2 minute read / Jul 25, 2013 / sales /pricing /startups /
Framing Your Startup’s Sales Pitch: Focus on Value, Not on Cost
Sales pitches ought to frame a product in a way to maximize the chances of success of a sale. One trend I’ve been seeing in pitches is to talk about how software can save costs by reducing a customer’s head count. A pitch that focuses on cost savings by reducing staff should be delivered only after much consideration because of a few objections created in these pitches that might slow or halt the sales process.
First, the pitch immediately provokes opponents to the sale. Suddenly, someone must rationalize a paycheck and compete with the software for the job. Opponents within potential customers complicate the sales process.
Second, framing the pitch this way caps the customer’s willingness to pay at the value an employee’s salary, limiting the maximum account size.
Third, the pitch creates an unnecessary either/or decision: a customer should choose either the software or the staff member. Forcing a staffing decision before a purchase decision slows down the sales process dramatically.
The alternative to pitching a product as a staff-based cost savings is to pitch the product as a tool which empower employees to become more productive or efficient. This tactic mitigates the three objections above.
The pricing plan can be value based (charge a fraction of the surplus created for the customer) instead of cost-based (capped an employee’s salary). Fewer opponents to the sale are created and the purchasing decision can be made with need to consider internal staffing or policy.
Every sales pitch is different. But being mindful of how to frame a pitch to align incentives and enable strong account growth is important to long term success.