Stuff SaaS Sales Doesn't Want You To Know
1. They can discount without needing approvals
“I will need to see if I can get approval from management” or something along these lines is probably the biggest BS in SaaS sales. In particular, if it is used early in a negotiation process.
The majority of SaaS tools have very high gross margins, which allows providers to adjust pricing flexibly to accommodate for a buyers’ appetite. They’ll typically start high and come down if needed.
What they don’t tell you is that a generous amount of room is given for discounting. For SaaS, discounts can be up to 50% without raising alarms or kicking off complex approval processes.
50%!?!
Therefore, the price of your SaaS tool can be 2x more expensive than it needs to be, purely based on a decision made by a salesperson (and their line manager). This is where your negotiation strategy is critical!
2. They don’t know what price to give you
People might think that SaaS pricing is based on logic. However, the reality is far from it. Because SaaS tools have high margins, salespeople are often given a lot of room to discount according to what a customer is willing to pay.
Many salespeople scratch their heads figuring out what price to quote a buyer. Because they can alter prices so wildly, they often get confused by what a logical price looks like. If you have received a quote recently, chances are that the person who shared it with you had to brainstorm with a handful of colleagues.
3. Price expirations are BS
SaaS quotes often come with an expiry date. This is primarily done to influence buyers to work towards a deadline – think of it as a psychological anchor that they place.
When such a deadline passes, half the time the initial prices are honoured. The other half of the time, salespeople will try to protect their integrity by altering the price.
What they don’t want you to know is that this is artificially created and if put under pressure the original price can still stand.
4. They purposely wait hours before sharing a revised quote
This is often done in connection when salespeople tell you that they require management approvals and all sorts of other things they need to do when revising a quote.
The reality can be that a salesperson doesn’t require any approvals, however, they don’t want to send out the quote too quickly, fearing that the buyer will not believe approvals were actually needed. So instead they will sit and wait a while before sharing a quote to make it look like they needed to make the rounds.
