You offered a massive cost-saving, and still lost the deal

You offered a massive cost-saving, and still lost the deal

In a recent conversation I had with one of the tech-entrepreneurs in my tribe, she mentioned a sales situation where her SaaS solution guaranteed a >€750.000 cost-saving, but it wasn’t enough to get the deal across the line. And although this might sound weird – it’s not strange.

It brings me to a fundamental question: What drives decisions in a sales process? And to understand that, we have to dig deeper.

We have to develop empathy for our buyers and get a solid understanding of what drives that person beyond the basics of ‘cost savings.’ It can very well be that the essence of their investment isn’t so much the cost, but very much the position of advantage they gain – personally or as a business. This, for example, is very common amongst innovators and early adoption.

Bain has developed a fantastic overview of the 40 values that play a role in B2B sales. Maslow’s hierarchy of needs inspires it. At the foundation of the pyramid, it positions table-stakes, and next is Functional value. It’s precisely those two layers where 99% of the B2B software vendors position their solution around, simply because it seems so obvious.

But it is not. The bulk of all decisions are led by the three layers that follow: Easy of doing business value, individual value, and inspirational value. So to set yourself apart in business software, it’s key to understand the true motivations behind the investment they are about to make.

I recall the time at Unit4 where we repositioned our flag-ship product – an ERP solution. Cost savings had always been the prime argument to ‘sell’ it. However, we learned that the fundamental reason that drove decisions wasn’t related to cost savings at all. Our prime differentiator was the solution’s flexibility, enabling customers to make adjustments in-house without the typical dependence on external consultants. We had calculated together with IDC that, on average, a mid-sized company would save around $258.000 per year (compared to vendors like SAP, Oracle, and Microsoft Dynamics). A significant amount, you’d say.

Still – it wasn’t about that. In fact: For the bulk of our customers, it was a drip on a hot plate. What they saw wasn’t the cost-savings – but strategic value. Exactly this capability enabled them to use change as their weapon to become the best in their league.

  • It would help them to gain a speed and responsiveness advantage in execution.
  • It would allow them to guarantee stability in times of chaos and eliminate operational disruption.
  • It had a clear reputational value.
  • And it became a core instrument to accelerate vision.

Understanding this is key to accelerate the sales process. Doing this well will give you a position where your ideal customers won’t object to paying a premium. Instead, they’ll perceive your offer as a no-brainer. That starts by building your value foundation.