Tip #378: The BANT Formula (Developed by IBM)

No matter what you sell, you need to build a relationship with a prospect during the sales cycle. And just as important as that is, you first need to determine which prospects have a greater probability of closing (immediate buyers versus tire kickers). If not, you can waste countless hours talking with prospects that have a low probability of closing.

Originally developed by IBM, the BANT formula is a great tool for sales leaders and salespeople alike. Why? Because it can help them quickly determine if a prospective buyer has the budget, authority, need and time when buying what you sell.

What Is The BANT Acronym?

B = Budget: Determines if there is a budget for what you are selling.
A = Authority: Determines if the person you are talking to has the authority to make a purchasing decision.
N = Need(s): Determines if there is a business need for what you are selling.
T = Time: Determines the timeframe for implementation.

Why Is The BANT Formula Such An Excellent Tool For Salespeople And Sales Leaders?

The BANT formula is an excellent tool for salespeople and sales leaders to use as it helps them quantify the subjective sales process (salespeople are notorious for chasing prospects that have little to no chance of being closed). More importantly, sales leaders now have a simple tool to help a salesperson manage a new sales opportunity.

One Key Component Of The BANT Formula:

Determining if a prospect has the budget for what you are selling is a critical step in the closing process. Without it, a prospect will always be thinking, "That would be a nice thing to have - if I only could afford it." Specifically, the budgeting process typically falls into three categories:

1. Does a prospect have the funds in the company's budget?
2. If a decision maker(s) does not have the budget; can they find the money?
3. If they don't have the funds, will it be available in the future (annual budgets are typical in larger companies)?

Although the "budget issue" is typically one of the most difficult parts to discover, it is one of the most vital parts of the BANT formula. Why? Because 1.) It helps a salesperson to determine if a prospect has the monies to fund the sale and 2.) It helps a salesperson to properly complete their sales pipeline report(s), AKA, a sales forecast.

The Key To The BANT Formula Is Asking The Right Questions.

There are many elements to a successful sales call, but the two most important ones are 1.) Being in control of the sales call and 2.) Asking targeted and specific questions. Seasoned salespeople and sales leaders alike know that it is best to avoid a sales pitch early in the sales cycle; instead, they know the best approach is to take a step back and ask some open-ended probing questions to ensure that there is a good fit and need for what they are selling. Oh, by the way, if you ONLY talk about the features and benefits of what you are selling, a prospect will quickly tune you out.

Know More Details (By Asking The Right Questions).

To help you determine if a prospect is actively looking to buy what you sell, we recommend taking this multi-step process.

Step 1: Determine why the prospect is taking the time from their day to talk with you.
Step 2: Determine what it would mean to them financially if they solved their problem (most people make buying decisions (in a B2B sale) if your product/services can make or save them money).
Step 3: Determine what the prospect's decision-making requirements are when buying what you are selling.
Step 4: Ask the prospect how their company makes buying decisions as well as this person's role in the decision making process.
Step 5: Determine if the person you are talking to can make the final decision when buying what you are selling.

Executive Summary: Ultimately, you need to start the relationship building process with a prospect by asking the right case-building questions - ones that will help you fully understand a prospect's needs, problems, frustrations and desires. Once this is done, you can segue to the budget discussion without asking if a prospect has the money to buy what you sell, putting you in a better position to forecast a sales opportunity.

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