Product excellence gets you in the game — but Price, Placement, and Promotion win it.
The good news is that enterprise SaaS founders are product-centric and tend to have a clear understanding of what features are needed to satisfy the market requirements. The bad news, though, is that Product is only one (25%) of the four “P’s” of marketing (Price, Placement and Promotion are the other three).
In other words, founders tend to focus mostly on the product and not enough on the selling motion (promotion) and the product pricing structure, which amount to 50% of the four P’s. Moreover, at exit, most buyers assume the software works, so they tend to focus on the strength and predictability of the sales process.
Furthermore, too many smaller and midsized enterprise software companies are too quick to demo their software and reveal the software price with not enough focus on developing a compelling business case to be delivered in conjunction with the software price.
Founders, who also lead the sales effort, are particularly prone to talk about the product and believe that when they win, it’s due to product superiority and when they lose, it’s due to price. In reality, deals are won or lost based on who presents the most compelling (and believable) business case and its associated value. We find that many companies don't convert (lose) 25% of their customer demos, to deals, when it should be only 10% and they don't really know why this occurs.
Perceived Product deficiencies are a convenient excuse for the customer, and those perceived deficiencies were most likely just “nice to haves” that had minimal relationship to value. SAP rarely has product superiority and is always the highest price supplier, but wins consistently by leveraging the business case method to present the superior value to customers.
Ultimately, the product capabilities are important and need to meet the customer’s requirements, but that by itself is not enough to win consistently. MOIC Pipeline Grader ensures that once product uniqueness has been identified, the focus shifts to establishing a compelling business case with the decision maker (aka Executive Sponsor) using the customer’s data to negotiate and prove superior value.
If your enterprise SaaS company struggles to resist the temptation to rely solely on product superiority or low price instead of business value, sign up for a trial of Pipeline Grader at moicpartners.com to enforce a sales process that will ensure consistent success by leveraging the Business Case Method of selling software.
