price pressure

price pressure

Why is SaaS so hard to sell?

In some ways, the answer is simple it's not a product - you can't pick it up and look at it, shake it or walk around it to see what you are getting for your money. It's a service, so to market it what you need to have is good processes, good people and some physical evidence. But, this has been known since the 1980's. Organisations have been marketing their services this way for more than 30 years. So, that can't be the reason it's so hard to sell.

It's so hard to sell because you have to sell on price or value. However fancy you want to be, the easy and lazy way to sell is to say it's cheaper, because it is cheaper than buying outright. Even, with this as a starting point, some articles about preparing to sell recommend getting ready to discount!

Just think about this for a minute. You have a product that is so much cheaper it could be 20% or 10% or 5% the cost of buying the product outright. Giving the customers savings of 80%, 90% or 95% and you want to start discounting!

Here's some useful information on price pressure that will help you.


 logic & emotion

logic & emotion

Why is it so hard to persuade executives to buy complex IT services?

Selling to IT is easy because they understand the technology and the jargon. Selling to executives is hard because they don't understand the technology and the jargon. How can you persuade an executive to buy something they don't understand?

You need advanced persuasion. You need logic and and you need emotion.

Here's some useful information on logic and emotion that will help you.


 value

value

Even after I explain all the features, they still won't buy. Why?

So, let's assume you have tried selling on price and it's not getting you the business results you want. Time to try selling with value. You pay this much and you get all these features. We see screenshots, menus and what pressing the F4 key does. Usually followed by 3-dimensional rainbow coloured graphs. Still not working? Maybe because your customers already have most of these features in software they already own.

Instead before you show them anything else, first convince customer executives that SaaS will make a difference to their results. When your presentations, your documents and your people explain to executives what business results will change: increase or reduce, then you will sell them far more.

Here's some useful information on value that will help you.


 strategic account management

strategic account management

Why is retaining customers so hard on SaaS?

Once you have sold to a customer, then because you are selling at a smaller monthly fee than outright purchase, you must retain them. If you don't retain them for at least the equivalent of the outright price, then your business will be worse off. Don't fall for the classic business mistake of selling cheap so you can build volume fast. Bankruptcy courts are filled with owners who believed that myth.

One of the competitive challenges of SaaS is that customers can cheaply try out competitors' products and switch at little or no cost. 

To retain customers you need to remind them about the business results they are getting. To retain customers you need to show them ways to get even better business results from SaaS. But, it you really must retain customers then you need to add value beyond the service of SaaS: add strategic value.

Here's some useful information on strategic account management that will help you.