When and how do you ask for a budget?

[Survivor]

I'm looking for some advice on how to get a budget out of a potential customer. I want to be able to qualify a potential customer before I go speak to them. For instance, if they are 55 years old and want to spend $75/mo on health insurance, I can't come close to helping them. Because of this, I do see it as important to get the budget before you set down for a deal.

Now, I have a couple of different issues with this. For one, I want some one to feel as if I am there to advise them (which is the way I like to think of it myself), rather than to come sell them something. When some one is asked about their budget, I feel like it instinctively makes them throw up the defense.

If they do give a budget, I feel like often times they are low balling because they feel like you are just going to take their budget and stretch it out anyway. Problem is, there is no way to know if $200/mo really is their budget, or if they are actually able and willing to spend $300/mo.

If I don't get a budget before the appointment, I would prepare a plan A, B, and C, but IMO it is kinda hard to "tailor" something when you just got a budget in the appointment. Not to mention, I don't like the idea of a potential customer watching me crunch numbers and flip through books.

So, what are you experienced agents doing when it comes to asking about a budget?

 

[RandeeLouisiana]

In my expierience, getting a budget isn't that hard. I run through all my qualifying questions and at the very end is when we talk money. Once they realize that I'm really trying to help them not just dig in their pocket. I get a feel for whether they want major med or comp. and go from there. I just ask them:

So John, we're all trying to save our pennies and I know you want good coverage that you can afford so what range would you like to keep your premium in? This will help me find the best plan that fits your needs and your pocketbook!

Or

As they're complaining to me about how they're spending too much on their current plan i ask them what they're premiums are running now and what they were when they started. (so if they're paying 300 now I'd say So if we can keep it under 300 you'd be happy or did you have another range in mind?

Just gotta get creative. You'll also hear "cheap as possible" i respond back with "well cheap is different for different people" I may think 600 is a steal but you may not feel that way am i right? so what do you consider fair?

 

[CHUMPS FROM OXFORD]

I have never asked that question. I try to quote a broad range of products (not an EHEALTH type of presentation) and usually the prospect will give a good indication of where they stand.

Members of the Clergy are wonderful to work with since they usually don't have a budget!

 

[Alston]

This might be a little off topic, but I've used the following three questions to determine how much income a client needs to replace in case of death or disability:

What is your current monthly take home pay?
How much do you save each month?
How much do you spend each month on luxuries you can do without?

When if you subtract the answers to the second and third questions from the answer to the first, you get, at least theoretically, the amount of money that they absolutely need each month.

It is a good discussion starter for income replacement products. It may work against you for other lines as it may make people feel like they can't afford the premiums.

 

[moonlightandmargaritas]

As a mentor of mine told me many suns and moons ago...when all else fails...BE DIRECT.

I ask them if they have a budget in mind. If they begin to dance, I re-phrase it such as: "if it was two-hundred dollars a month, would that be too much?"

If you can't pin them down a little bit, chances are they are "tire-kickers" and you should move on so as not to waste your time.

 

[James]

Being on the life side I ask this question all the time, in direct fashion. As moonlightandmargaritas stated, if you don't have that where the hell would you even start???

One thing I don't do is ask the the question of "What can you cut out of your budget, like morning coffee at the coffee stand?". I'm not here to tell people how to live their lives or attempt to limit what makes them happy. To tell you the truth, I love coffee, if any *** came around and told me that 5-7 dollars every morning I spend on coffee and pastry is not needed, he would be told to take a hike!

 

[David C]

I don't always ask the question. Most often when I do ask, it is over the phone to people that I cannot get a reading on their income/lifestyle.

It is important for ME to sell THEM on paying what is necessary to get the insurance THEY want.

 

[GP32765]

I show them quotes on paper using a simple format so that about 5-6 plans are displayed. Say:
$119 basic
$176 middle plan
$236 high plan
$347 Cadilac plan

Then I say Mr. Jones You probably have a budget of what your looking to spend, I know that my wife and I are on a budget also. but I just wanted to try to find out if any of these plans fit in you budget. ( I tell them that my wife and I are on a budget so they know it is ok to be on a budget and it sets them at ease when if they can only afford so much

 

[Sir Ringo]

Are you familiar with the cotton system? It basically instructs you what you will need fromthem in order to help them, but this is a two appointment system. It does work well for those who follow it to a tee.

 

[justong]

Budget shouldn't be important. If you do a good job informing your customers the features and benefits of what you are selling then price is not important. Here is an example of this. I onced worked at a furniture store in Texas. We had a salesperson there that sold 5-10 times more than anyone else and nobody could figure this out. He took the same amount of customers, work the same hours and made three times more than anyone else. One day we challenged this salesperson to do an unthinkable task. He agreed to add 30% to everything in the store and to add 3 extra weeks for delivery to show us price was no object. He bet us, even with this great disadvantage that he could still out sell everyone. He was so right! He actually sold $35k dollars in furniture that day alone. The closest saleperson to him sold $4k. The moral of the story is price is no object.
P.S. Just so you all know, he did call and give every customer the correct delivery times and price the next day. The customers were thrilled.