Thursday, June 18, 2015

Day 75: Two More Ways to Address the "Idea" and "Ballpark" Estimates

Yesterday I wrote the bulk of what I believe is an important topic in sales: When someone asks for a rough estimate, an "idea" or a "ballpark" when they are trying to price a service. I am speaking from the world of software-as-a-service (SaaS), but it happens in everyday life. We ask this when we take our car to the mechanic for repair; we ask our lawyer or accountant this whenever we need paperwork drawn up. The mindset that we have for several hundred or a few thousands dollars is the same that I see when dealing with much larger numbers in businesses.

What I'm recommending is that if you are fortunate enough to be the one asked, there are ways to get behind the question and give them what they ask for.

And that's the goal: give them what they ask for, but do it on your terms.

Why? Because at the end of the day, it's their expectation vs. your expertise. Again, if trust has been established with my mechanic and he tells me a repair is most likely going to cost somewhere around $500, even if I was expecting a number like $300, I'm more than likely going to let him do the repair because he knows what he's talking about much more than I do. Mechanics, however, aren't necessarily sales people. People need to have their cars fixed; mechanics are more quick to brush it off if someone balks at a price. They will not investigate further when you ask for a ballpark estimate. They will tell you, if you say yes, they will do the work; if you say no, they will not.  Perhaps that's a lesson I can learn better from them...

Nevertheless, I think there are some questions to consider and I addressed three of them yesterday. I have two for today:

  1. Why are they asking? This is an issue of motivation. If it is in the first conversation, it is good to find out what the motivation is for asking. The best thing that can be done is to flip it back on them. Today I was talking with a colleague and she brought up the idea of asking about a "dream scenario." Ask them to paint this picture, which allows them to talk and explain what they're envisioning. You may need to help guide, but while they're doing this, you can capture both the simple and complex areas, allowing you to come up with a better idea. Additionally, you can also try to defer from there, asking if you could have at least one more conversation.
  2. Who is asking? Is it a salesperson? A CFO? A VP of IT? Regarding SaaS specifically, if you are talking with a salesperson or a CFO, chances are they are going to be expecting a quote much lower than what you will tell them. This is different than a VP of IT, who most likely will be more understanding of a ballpark. Why? Because IT people know the complexity involved in implementing a new system. They know it is so much more than just "bing, bang, boom" which is the salesperson's notion or "a specified budgetary amount" the CFO is considering among 1,000 other line items.
So when the ballpark question is asked, first make sure that trust is established. That gives you the leverage to use your expertise and handle their expectations appropriately. Then, with that trust, use the five questions to help you lead the prospect as effectively as possible to get a right size ballpark in their own mind.

Then hit a home run.

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