3 ms·

How Cheap a Product Can You Have And Still Have Salespeople?

17 points by jasonlknm 13y ago

patio11 13y ago
It might not look like it, but this is one of the most important things to hit HN this month (for those of you who have SaaS businesses). I sort of wish I had written it. The math comports with the experience of myself and consulting clients (with the obligatory "It's handwavy, break out your own Excel spreadsheet to see if it makes sense" proviso), and "You can use hybrid high-touch/low-touch sales processes on accounts in the $80 to $250 a month range" is one of the best kept secret weapons in SaaS right now. In particular, note that bit about the "$99 a month" thing. I once had the educational opportunity to work in the same room as a sales guy who was working a very similar queue of inbound leads, and was mentally scoring his conversations while doing my gig. I'm pretty sure that he added north of $1,000 in monthly recurring revenue in a single day. At any non-broken SaaS company, all guesses for churn would mean "Holy cow he is generating a stupefyingly high ROI. He's going to be cash flow positive after doing this for like 6 weeks and then be a total gravy machine even if he's as good at the discussion about his commission check as he is on these phone calls."
- acw 13y ago
  Quick question: Do businesses expect phone support if one is selling/onboarding by phone? My gut is that they would, but wondering if I'm missing something.
solistice 13y ago
You can go as low as 60ct. At least that's the amount of money I pay for a scoop of icecream at the local ice cream place, and they have multiple people doing sales, as well as manufacture, distribution and payment processing. Technically, an ice cream palor has all the components a PaaS business has, but they have incredible conversion rates due to highly qualified leads, and their turn around time for a single sale is within less than a minute. Now when you go to an ice cream parlor, a lot of the information is implicit. You're going to get some ice cream, these are the flavours we have, these are the flavours you like, and this is the price of one scoop. The sales person doesn't have to explain to you why you should buy ice cream, which is why these "sales conversations" boil down to "I want one scoop chocholate and one scoop lemon". Odds are that you can do that in your SaaS business to. Of course, what you're selling isn't commoditized like ice cream. You'll need to do some explaining, and there are things that will come up again and again. Now the laziest way to answer these questions is the veritable FAQ. But the moment I switch to your FAQ, buying is put off for a while. Hell, I might even decide it's too much of a hassle to buy anything from you. The most effective way seems to be to put those questions into your funnel before a customer gets to talk to your inhouse sales team. In fact, explain everything about it, and then offer a free call on how to tailor your solution to their business. That way, all questions about the merit of ice cream, the price of ice cream, aso. are out of the way, and the sales conversation is stripped down to "So what kind of ice cream? Want sprinkles?" If you use your sales people for what they're worth, I believe you can press the price down even further.

17 points by jasonlknm 13y ago

It might not look like it, but this is one of the most important things to hit HN this month (for those of you who have SaaS businesses). I sort of wish I had written it. The math comports with the experience of myself and consulting clients (with the obligatory "It's handwavy, break out your own Excel spreadsheet to see if it makes sense" proviso), and "You can use hybrid high-touch/low-touch sales processes on accounts in the $80 to $250 a month range" is one of the best kept secret weapons in SaaS right now. In particular, note that bit about the "$99 a month" thing. I once had the educational opportunity to work in the same room as a sales guy who was working a very similar queue of inbound leads, and was mentally scoring his conversations while doing my gig. I'm pretty sure that he added north of $1,000 in monthly recurring revenue in a single day. At any non-broken SaaS company, all guesses for churn would mean "Holy cow he is generating a stupefyingly high ROI. He's going to be cash flow positive after doing this for like 6 weeks and then be a total gravy machine even if he's as good at the discussion about his commission check as he is on these phone calls."

acw 13y ago
Quick question: Do businesses expect phone support if one is selling/onboarding by phone? My gut is that they would, but wondering if I'm missing something.

solistice 13y ago

You can go as low as 60ct. At least that's the amount of money I pay for a scoop of icecream at the local ice cream place, and they have multiple people doing sales, as well as manufacture, distribution and payment processing. Technically, an ice cream palor has all the components a PaaS business has, but they have incredible conversion rates due to highly qualified leads, and their turn around time for a single sale is within less than a minute. Now when you go to an ice cream parlor, a lot of the information is implicit. You're going to get some ice cream, these are the flavours we have, these are the flavours you like, and this is the price of one scoop. The sales person doesn't have to explain to you why you should buy ice cream, which is why these "sales conversations" boil down to "I want one scoop chocholate and one scoop lemon". Odds are that you can do that in your SaaS business to. Of course, what you're selling isn't commoditized like ice cream. You'll need to do some explaining, and there are things that will come up again and again. Now the laziest way to answer these questions is the veritable FAQ. But the moment I switch to your FAQ, buying is put off for a while. Hell, I might even decide it's too much of a hassle to buy anything from you. The most effective way seems to be to put those questions into your funnel before a customer gets to talk to your inhouse sales team. In fact, explain everything about it, and then offer a free call on how to tailor your solution to their business. That way, all questions about the merit of ice cream, the price of ice cream, aso. are out of the way, and the sales conversation is stripped down to "So what kind of ice cream? Want sprinkles?" If you use your sales people for what they're worth, I believe you can press the price down even further.