How to sell if your user is not the buyer
writings.founderlabs.io
writings.founderlabs.io
Require me to give you my contact information just to download something. Have sales people blow up my phone and/or email and ignore polite brush-offs. Keep reaching out to me periodically with requests to have a meeting about how you product can help me.
I don't have buying power, but I do have bitching power and your product will wind up getting bad-mouthed by the whole team eventually. And when the engineer asks us for recommendations, guess what we tell him?
Lookin' at you, Veeam, AWS, and Keyence.
Also please don't make me sit through a demo just to get a quote. If I want a full demo I'll ask for it, and I need to know pricing first before even considering going any further. I've probably already researched your product, maybe even did a trial if available - I don't need to sit through any number of sales pitches, just give me the numbers.
I was surprised by how much the people who show up for demos seemed to like them and have good relationships with their reps. They thank us for saving them a lot of time they would have spent reading docs and marketing materials to learn the specific things that applied to them, or for us talking about roadmap stuff they don't get to see in the public materials.
Sometimes the price is a surprise to them and it needs a bit of context. Customers who are used to buying software this way seem to read between the lines really well and ask suitable questions about discounts or whatever, when they are surprised by pricing. Often we are able to make something work at a different price than the typical quote, or we can connect the dots so that the rationale is more clear, or the value requires some customization to be done.
My reps tell me this sorta thing is difficult over email, that nobody makes $10k+ purchases without talking to somebody, so if we can't get you on a call the deal falls over.
So I dunno. I'm not a big fan of the requirement for calls really, but I can understand why reps don't just throw quotes around without some conversation.
Most of my cases now (and I may be an outlier), I'm looking at something because I both have a need and someone I know recommended it or uses it so I'm already familiar, but at that point it's not so much a sales process and more so "I already know I want this, and I already have the budget and approval, let's get this buying process over with as quick as possible."
In my experience, non developer audiences like demos. Developers tend to like to try things out on their own, maybe with a little tech support.
Y'all're crazy if you think your API is so awesome that it needs to be a trade secret, and without it I can't get a good idea if you product is something that would actually solve our problems, or whether it seems like something worth integrating-with.
A major change in my field over the last few years is the rise of Ignition, a SCADA suite that's taking over everywhere. And sure, it's got simpler and cheaper licensing than it's rivals. But for our projects, licensing cost isn't generally a factor.
What Inductive Automation did was open up their documentation, offer good online training for free, have an endless demo mode that can be reset indefinitely, and a "maker" version that can be used for free. Oh, and it's scripted with Python instead of some janky BASIC knock-off. All features that appeal to integrators but that don't matter to the end users.
I don't think it's a coincidence.
Putting these walls up also makes life harder for actual customers, who now have to prove they are such every time they need to access said docs for whatever reason.
As an individual engineer, if I have to jump through hoops just to login and view docs... yeah. I won't be going out of my way to make sure you get considered in trade studies at my next job.
So they then lack any easy to see price overview or reasonable models for small dev teams or small companies. Demo's are not worth it for somebody going to spend a few hundreds, so you get often ignored.
What they then forgot that if you tie in a customer at the low end, that customer may grow and become a 10k customer down the line.
This is why companies need to get it in their stick skull, that you NEED fixed pricing for the folks that do not want personalized quotes (or the lovely no-response emails if asking for a quote as a single dev or "small" company).
And getting customers early on, even if they are not mass profit generators on their first purchase, are a good source of future money as people really do not change infrastructure or tooling without a good reason.
Seen a lot of good products, that we ignored because they lacked proper simplified pricing on their website. If its "contact us for pricing", its just like advertising "we do not want to deal with your poor ass" advertisement. So those customers go somewhere else, get a product they like and then grow. But then its too late / difficult as changing that customer to your product is 10x harder.
Miravete's work still looks interesting though, "Firms engage in foggy pricing when the menu of tariff options aims at profiting from consumer mistakes". I'm not sure the cell phone plan study really translates to this context, but maybe he has other more relevant work. Definitely interested in learning more about pricing.
Salespeople are the devil.
You should contact to people how they want to be contacted, not how you'd want to be contacted.
It's a difficult incentive design problem though.
Sometimes it could just be a rogue sales/marketing person. But other times it looks like it's probably blessed from the top, if not the startup-CEO personally setting the email marketing tool slider controls to maximum trashy level.
No, I'm the lead integrator at a small-to-medium-sized company. Which means when an engineer brings me in on a project, I have a decent amount of influence on the software and controls hardware we use.
The customer may specify a PLC manufacturer or a particular SCADA system, but unless we're expanding an existing system we usually have a lot of leeway. I know this stuff better than the engineer does (that's my job, after all), so my recommendations are usually accepted.
Requires a "professional account" just to register. And tend to refuse gmail accounts to create said microsoft professional account.
So the 30 day trial period you could use to check what's possible and see if you can integrate their shit with your IT infrastructure? Not happening. And if it's a bother just to get to try your shit, I can't fathom how bad the rest of the experience can be so you can keep your AI enhanced CRM, ERP, Dataverse etc.
In this case, corporate management holding the purse strings but their workers (devs) using the actual tools. The solution they offer to founders is to make the user your champion and have them sell your product for you.
"The meta point here is that you're not going to talk to the credit card holder; the user/dev is going to do that for you.
Give them the best possible chance at convincing the leadership. Make them look awesome for even bothering the leadership with a choice like this. Make it obviously awesome for them to decide “yes”. These users/devs are your sales people."
Maybe that works for dev tools with freemium models, but in many industries where this problem arises its just not possible to even get your product in front of the users. Take hospital systems and EHR purchasing where Doctors and Nurses are the users of the EHR day in and day out but it is the hospital administration that ultimately gets to decide which EHR is deployed. How do you get users to be champions of your product if you can't even get it in front of them?
The school district my kids are changes the parent app almost every year, its always a nightmare for everyone involved, I can't imagine what it is like to work IT in such a place.
Jetbrains threaded this needle for years by having professional licenses tied to an individual with clauses for time and location shifting. So you could use their software at home, drive to work and also use the same license there.
And they priced it at around the cost of three tech books per year, which it is at least that useful for productivity. I suspect we would be in better shape now if others had copied their model. Rather than the (defunct) Microsoft model of ignoring home piracy and demanding commercial licenses from any company large enough to make it economical to fire off a cease and desist to them and demand back pay.
We also get 40 hours a year that we can take off for skill development. It can be to learn something new or conferences.
It's a very, er, "enlightened self-interest" model, because it makes me "sticky" as a customer, since I'm less likely to learn a completely different IDE for work and then use that one for my own projects and eventually ditch theirs.
In our early days we had on occasion managed to directly convince non-developer decision makers in an organization to use our product (even though it wasn't an intentional strategy) and this invariably failed unless we also managed to get full buy-in from the developers who will actually use it.
These days we have an explicit rule that we don't go ahead with any customer engagement until we can see that a project's lead developer is fully sold on our product, otherwise we waste loads of time (which is essentially money) on ultimately fruitless retention attempts instead of using the time more productively on ideal customer opportunities.
Now it does depend on the nature of the product though. For a product used by only a small subset of a company (like our product), it's probably a bad strategy to sell to the execs instead of the users. But for a product like an ERP (think SAP, or Oracle ERP), these are deals worth USD millions (sometimes 10s of, or more) and convincing the execs is a highly (or possibly the only) effective strategy.
We made a "CEO Page" for this purpose:
But what about cases where the user isn't directly related to the decision maker? Doubly so when it's a hard to justify purchase? (I.e. you're not selling bread or IBM machines.)
For example, say, a keyless entry fob for a car. The driver benefits immensely. The CTO of Ford may probably not even entertain a meeting ("Huh, what does he think, locks are bad or something?! What's wrong with a secure lock?")
Does anyone have any suggestions for how to approach such a situation if you developed the fob and now want to sell it?
A great example is remote starters. Same idea. Great for the user, not so much for say Ford. The first places I saw these being installed? Stereo shops would use it as a cross selling feature whenever they were selling something else to a customer. I could be wrong, but it took a few years for the manufacturers to start including remote starters as an add-on. Before then, it was all kinds of other shops selling and installing them.
But its a trench warfare type of deal. You have to get into the hands of the people who can install them, then work your way up to approaching dealerships and larger clients.
I've done this with an anti-theft device. Start small, then build your client base and use that as a springboard to get interest from larger clients.
I.e. like you describe I the younger sales rep on the team am going bottom-up after the smallest guys. And my boss, the CEO is going after the top management. We're both selling the same thing but with different argumentation.
The idea is that the buzz of excitement will turn into consensus when everyone in the middle sees approval from the top and positive feedback from the bottom.
There’s a reason they all do it, and it’s because SSO is one of the few features enterprises are almost universally willing to pay for.
The company I work for is in the middle - anything where SSO is gated behind "Enterprise" is not even considered by us. We don't need 90% of the other "features" under the Enterprise plans, and most aren't willing to custom quote us for Basic+SSO.
Withhold it from free versions, sure - but definitely don't lock SSO only behind the most expensive option.
Maybe in 2015 it was an outlier, but SSO is now a non-negotiable and with many of these businesses on M365 business premium, which includes EntraID P2, SSO is now accessible to a large number of companies where it wasn't before. It's no longer some niche enterprise only functionality, it's a bare minimum for business SaaS.
And if you’re trying to negotiate custom, non standard licensing when you’ve only got 300 employees you will likely be a noisy customer in perpetuity.
No offense, that’s just how I’m betting 99% of folks read your response.
You can have user limits on the non-enterprise plans (Microsoft does this, for example, with Business Premium locked at 300 users or less), or gate other features behind enterprise: Have MFA across the board, but lock conditional access behind enterprise, lock more advanced audit logs & reporting behind enterprise, lock RBAC behind enterprise, or data residency, custom security policies, API limits, etc.
There are numerous other features that are non-negotiable for enterprises to help funnel them into the enterprise plan, while still being able to service medium companies with SSO.
> "Decouple your security features from your value-added services...If your SSO support is a 10% price hike, you’re not on this list. But these percentage increases are not maintenance costs, they’re revenue generation because you know your customers have no good options."
It is getting better with Entra P2 or Okta as it is couple of minutes to configure if you use good framework in your projects.
But the tax was because of what I wrote about in first place.
Some "green" IDP like O365 OIDC, Okta, Entra and such are usually included without extra cost (and will be self-service soon, too). Some "yellow" - usually SAML - IDPs come at a fixed fee. We know them, we know they are weird, but we can deal with it.
Other things are flagged as red and call in hourly billed projects and recurring maintenance fees. Like, one customer has an in-house developed SAML IDP written in PHP a decade ago or so. I want our customers to use SSO, but that's a level of jank I'm not supporting for free.
There's a number of ways for open source software stacks to make money, but I agree that finding features that companies with money will pay for is a great one.
I think Patio11 said it once, but SSO feels now like HTTPS felt in 2015. Used to be super expensive, but now should be "table stakes".
Other ways open source companies can make money:
- hosting (offers that sweet sweet recurring revenue)
- support (especially SLAs, which pair nicely with hosting)
- other enterprisey features, such as integrating with enterprisey tools (DataDog, SIEM tools)
- other auth features like fine grained authorization (RBAC, ABAC, PBAC) and provisioning (SCIM)
- control planes (I see this with tools like Cerbos and Permit which both offer fine grained authorization execution engines that are free, but charge for the control plane)
- certifications (SOC2, FIPS, HIPAA, PCI). this might not make sense in all cases, it does depend on the tool
- custom feature development (better if this is pulling forward planned development rather than something unplanned)
It's not easy, though.
I wrote more on my personal blog about freemium[0] and open-source[1] business models.
Also, anyone who's dealt with SAML knows it's like licking lead-based paint. It's the knowledge equivalent of antimatter, every line of code you write costing you a point of IQ.
SSO has to bring in monthly recurring revenue, to cover the monthly recurring disability payments to the many people who've lost the ability to feed and dress themselves after reading too much of the xml-dsig spec.
Coursera: $399 per u/y -> $49875 per year [7], 12400%
So, I check out the footnote:
[7] Coursera requires a minimum of 125 users to access SSO pricing. As they do not have an Enterprise price listed, this price just scales their lower cost tier up to 125 seats.
Dividing by 125 shows the SSO pricing is $399, so exactly the same as the non-SSO pricing. I fail to see how this is an SSO tax.
It might be that there is an SSO tax as the Enterprise price wasn't available to them, but listing it as 12400% increase seems like a deliberate attempt at deception.
I've used to work in small startup with ~10 people. The owner was always happy to pay for tools to developer productivity. We did not subscribe to Coursera, but in the theoretical case we'd all want to, the pricing would be:
10 users, no SSO: $3999/year
10 users, with SSO: $49875/year
It's an SSO tax, and a super hefty too. We'd probably balk at it and chose the less-secure option instead. And the fact that we'd get extra 116 licenses we had no need for is absolutely irrelevant, there is nothing we can do with it at all.
My point was that saying the minimum order is 125 seats for enterprise, and so claiming that the price for a single seat is increase by 12400% is being deceptive.
If you buy a six-pack of beer, you don't say "This is terrible! I only wanted one beer and this six-pack is a 500% increase in price!". If you only want one beer, you just buy the single beer and leave the six-pack on the shelf.
Imagine you _really_ wanted to try Foobar beer. So you get to beer distributor, and you find out that while each bottle is just $5, the minimum order is a crate of 144 bottles and they give no samples.
In this case, you might say: "Yeah, I really wanted to try that beer but there is no way I am paying $720 for that". It's exactly the same here.
(re 1147% vs 12400% - sure, maybe you could argue you should not look at a single license, but rather at a pack of 5 or 10 licenses... but this does not change numbers much for Coursera, it's still huge increase.)
Even if the original elastic company offers it cheaper, or better, that's a massive hill to climb. Corporations don't care about costs, they care about pieces of paper, or less charitably nice dinners with the sales team.
That by itself is worth the extra cost for some organizations. While I’m a big fan of AWS as a technology provider and have been heavily in the ecosystem for 8 years, I’m no fan of the company or the organization as a former employee.
It sounds like a trivial question to answer, but it just exposes the level of detachment that exists between who makes the purchase decisions and its users in SME context.
etc. There's a laundry list of features enterprises care about, better spelled out in the sibling post.
You really have to know who you are talking to and their motivations before you know what the right sales angle is.
One of them put in a bid to Cisco and got a reply back saying something like they were working on it but having some issues with the birds.
Your user is not your buyer, but they can be a distributed salesforce. You need to growth-hack not only for your penetration at the B2B level, but to give them the tools they need to growth-hack their own B2C client bases, with your product at the forefront.
That's a lot to build as a founding team, and occasionally it can be like herding cats - but it can be incredibly lucrative, because you have an incredibly low barrier to entry at the B2B level, but every account naturally scales with value delivered to the end customer.
Engineers immediately understand why matching messy company data is a nightmare, but executives just see delayed projects without grasping the technical complexity.
We're seeing more success lately with "your team burned N months on data matching that should've taken weeks" rather than explaining what entity resolution even is. We're talking to one company right now that's spent 10 years building their own entity resolution system and it still doesn't work well.
But even then, it depends on the company and what they're trying to do.
Now, we're working on more of an inbound strategy and have a bunch of ideas. We're debating on cold emailing, but as an engineer myself, I hate getting cold emails.
* How do I get promoted?
* How do I get a raise?
* How do I not get fired?
Beyond those common desires are a constellation of more personalized that is specific for each salesperson and the cohort they target (I'm somewhat of an idealist in that I believe people are quite often strongly driven by meaningful non-capitalist, non-realist desires).
In any case, when you're working in enterprise sales, what you have to realize is that, regardless of what the desire is, what your corporate champion is "buying" is a way for them to achieve their goals and only incidentally what is good for the company, where your product is merely a proxy to accomplishing this.
Of course, companies also know this and anyone who has owned a P&L immediately recognizes that the sum of all things everyone wants far exceeds the resources of the balance sheet, thus, some selection process needs to be put in place to allocate scarce resources.
Your corporate champion is ideally far more aligned with you against the company than they are with the company against you and your job is to figure out how to win this selection battle together.
The core insight though, is that people are actually astonishingly bad at performing on this and it's actually quite easy for an outside sales person to become a subject matter expert for 3 core reasons:
1. Any employee usually only ever has a sample size of 1 whereas you have a broader peek into how this has happened across a range of companies industry wide.
2. Any employee, only a minor part of their job involves interfacing with outside parts of the firm responsible for allocating resources whereas you treat this as a core competency.
3. For any person, it's always easier to advise a 3rd party on what to do than to practice the same actions yourself.
What this means though, is that, as an enterprise salesperson, you should understand that your core value comes from developing subject matter expertise in how to help people in your industry get promotions, get raises and avoid getting fired and the product you're representing at the moment is merely the avenue through which you enable that to happen.
The best salespeople I've ever met always share a common core value that they deeply care about making sure everyone around them is getting rich with the faith that some of that money eventually reflects onto them but that's not what drives them. That's why so many immigrants and children of immigrants make such great salespeople, they've seen the material difference wealth has made on their circumstances and they want to spread that opportunity to others.
This is what I advise Founders who start Enterprise focused businesses. Fundamentally, you should be thinking about how do I get someone to VP/Director/Line Manager/Tech Lead 2/3/5 years earlier than if my product doesn't exist and how do you breathe this passion day in day out.