This will do two things for you. First, it buys you a little more time to formulate your response and second, it gets your clients attention; they hear the silent gap and zero in on your next string of words.

Step #2:  Acknowledge the Objection

After you’ve paused respond by saying , “I understand,” or “budgets are important” or something similar.  By doing so you’ve acknowledged you have heard the objection and that you’re not dismissing it. You legitimize it.  This reduces tension between the buyer and seller. It relaxes them and makes them open to further probing.

Step #3:  Clarify if budget is indeed the true objection.

Here are some ways you can clarify if the ‘budget’ is the real issue or something else:

“Chris, suppose budget was not an issue would my product/service provide the fit you’re looking for?”

“Pat, when you say budget do you mean that the price of (your product) exceeds the amount you have set aside for such a purchase?”

“Kelly, apart from budget is there anything else that would hold you back from purchasing?”

If Budget is not the objection….

Obviously what you are trying to do is determine if budget is truly the issue that is preventing the sale.  By isolating the budget the client must articulate further.  If there are other issues that are holding them back this is where they’ll crop up.  Usually you hear things like,

“Ah … well… you know…we’ve been buying from ABC for 15 years now and …”

“Well … I’d really have to check with my boss on that …”

“Budget’s important but we are really quite comfortable with our current system…”

“I …er… am a little concerned maybe it’s a little too much for what we need…”

The good news is that now you know it’s not really an issue of budget (or it might be budget PLUS something else).  At this stage you need to pursue a new line of questioning to determine if the latest objection is also a smokescreen. But whatever the case may be, you are beginning to peel back the onion and are getting down to the core objection.

If Budget is the true objection

If  your client pipes up that he/she loves the product and it would work wonders for them but the money is not there, you can respond in a couple of ways:

Budget Buster Option #1: Work Within Their Budget

Again, turn to questioning  to help you respond.  Go ahead and ask your client what they do have established as a budget.  You might frame it like this,

“Jeff, I’d like to see if there might be a solution here.  Let me ask, what do you typically budget for this type of product?”  (or, “What do you have budgeted for this project?”)  If the client is seriously interested in your offer they’ll usually cough up a number because they want a solution.

Once the number is out there you can try to work with it.  There are several ways to do just that:

–          Do you have a ‘lite’ version of your solution (same product but perhaps with less features, bells and whistle) that fits their budget?

–          Is there an alternative product (a different make or type ) that will do the same job?

–          Can you reduce the quantity to meet their immediate requirements?

Budget Buster Option #2: Find the Budget For Them

In this scenario, you act as a ‘consultant’ helping the client look for extra dollars or value.  Here are a few ideas;

–          Outline the additional benefits of your offer (i.e., show the value of the product; for instance,  the productive capacity is 18% greater which offsets the cost over the long run)

–          In a  similar manner, toss in something extra to ‘sweeten’ the deal  (which stretches the budget dollar further e.g., a warranty)

–          Ask if there are other departments or groups that can help with the budget (perhaps they derive some benefit as well?)

–          Ask about ‘contingency’ funds or special  reserves that most companies have for situations exactly like these

–          Offer financing to ‘ease the financial strain’ over a period of time

–          Determine if there is a ‘higher court of appeal’ i.e., find out who can approve the deal if there’s a case to be made

–          Perhaps offer a discount


Budget objections don’t have to be deal breakers.  If they are legitimate you can make a stab at overcoming them.  If they are not legitimate, you have another shot at finding out the true objection.  Either way, you are further ahead then you were.

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