How to Address “No Budget” or “Spending Freeze” Objections

The economy has taken a turn this year, and many experts feel we are heading towards a recession. 

These concerns have adversely impacted our customers and prospects, as their revenue, profitability, and stock prices have taken a bit hit.

During tough times, companies often freeze spending, hiring, or “nice to have” projects and start focusing on reducing expenses and increasing efficiency. 

Many of my prospects have mentioned spending freezes and limited budgets when negotiating, but this is not something that should prevent you from closing a deal. 

Instead, try using creative options to book the deal now while still addressing the clients financial constraints. 

Here are two strategies which I use to sell when clients have spending freezes or cash flow concerns: 

1. Future Dated Orders (FDO’s) – simply put, this means getting the contract signed now but delivering the product or service at a future date laid out specifically on the contract. 

FDO’s can also be used very effectively when a client has competing priorities that they are focused on this quarter and can’t start your project until a later date. 

2. Split Payment: With this option, the clients invoicing cycle is split up to address cash flow concerns while the client still receives the benefits of “upfront payment.” Best of all, this typically has no impact to ACV. 

For example, if a SaaS company normally bills annually you can adjust the billing frequency to semi-annually so the client pays half now and half in six months, instead of all upfront. 

It’s a huge incentive without needing to provide an additional “discount” to get the business, and shows your flexibility in working with them. 

In today’s video, I share how to use these two vehicles in detail and give examples of deals I recently closed using these strategies. 

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