[patio11]

There exists a continuum of SaaS sales strategies. One end of the spectrum is high-touch sales, which is Oracle's "We send you a sales guy, a supporting engineer, a bunch of Powerpoints, and enough steak and wine to feed a European wedding reception, and afterwards you pay us several million dollars" model. The other end of the spectrum is low-touch sales, where the website/email/product/onboarding tour does the heavy lifting and contact between the customer and the company is, to a greater or lesser degree, seen as a bug to be fixed in a later version.

An entire constellation of decisions about one's company/customers/product/pricing/business model/etc gets determined instantly when you pick your point on this continuum. (Or, equivalently, you get placed on the continuum basically instantly when you make most consequential decisions about a SaaS company/product/etc.)

The reason this article is on this blog is that there is a playbook for high-touch SaaS businesses which is amenable to venture funding and that is not exactly true for low-touch businesses. (There exist a handful of exceptions, but people consider B2B high-touch sales to be a solved problem.) Additionally, and more directly responsive to your question, there exists at least one popular and widely listened to corporate voice who quite literally wrote a bestselling book which might as well be subtitled Low-Touch Sales Mean You Don't Have To Take Dirty VC Money.

(Cards on table: My business is mostly on the low-touch end of the spectrum but I work with people all over it. There exists a shedload of money to be made in software and a variety of ways to make it effectively at the traditional points on the spectrum and at emerging points besides.)

[shostack]

Interesting how you described the big enterprisey sales experience there.

I have been leading a large-impact project internally where we need a solution that has potential vendors at different places in this spectrum.

Inevitably, the largest and most "enterprisey" companies had what I would consider by far and away the worst sales experiences. Very clearly sales people who are used to dealing with business customers who probably won't have anything to do with the actual product in the day-to-day.

I was given vague salesy answers that clearly intended to skirt around the issues I presented, and they had no issue trying to exert pressure come monthly/quarterly sales quotas. Exploding offers for a large purchase of this nature are simply not appropriate (and certainly not appreciated).

Perhaps my biggest gripe has been with the lack of transparent pricing for any sort of B2B SaaS where you are on the highest tiers, and thus need "custom pricing." I understand some things are variable and need to be custom scoped, but in this case that was only true for some add-on services vs. the core product with volume-based pricing. As a prospective customer, I absolutely loathe these sorts of pricing negotiations. The time wasted on the back-and-forth is also a giant PITA and doesn't win the companies any points. It is always very obvious that their initial price is a high-ball offer, and they expect you to negotiate, which means that they in part are structured/incentivized to make some margin/sales commission by not giving the customer the fairest price they could. This in and of itself starts the relationship off on the wrong foot.

In general, I wish there was a way to choose the type of sales experience I want before beginning the process. If I'm a key decision maker and care more about the actual functionality, UI, integration, etc., I want someone knowledgeable of the technical aspects of the product. Someone who will be upfront on the product's shortcomings (to avoid surprises that result in a pissed-off customer down the road and make the buyer look like an idiot). I also want someone who can communicate with zero sales fluff, and give me fair and transparent pricing. Is that really too much to ask? Apparently so when it comes to enterprise B2B sales. Over the years I've often had the distinct impression that many of the salespeople I've dealt with exist simply to funnel communication between a sales engineer. I get their value if they are out hunting and bringing in their own prospects, but these have all been for inbound leads where I've contacted them.

Also, do all those fluffy buzzword-filled sell sheets and cheesy marketing videos devoid of any meaningful, tangible content actually add value for anyone? I had one sales guy send over an (often unrelated) white paper or marketing video link with every. single. email. I ultimately had to tell him to stop because it wasn't adding any value and was doing more harm than good.

Guess this turned into more of a rant...but if anyone has good solutions for dealing with the above I'm all ears. I've negotiated these kinds of contracts for years, know how the game is played, and play it reasonably well (IMHO). Doesn't make it any less frustrating.

[beachstartup]

the vast majority of potential customers (leads) are a waste of time, for a million different reasons. they want you to invest in the process because that's the only way to signal you are serious.

try doing all of the above, for 12-18 months, and then learning that the customer never intended to go with your solution, but was rather just leading you on to get a price foil for a competitor that he already decided he was going with. you'll be a different kind of angry. a real kind of angry - because there are real consequences and costs, in dollars, and time, to that kind of fuckup. this is very different from a real evaluation, and the only way to avoid that kind of scenario is to get investment from the buyer. a sales organization that runs into that kind of situation with any kind of regularity is dead in the water because they're spending all their time on people who don't want to give them any money.

having said that, what you want in a sales process does exist, it's just that it's usually the smaller, younger, hungrier, less "proven" companies that are willing to withstand the abuse to provide it. it'll all sound great, until it's time to sign the contract, then all of a sudden any of a million reasons to not move forward are produced from thin air, and instead, a larger more established competitor that practices universally disliked sales techniques gets the $ and the validation.

in short, be the change in the world you want to see. next time, buy from a smaller company that puts your career at risk. it's hard to do when you have large budgets because the purchasing process is basically just a giant a cover-your-ass operation.

[shostack]

I appreciate your point. But all of those consequences you listed in your example stemmed from the customer trying to get a price out of you for pricing leverage with a competitor.

If the company being used in this regard simply had transparent pricing, they wouldn't have to waste those sales resources in the first place.

I also think in this day and age of anonymous online review sites, Quora, Reddit, etc. that a lot of this pricing information gets out there anyway, NDA's be damned. So it almost seems like a futile battle.

I agree though with your statement on types of companies, and ultimately decided not to continue considering the large established enterprise players and focus more on the smaller, younger companies. There was still pricing negotiation and other sales process challenges, but overall the process was much less painful (still not anywhere approaching enjoyable though).

[beachstartup]

getting to a price is about 1% of the sales process, but it's the only thing the customer thinks he wants, so it's used as a gatekeeper.

also, the companies who don't publish pricing do not want people who are interested in just the price. they're usually selling something that has a lot of intangibles like a custom crafted solutions or quality of service. by reducing their entire sales pitch down to a single number, they're devaluing themselves before they even get a chance to pitch their solution. by not even being willing to communicate with a sales person the details of what you want, you immediately disqualify yourself.

in my opinion it should take about 30 minutes to an hour of your time to be able to get a price out of an enterprise product or service (this includes requirements gathering, specifications, etc on the part of the sales person). anything less, and you're not dealing with a serious buyer. usually this is just one phone call and a follow-up email with specs. in our business that's enough to generate a proposal with a $ amount on it.

[shostack]

I think the % of the process that is spent on pricing is highly dependent on the situation and players. In this particular case, I've had some where it was very quick and clear cut, and some where it was very clear they were trying to jerk me around on it to see how much they could get out of me and it took waaay too much time to get to the bottom of that.

I likewise will also agree that there are valid reasons for not publishing the price as a way of better qualifying leads before first sales contact.

That said, that still doesn't justify why pricing can't be transparent and clear cut once the lead is qualified and they are in the sales process. Simply knowing that the initial pricing presented is not final and needs to be negotiated is a giant PITA and still a waste of time. If you claim pricing is such a small piece of it, why then do companies bother with the negotiation piece if the actual amounts might be trivial compared to whether or not they close the deal? Does the psychological benefit of conceding to a lower price (from an already padded initial price) really make that big a difference in close rates?

I agree pricing discussions should not take longer than 30 minutes, but unfortunately, many sales people I've dealt with prefer to play car salesman style games.

Do you have any suggestions on how to approach such conversations to get the best/fair price with a minimum of back-and-forth headaches that can cut through some of what I've described? I've tried a few different approaches with varying success and am always open to others to test out.

[beachstartup]

yeah. tell the sales guy what your budget is, and have him suggest some solutions that will maximize that value for you. you don't have to tell the exact truth here. a good sales person will use that as a starting point and craft a series of further questions and/or discussions for you to hone your needs into a specification that can be delivered.

too many people who usually don't buy things try to play amateur negotiator and refuse to name a number. it's really transparent and frustrating. generally these deals don't go through because the person doing the buying doesn't know what the hell he's doing and he assumes a combative relationship instead of one that tries to solve a problem.

especially when you spend hours crafting a proposal and getting input from sales engineering and executive management and accounting and client delivery, and the first thing that comes out of the customer is sticker shock because the customer refused to state his budget and requirements because he read it in a self help book somewhere.

again, most of these sales 'techniques' really are just designed to not waste anyone's valuable time. buyers will waste their own time and not even realize it because it feels like you're "getting one over" on them when in reality you're just being a moron.

[hiharryhere]

This is a really well written comment. You're dead right that sales isn't a specific thing, there's a whole range of touch levels.

When you consider this, the delineation between marketing and sales becomes increasingly blurred.

[isb]

and which book would that be? :)

[loumf]

I'm going to go with 37Signals.