Startup sales objections: Selling against the incumbent
"Your software really looks like the best solution, but we will go with Salesforce, simply because they're the standard in this field. We know their software can scale and grow with our company, it integrates with everything we need."
This is one of the many common sales objections we get when selling our sales CRM, and I know that many SaaS startups have their own version of this.
"Your product is better, but we'll go with ____ (biggest name in your industry)."
There are a couple of common reasons why people choose the industry incumbent:
- Everybody uses it, thus, it must be good/secure/have good service/be reliable.
- They're a big company, so they'll be around forever.
- Once our company grows, we'll need an enterprise class solution.
- Everybody in my company knows BigCompany, so I won't get demoted for choosing them if there's ever a problem.
As a new player in your market, how do you deal with this objection?
There are two sides to this objection:
- The irrational: People making decisions based on fear of making mistakes. You must manage the emotional and irrational side of the objection in a irrational way (we shared a process for doing that in our post How to sell to nonbelievers).
- The rational: You tell them about the pros and cons of both choices, and you give them a new choice that they didn't think of before and that's not an either/or decision.
Here's an example of how we do this when selling Close.
1. State the benefit of the big company
Prospect: "Yes, Close is the better solution, but we'll go with Salesforce because it's safer as we grow in the long-term."
Steli: "I understand that. In the long-term, as your company grows to thousands of employees, you'll want a software that can operate reliably in a Fortune 500 environment, and integrate with all your other software vendors. In the long-term, Salesforce will speed you up and be able to adapt to your growing demands, right?"
2. State the disadvantage of the big company
Steli: "The flipside of that is, in the short-term, it will slow you down significantly, because it's just not a good fit for a company like yours at the current stage. It's clunky and complicated, and just not designed for the small and agile environment of a fast growing company like yours. And I think you realize that, because you said it yourself, Close actually has a better product for you right now, right?"
Prospect: "Yes, but we have to think long-term."
3. State the benefit of your product
Steli: "Exactly. Close would be better for you in the short-term. We'd speed you up right now. You're going to close more deals, make more sales, reward your team faster. Your sales reps will be happy to use a sales CRM that does the work for them, instead of having to waste their time on manual data entry, and all the other headaches that come with Salesforce.
And the fact that we don't have as many customers as Salesforce is actually good for you because you'll get better care and attention from our team than you could get from a huge company where you're just another number in their customer database. But you don't want to sacrifice your long-term growth for short term gains, right?"
Prospect: "Yes, that's the point."
4. Challenge their thinking
Steli: "Good, that's smart. What if this isn't an either/or choice, though? What if you can have the best of both worlds? Speed up growth right now and move faster in the short-term, while also being able to scale big once you're hiring hundreds of new employees?"
Prospect: "Of course that would be good, but I don't see how."
5. Show them how to get the best of both worlds
Steli: "Neither did we, but one of our customers came up with a solution for this. And we've introduced this solution to several of our biggest customers, who are now operating this way. They chose Close because they want the speed, the ease of use, the accelerated growth now and as they grow and succeed big, they buy Salesforce too ... even before they need it. And then they use Salesforce as an invisible back-end reporting engine, while using Close as the front-end their salespeople interact with."
6. Preempt and manage objections
Steli: "Even though they're paying for both solutions now, the productivity gains for them by far outweigh the costs of operating this way."
Prospect: "I see. But doesn't it double the workload to run two systems in parallel?"
Steli: "It would, but not with our API. You basically pump all the data from Close into Salesforce automatically."
Prospect: "That makes a lot of sense. I didn't think of this before but it would be awesome to have the best of both worlds!"
Apply this to your sales process
See how this works? How could you apply the same approach to your own SaaS startup?
You're not arguing with them about the point they are making.
You're not promising them you'll soon be able to do everything the big incumbent can do.
Instead, you acknowledge that they have a valid point, and show them that you understand their concerns and objectives.
And then you tell them how other customers solved this problem, and how it applies to them. You're creating value, rather than just communicating value, which is what startup sales is really about. You're showing them a better way of doing business by utilizing your solution. Everybody wins.