Not in the Budget? What IS in the Budget?

Don Graham, General Manager, Billian's HealthDATA and Porter Research
August 16, 2010

Sales people in every type of business or industry hear these four words frequently these days - even from companies that are reporting significant revenues and profits. The purse strings to buy are tied pretty tight. Caution driven by the recession continues to sway buyer attitude, and all the media news about unemployment and the slowly recovering economy has many buyers spooked.

Billian's HealthDATA and Porter Research are certainly not immune to hearing the "not in the budget" response. However, what is interesting is the response received when we pose the question "What IS in the budget?" Many times that question is followed by a long silence. The business area of most interest to Billian and Porter is marketing and sales. A large portion of most of these budgets is people costs. Salaries, commissions, trade shows, maybe some advertising, computers and phone make up most of the budget allocation. Surprisingly, there is seldom any allocation for new and innovative tools that might actually help increase sales or reduce the cost of sales and marketing. The reason for this is often because this year's budget is a derivative of what was spent last year. The budget logic seems to be 'since we did not have the productivity tool or project in the budget last year, it must not be needed this year.' Unfortunately, that budget logic contributes to the real business problem being ignored. The real problem frequently is not enough revenue and a high cost of sales.

This situation exists in spite of some very compelling business intelligence that indicates that the effective use of CRMs - third party data sources - and information distribution tools can yield a minimum of 10- to 20-percent revenue increases with minimal increase in cost. In fact, the average cost of a sale actually goes down. However, a key phrase in that scenario is "effective use." At Billian and Porter, the objective is to make better use of our internal tools (Salesforce.com, Silverpop and Hoover's), and more importantly, provide data and services to our customers that will result in the benefits of increased revenue and reduced marketing and sales costs. Fortunately, those benefits have been realized often enough that the combination of Billian and Porter is currently a growing business. But it is frustrating that "not in the budget" still wins a number of our sales situations.

A conclusion one could draw is that there is a need to believe that if you give an average sales person more times at bat with a good product or service, he or she will sell more. That's reasonable. Another thought might be that if you communicate frequently with your customer or prospect, your product will be considered favorably at buying time. A not-so-far-out consideration might be that a better-qualified prospect can be found by using the tools available, thereby resulting in a shorter sales cycle and a better hit rate.

All that said and much more are simply words on electronic paper unless there is a commitment to change the mentality that comes with the response "not in the budget." Some would say that if that mentality continues, there would be no need for a budget. No business, no budget.

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