2 common B2B SaaS sales objections (and how to handle them)
Imagine going to Starbucks. You order a latte, and as you reach for your wallet, the barista says, “That’s $3.00, and just $2.00 more to add a bagel. Would you like the bagel?” You say, “Yes,” take your food, and leave.
It’s a completely automatic, transactional sale. The barista didn’t have to sell you on the benefits of the latte or the bagel. He didn’t have to overcome any objections. All he did was present the information, give you the product, and take your money. Anyone can do that.
SaaS sales is different. There’s big money on the table, multiple stakeholders to accommodate, and value propositions which are more complex than choosing what to eat for breakfast. There’s friction in SaaS sales. It’s what makes the job tough—but it’s also why salespeople exist. It’s why they’re better compensated and harder to replace than a barista.
One of the myths of SaaS is that the products are so good, so easy to use, so quick to deploy ... that the product sells itself. [...] But as many startups discover to their horror [...] this is far from the truth. Even with early viral growth, SaaS products don’t sell themselves. — Mark Cranney, Operating Partner at Andreessen Horowitz
And yet, so many SaaS salespeople expect their job to be just as easy. That’s why they get tripped up when customers hit them with these objections:
- “Your product is too expensive.”
- “Your product doesn’t have the right features.”
Pricing and features are obviously important, but unlike baristas, SaaS salespeople can’t just recite that information and see who bites—their job is to show buyers what value their product can bring to a company. Let’s get into how you can move past these objections and keep the focus on value.
Objection #1: The price is too high
When mediocre salespeople hear “your product is too expensive”, they take it at face value and give up on the deal. Good salespeople are able to take it in stride.
What the pricing objection really means is that you haven’t properly communicated your product’s value. You need to work together with the prospect to understand who will be using your product and what benefits they’ll get: increased productivity, better margins, more customers—whatever that value is, make it clear to the prospect that it outweighs the price.
Plus, a lower price doesn’t actually make a product more attractive—in fact, it does the opposite. Yes, everyone would like to pay less. But, as sales expert Lawrence Steinmetz points out in his book, most customers understand that buying from a cheap competitor will lead to “intolerable” problems.
Look at it this way: what if you were looking at the menu for a nice-looking steakhouse and saw they charged the same as McDonald's? Sure, you might be happy to save some cash, but you’d also worry the food might make you sick. Your product is a ribeye, not a Happy Meal.
Back to value
Here are a few ways to navigate the pricing objection.
- Don’t even discuss price until both you and the customer understand the value your product can deliver. Remember: this isn’t a Starbucks transaction—price isn’t relevant at the beginning of the conversation. If they ask too early, say something like, “Well, what’s your budget for this project? That’ll impact how we can structure the deal.”
- Refuse to lower the price. When you doggedly stand by your price, it tells the customer that you believe in your product’s value. If they demand a lower price, say, “This is the best deal we can offer you,” and steer the conversation back toward all the issues your product can solve at the available price. In the words of Evan Carmichael, the founder of EvanCarmichael.com: "You don’t want to compete on price. Price is the worst way to stand out. It’s not a long term sustainable advantage."
- Reframe the issue. Shift the conversation from what they’ll pay upfront to what they’ll save in the long run. A recent Gartner survey reveals that the majority of companies who buy SaaS do so because they believe it will ultimately save money—in other words, they know that the value over time outweighs the price. Remind them of that by asking something like, “But what will it cost to keep doing what you’re doing?”
You might think you’re building a strong relationship by giving the customer the discount they want, but really, you devalue your product by telling them, “You’re right, it really isn’t worth what I originally said it was.” That customer will ditch you the second a cheaper option comes along. But, if you focus your sales conversations on what your product provides, customers will start to see the price as an investment in their future, rather than just another expense.
At Close, we encounter the pricing objection all the time. Prospects say they just want a simple CRM for calls, they love the product, but it's just too expensive.
We then learn more about their sales process through a simple series of questions:
- How many sales reps do you have?
- How many calls does each rep make a day?
- How long does it take them to log a call in their CRM?
- How much time do their reps spend on average with data entry in their CRM?
- How much are they paying their reps per hour on average?
- What's their average reach rate, qualification rate and close rate?
Many times, when prospects do the math, they're able to see that even though our inside sales software costs more than other CRM tools, they're still getting the better deal because Close can improve their sales productivity more than other vendors. It's simple math, once they do the numbers, the value becomes apparent.
Think of ways to do this for your own product. If your product costs $30 more per user than an alternative vendor, but it'll help the prospect to make an additional $600, it would be penny wise and pound foolish to get hung up on price.
Objection #2: I need a new feature
“If I had asked people what they wanted, they would have said faster horses.”—Henry Ford
Common scenario: a SaaS salesperson thinks they’ve found the ideal prospect. Product solves a problem? Check. Right industry? Check. Interested? Check.
But then, the customer hits them with the dreaded, “I like your product, but I wish it had this feature.”
A mediocre salesperson will panic and ask himself, “What do I have to say to make this sale?” A good salesperson will instead ask, “What does this really mean? What pain does the customer wish my product could relieve?”
Put yourself in the customer’s shoes. They’re trying to envision exactly how your product will make them more successful on a day-to-day basis. When they ask about a missing feature, it means that in their mind, there’s a gap between what your product can do and what they need it to do—some burning issue they don’t think it can solve.
Ask the right questions
"By asking great questions, salespeople create great value in the eyes of their prospects."—Marc Wayshak, best-selling author and sales strategist
The feature request only gives you a superficial idea of what the customer wants your product to do. You need to dig beneath the surface by asking questions that uncover the real, pressing need behind this feature. That’s the best way to refocus the conversation on your product’s value.
No customer hears about a great product and thinks “Oh man, let me think of some random features I could tack onto this thing!” They think “Wow, sounds useful … but I don’t see how it could solve X for me. What if it did Y?” Asking questions is the only way to learn what they’re looking for.
You’re an expert on your product and your industry. Act like one. Ask how that feature would enhance the customer’s experience. Learn from your engineers, and consider questions like:
- Can you tell me exactly what problem that feature would solve for you?
- Who on your team would that help most?
- In the big picture, how would solving that problem help your company?
- Can any of our current workarounds do that for you?
- Is this a make or break issue? Why?
Asking these questions enables you to collaborate with the customer to uncover the issues your product can solve for them.
Not only that, but these questions establish trust. A sleazy salesperson would say anything to close a deal: “Oh, you know, that feature is actually coming out in a week, so why don’t you buy now?”
You, on the other hand, made an effort to learn about the customer's business and showed genuine interest in their success.
If you were sick, would you trust a doctor who pitched a medication before he asked about your symptoms? Nope. Customers won’t trust you if you do the same thing.
As with the pricing objection, adding on whatever feature they ask for sends the wrong message about your product. You think you’re being helpful, but really the customer is thinking, “Wow, do they change the product every time someone asks them to? Will this thing even look the same in two months?”
The way to really help the customer is by exploring creative new ways to solve their biggest issues. Listen closely to what they tell you, but then see how their feedback fits into the bigger picture to avoid feature creep.
It's unavoidable that people will request features you don't offer. At Close, we hear feature requests all the time. People want emoji support in our WYSIWYG email editor. They want icons for different kinds of tasks. They want automatic announcements for incoming and outgoing calls that calls are being recorded. And they've got good reasons for wanting these features.
But indiscriminately fulfilling their requests would lead to the monstrous kind of bloated sales software we always wanted to avoid. Product strategy means saying no.
Like Rob Hanna said about our app for salespeople:
"[Close] intuitively leads you to get the fuck out of the way of yourself so you can make more goddam calls effortlessly and efficiently – which means closing more sales in less time."
Rob knows what he's talking about. He's been selling and managing sales people since the 1970s. The first real CRM he used to manage his team was ACT!, as a global wholesaler for CHASE in NYC on their first billion dollar bond fund. He's used many other CRMs since then. Go ahead and read what else Rob has to say about our software.
Adding more features is easy. A lot of software vendors follow the "more features = better" philosophy and proudly display feature comparison charts on their homepage. But to create a product that really helps your users succeed, you need to think more deeply and uncover what the few things that truly matter are, and focus intensely on getting them right.
SaaS isn’t transactional
SaaS sales would be a lot easier if pricing and product features were all that mattered. But guess what? Then no one would need SaaS salespeople. If you get held up on these or other sales objections, you make yourself replaceable.
SaaS salespeople don’t get business by just listing off some features and naming a price—they do it by working together with customers to figure out how their product can help them succeed. When you become a source of value for customers, new business will come flowing in.
Download our free book today, SaaS Sales for Startup Founders.
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