I do this all the time, and it always works. Just today someone asked for a discount, and I wrote a similar email to this one, explaining why we don't give discounts, our products are great value, etc. I did offer them an extra 1 month trial for free, as they were just starting a new business, and they were very happy with that and will probably become a long-term customer.<p>I think people are just programmed to ask for discounts. However unless there is another product which gives them all the features they want for a lower price, they will almost certainly buy your product even if you don't give them a discount (as long as you're nice about it). The only time I would give a discount is if the person genuinely can't afford it, but that very rarely happens (as my prices are pretty reasonable).
Seem like pretty vanilla sales tactics to me. Even if choosing the more expensive company was the better investment, this is just rationalisation.<p>Some really good tips (I thought) for selling at a higher price than your competition: <a href="http://everyonenegotiates.com/selling-high-price.php" rel="nofollow">http://everyonenegotiates.com/selling-high-price.php</a>
You should also write to the cheaper company. Or was the lesson supposed to be that writing meaningless platitudes like 'race to the bottom' is good marketing? Perhaps it is, but personally, I would feel insulted.<p>There's no worse assumption that cheaper product is worse, especially when it comes to SaaS. What if FooCorp has automated much more than Acme, and even with lower prices actually has both better profits per sale and better functionality?<p>Sure, FooCorp should work on their marketing, but that's in their interest, not yours. A perfect company from the customer's PoV is one that is almost unknown, provides the best value per money unit, and has just enough customers to be alive. Then you have a competitive advantage over competition using popular and expensive solutions.
If I got an e-mail like this, I'd most likely go with the competitor.<p>> <i>The FooCorps's of the world have spent a couple decades now in a the race to the bottom and it shows. I have no doubt you can get their product (or a whole raft of others) for a few bucks cheaper than us.</i><p>AKA. "Our competition suck and it shows."<p>> <i>Our product, Acme, is different.</i><p>Of course.<p>> <i>Look, FooCorp's customers are switching to Acme in droves because we're investing heavily in great customer service and innovation.</i><p>Yeah? I'd like to see data that supports it. This is one of the most common blatant lies in marketing (sure, it is true for some specific values of <i>customers</i>, <i>switching</i> and <i>in droves</i>) and I see no reason to trust it at face value; the sole inclusion of this sentence feels like evidence against company quality.<p>The same e-mail could be sent by FooCorp or any other competitor in that space. There's no Acme-product-specific information here, just universal marketing slogans.
Sales 101 is being able to take the conversation away from "price" and change it to "value". 20 years ago, my friend was selling IBM desktops and servers to educational institutes and I learned this from him. There was no way IBM could compete against the prices of those small computer stores, so he had to actively show how buying IBM would save money over the long run, etc. He was a very good salesman so it worked pretty well.
This blog post may have been worth millions of dollars in sales for Acme if we knew the actual context.<p>Acme has chosen to provide a better value prop. They use this to justify their additional cost 100 times a day. The CEO noted that the value prop was subjective (does your company value XYZ?), and simply justified the gap. It's not magic, its logic.
Maybe this is due to lack of context, but with all that "designed to improve your company performance in the critical area" and "investing heavily in great customer service and innovation" that email sounds terribly enterpriesey to me. It all could be boiled down to a one-liner in spirit of "Sorry, but we can't offer our services any cheaper. Our prices are indeed higher, but the services are better than competitors and we actually provide more value per price unit. Please, take this into consideration."<p>And maybe that's just my tastes, but negative commenting on competitors with all that "race to the bottom" and "customers are switching in droves" stuff doesn't sound any good to me. Even if competitor is really a complete shit.<p>Just my opinion. I'm not a businessman.
I've worked in enterprise SASS, salesman know not a lot about their own product, ROIs are plucked from asses and often it's all fibs.<p>Bear in mind I thought our sales guys were great, our product pretty good vs the field.<p>But basing your purchase on an email like this?<p>You're a complete sucker. All that happened was that a salesman just called their bluff. And they were impressed by it!
Terrible grammar aside, I don't get it. Perhaps due to the lack of context and purposeful obfuscation for the blog post.<p>If you've already evaluated both offerings and found Acme's to be significantly better independently then this sort of works as a justification for the higher price, but I don't see the part where it shows it is any better than FooCorp's thing. Yeah, sure, a bad transaction will cost you money... how do I know FooCorp's thing is more or less likely to generate a bad transaction?<p>Out of context it reads like "if brand X fails you'll be in deep shit, and we're not brand X, so buy our thing which costs more than brand X's thing".<p>Who says brand X fails more often than brand Y? Maybe it does, maybe it doesn't, but the logic train bumped off the rails a bit in the middle for me.
Well that is what everyone says. The thing is that more money does not equal more value.<p>In "IT" I find that it is actually more common for the best product to be the ones that are in the mid price ranges. Not counting open source stuff ofc.
The only fly in this sales-technique ointment are the customers whom you convince, then in-turn expect the world from you because they chose "value" over "price". When customers pay a premium, their expectations are much higher, and unhappiness can set in if you don't manage these well.<p>This might not be something sales can control, but be careful in the claims you make during the sales process as some customers are listening and will be holding you to your promises.
I love it, pure business speak ans number from the hat, zero technical details. Use it when the buyer is boss of the buyer.<p>When the user pays, send screen caps and detailed explanations.
"We're designed to help improve your'e company's performance in the critical area of XYZ."<p>- your'e<p>- company's<p>If it is worth millions of dollars do a spellcheck.
Lots of companies pay a premium for receiving the 'best'.<p>He should put whatever in his email in his normal pitch(website, or whatever), instead of trying to compete against the bottom dwellers of the world
I've never had anyone ask for discount for my SaaS (BugMuncher), nor has anyone ever complained about the pricing. Should I take this as a sign to put my prices up?
This thread is really interesting. You can see a bunch of engineering types doing their best to slice and dice this from a million logical angles. I would have done the same 20 years ago when I launched my product and went out there to sell it.<p>The difference? I was honest enough to recognize I was going to approach sales as an engineer. I got help in the form of experienced non-engineer sales people tutoring me by going on sales calls with me and doing review sessions after every sales call.<p>The first two quarters sucked. It took me about three months to truly stop thinking as an engineer and another three to optimize my style, delivery and approach. We closed the third quarter with over $600K in sales, most of which I was responsible for.<p>I would eventually hire sales and marketing people so I could devote more time to engineering. I felt it was important to understand the sales process by becoming a sales and marketing person myself (for about two years on and off) before staffing thise positions. I have always been glad I took that approach. We engineers are great about building products but absolutely suck at selling.<p>The letter that is the subject of this thread isn't fantastic. That said, it achieved several things all the engineers on HN are ignoring:<p>- Made a sale! Do not underestimate the importance and power of cash in the bank!<p>- It deprived a competitor of revenue. Every dollar you take away from your competition is a dollar that goes towards potentially taking them out of the race, particularly with low price sellers.<p>- It was compelling enough to take someone who was on the fence and flip him to the point of having him write a blog post about the experience<p>- It probably created a long term believer and evangelist for their brand, product and price model<p>- It confirmed that this tactic works. They can use it with new potential customers, evolve and fine tune it. They might also consider integrating aspects of this message in other marketing efforts.<p>- It revealed that the competitor's low price position is tenuous at best<p>- It started a relationship with a new customer in a very positive tone. If nurtured this could lead to more sales from word of mouth<p>- Because of some of the above their cost of customer aquisition is likely to reduce over time<p>I could probably add to this. The point is that most of the criticism here is misplaced. This letter isn't genius. It doesn't have to be. It only has to be effective. That, it is.<p>I don't expect everyone to get this. In typical engineer/HN fashion this will be sliced, diced and down-voted from a million of irrelevant angles. That's OK. I get it. The interesting thing is, regardless of what is said here, that letter still made a sale and accomplished all I have highlighted and more.
The cognitive dissonance here is striking, "the difference in price is peanuts" vs. "I won't lower my price."<p>How exactly did you find this compelling again?
One day Pablo Picasso was sketching on a park bench. A woman recognized him as the famous artist, and asked him for a portrait sketch. Picasso flipped to a blank page, looked at the woman for a moment, and with a few strokes of the pencil drew her abstract portrait.<p>The woman looks at the drawing and is ecstatic. As she reaches for it, she asks how much it will cost her. "Five thousand," he says. "Five thousand?! But that drawing took you less than a minute!" Picasso replies, "No, madame, it took a lifetime."<p>* * *<p>The point being: The email is worth nothing; the value is in the person writing the email, and their knowing what to say.