What is a Budget Competitor
When making buying decisions, clients assign budgets to their needs. In a B2B environment, a budget is often assigned before the sales process begins.
What the budget tells
At any moment in time, a budget is finite. A buyer determines how much, out of the available spend, can go towards solving the problems of the day.
Once it comes to making a decision, budget spend will always go towards a buyer’s principle pain – whether that is a pain of need or of want.
In other words: if a budget is assigned away from Product A/Problem A towards Product B/Problem B, that is a signal that Problem B is viewed as more painful than Problem A. Essentially, the client can live with Problem A if they have to.
What that means to a seller
Multiple areas are always fighting for the same budget. It is a business’ responsibility to be aware of these competing priorities and how they are managed by the buyer group.
Asking questions about how one particular project fits into a buyer’s greater strategy and list of projects is good practice in any selling situation. This will allow the seller to think more broadly about their own product application.
A solid understanding of a buyer’s pain point and a product that goes beyond a single solution option will broaden a business’ appeal to a client who might be moving budgets around.
Understanding Budget Competition
A competition matrix is built to help a business stay innovative and keep new business coming in. Understanding budget competition forces a business to remain vigilant to the broader scope of their clients’ needs.
This means anticipating objections and more importantly: constantly building a product that does more for a client.
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