From an SE/SO professional, can I rant here for a moment?
Marketing and Product rag on Sales a lot for discounting. Nevermind the fact that we own the touchpoints with an account, so it only makes sense that we'd know what any individual account needs. I've had this issue with Marketing and Product professionals since I started in Sales, and even more-so when I took over Sales Enablement and Sales Ops.
For one, pricing is a big deal, but value is bigger. I could sell you on that $1500/user easily by giving you a work product that factors the product roadmap, your business roadmap, and makes a compelling ROI case for you. I'm willing to give you those 8-11 hours.
But we both know it'll be wasted. Because in 90 days, Marketing will push a discount campaign that conflicts with preexisting agreements, and thereby throws all of that work product up in the air. We'd have to go back to square one and recalculate everything to see if a deal even exists. Or Product decides to drop the roadmap, delay a feature, realign to attempt to capture more of a saturated market.
You know who sets pricing? Pricing experts. And maybe, just maybe, if they spent five minutes on a discovery call with you, they'd understand why you bring up discounts, why I would rather give you the discount, and why both of us walk away knowing we missed an opportunity for quality relationship-building.
I tried this once with an account. We locked their pricing down, pushed a work product out justifying our use case. The account came back and requested we drop the discount, that they saw the additional upfront cost (nearly $40k+) as an investment in our roadmap that could return utility for them sooner rather than later. We made it six months post-close before Marketing and Product decided to completely drop the current roadmap and work on something else. I had to issue more than $22k back to that account, and we got forced into RFP by the parent org, which we lost and subsequently lost all business from them, domestic and international.
So. Thank you for airing your perspective. And just know that people like me have stormed in and out of meetings, and still do, trying to stop this BS.
I've been on both sides so I understand your perspective.
Everyone wants to sell on _value_ and in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000.
However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".
> "in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000."
In an ideal world, yes. In the average large organization in the real world, though, very few people care about "saving employee hours". Particularly in middle management.
When a team's workload falls by 50%, there's rarely a magical stream of "useful work" that arises to replace it with. More likely, the team just sits around twiddling their thumbs; you either need to fire them, or concoct some busy work for them (defeating the point of the exercise in the first place).
Middle management are never going to gut their own team, because their headcount is what justifies their own position. This is also why your organization never has the budget for $10,000 - any money defaults to headcount, because headcount entrenches managerial authority.
Unless you're selling to C-suite (and can quantify the headcount reduction), "saving employee hours" is a terrible sales proposition for large enterprises.
> However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils".
So.. a bigger question. Why doesn't budgeting work like this?
If the employees that you saved time from are hourly, you can just cut some hours and probably save money. Although you have to offset that with reduced morale if you cut employees/hours.
If you're saving time for salaried employees, you probably can't just cut hours. Now you have 1,000 spare man-hours this year, what do you do with them? If you saved 1000 employees the same amount of time per day, each of them has an extra 13.7 seconds per work day. A basically useless amount of time. If you freed up that time from only 100 employees, each gets an extra 20 minutes a day, which is an actually useful amount of time, almost 2 extra hours a week.
Assuming that you have saved a significant enough amount of time per employee, then the question becomes do you actually have productive work for them to do? You only saved money if you were going to hire people that you no longer have to hire, if those employees can create something with that spare time that generates revenue, or if you saved enough time that you can fire employee/s.
It's the same concept as discounts. Yes, discounts can save you money, but only if it was something you were going to buy anyways. It's like buying a new phone because it's 20% off. If your old phone was on it's last leg or you were going to buy one anyways, you saved 20%, yay. If you have a brand new flagship phone and you buy a new one just because it's 20% off, you haven't actually saved anything.
right. the money has to come from somewhere. you dont get an "employee hour rebate" from employee hours saved. maybe you should, but in reality it doesnt happen. anyway employee productivity claims necessarily get taken with a huge grain of salt. need to hit people over the head with the benefits.
Never sell your roadmap. $50k isn’t worth one of the few advantages startups have: agility. It’s also distracting. You get to have these fun hypothetical conversations instead of talking about the product you have. Sell what’s on the truck.
Was the product work discussed and planned with the product management and the developers? Did they understand what the client wanted? Did you follow up and liaise between product development and client during all this time?
To be fair one $22k customer is not much for a SaaS business with many or large customers. It does not justify spending months of work on a "feature" unless other customers also need it.
More importantly. Do you follow up on the feature and put product development in touch with the client to make it happen? It's always easy for sale to discuss whatever directly with the client and swear it's coming next, but what the client wants is super blurry (at best). Nobody can work on a task they do not understand, especially 3 months later when there is some (planned) time to work on it, so it's simply dropped. Thus is the cycle of how things are promised and cancelled.
It's enterprise sales so every contract is assumed to be above $10k.
One $22k contract may a lot for the bonus basket of the person closing the sale, but it is not be much for the company as a whole compared to the 20 other contracts being negotiated and the 200 current enterprise customers, and it definitely means nothing for the product/marketing groups who won't see a dime.
That being said I absolutely agree that if a customer is willing to pay for something, it's a very clear indicator of interest and it should be investigated. Hope it is easy enough to add and it is useful for every other customer!
Marketing and Product rag on Sales a lot for discounting. Nevermind the fact that we own the touchpoints with an account, so it only makes sense that we'd know what any individual account needs. I've had this issue with Marketing and Product professionals since I started in Sales, and even more-so when I took over Sales Enablement and Sales Ops.
For one, pricing is a big deal, but value is bigger. I could sell you on that $1500/user easily by giving you a work product that factors the product roadmap, your business roadmap, and makes a compelling ROI case for you. I'm willing to give you those 8-11 hours.
But we both know it'll be wasted. Because in 90 days, Marketing will push a discount campaign that conflicts with preexisting agreements, and thereby throws all of that work product up in the air. We'd have to go back to square one and recalculate everything to see if a deal even exists. Or Product decides to drop the roadmap, delay a feature, realign to attempt to capture more of a saturated market.
You know who sets pricing? Pricing experts. And maybe, just maybe, if they spent five minutes on a discovery call with you, they'd understand why you bring up discounts, why I would rather give you the discount, and why both of us walk away knowing we missed an opportunity for quality relationship-building.
I tried this once with an account. We locked their pricing down, pushed a work product out justifying our use case. The account came back and requested we drop the discount, that they saw the additional upfront cost (nearly $40k+) as an investment in our roadmap that could return utility for them sooner rather than later. We made it six months post-close before Marketing and Product decided to completely drop the current roadmap and work on something else. I had to issue more than $22k back to that account, and we got forced into RFP by the parent org, which we lost and subsequently lost all business from them, domestic and international.
So. Thank you for airing your perspective. And just know that people like me have stormed in and out of meetings, and still do, trying to stop this BS.