Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about reasons people won’t buy your product and how to fix it. They discuss common objections people have about products and why it prevents them from making a purchase.
Items mentioned in this episode:
Transcript
Mike [00:01]: In this episode of Startups for the Rest of Us, Rob and I will be talking about reasons why people won’t buy your product and how to fix them. This is Starters for the Rest of Us, episode 246.
Welcome to Startups for the Rest of Us, the podcast for developers, designers, entrepreneurs in all software products, whether you’ve built your first product or your just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. How you doing this week, Rob?
Rob [00:30] I’m doing pretty good. I’m ramping up for a bunch of webinars. I’m doing a webinar with lead pages this week following up on the contest that I did a few weeks ago giving away some lead pages for Drip, and then we’re ramping up a couple Drip webinars. There’s an educational one, one that’s further down the funnel for people who are already using Drip or more curious about how it actually works. So, this is the fun part, this is where as creative people we get to kind of dive into outlines of things and figuring out what we’re going to say. It’s kind of like writing a talk but it’s a lot shorter and you’re going to be doing it online. So, it’s also fun to look at the whole funnel and figure out where we need a little few emails here and a few mini courses here and how to integrate Drip with whatever we’re going to use for the webinars and all this stuff. So, it’s exciting. I like launching new experiments like this.
Mike [01:21]: The best thing about doing those kinds of things is that you don’t have to get it right on the first time because it’s not like a talk where you go out there and you give the talk and essentially it’s over with. You might or might not be able to reuse it, but like with a webinar you tend to do those repeatedly so you can errate on them over time and find out more information about what worked and what didn’t. And that’s what I really liked about those things, it’s just the re-usability of it and the fact that it doesn’t need to be perfect the first time and even if you completely screw it up you can always try it again the next week.
Rob [01:51]: Yep, I totally agree. And the webinars I’ve done so far have been kind of third party things, drip hasn’t put on our own webinars yet, but I’ve still had a really god time just interacting with the people on the calls, and the questions that come out of it are intelligent and challenging. So, it’s been fun. It’s kind of like you know when we go to MicroConf, when you speak at a conference it’s always kind of exhilarating to do it. You get a little nervous, you deliver and then you have a Q&A part and then it just winds up being fun in the end and that’s kind of how webinars have been for me so far.
Mike [02:23]: Very cool. Well, I’ve been trying to adjust to the kids’ schedule while they’ve been home for the summer and it’s proven to be bit of a challenge because my wife, she owns her own fitness studio so she does some personal training, she also does group exercise classes. And because the kids are home for the summer and there are certain weeks where they are at different activities, whether it’s art camp or karate camp, some of those things are all day affairs and some of them are not. So, sometimes they’re home for half a day, sometimes they’re home the entire day, and going back and forth between my wife and I trying to figure out, “Okay, who’s watching the kids, who’s going to be able to do work?” We actually kind of broke down. Earlier today we had somebody come over and watch the kids for a little while. There’s another family who lives in the area and we hired somebody to come watch, not only our kids but their kids at the same time because their parents, they both work from home sometimes. So when the kids are both home- and they’ve got three kids, so when the kids are home you’re just not getting nearly as much work done. So, hopefully that issue will resolve itself sooner rather than later.
Rob [03:25]: Yeah, I never try to work with the kids at home. That’s catastrophic. I get too frustrated, and I guess I should say I never try to work with the kids at home when I’m watching them. Like, we have a nanny essentially that watches the kids a couple hours a day and also picks them up from camp. Because my five year old is in a camp that ends at noon every day and so she picks them up and watches them for a few hours and then picks her son up at four and it allows me to have a full workday. So that’s a no-brainer man, I think you made the right choice. I think if you’re listening to this and you find yourself in this situation, go back and listen to “Zenfounder”, episode 1, because Sharon and I delved into this. We talk about our Sunday huddle approach, how we hire people to kind of drive our kids around. It’s essentially a nanny, but part time is not necessarily the best quality time, so try not to drive all over town picking kids up. Rather we try to spend time when we can with them in the afternoons and evenings. So, what are we talking about today?
Mike [04:20]: Well, today’s topic comes from Niles. I met Niles over at MicroConf Europe last year and he says, “Hi guys, I just came across this post and thought it would make s great topic for the show.” And I run over and read the post and it was over on inbound.org and it was a post called “Nine Reasons I won’t Buy Your SaaS Tool”. And I read through the article, it was interesting but I also felt like it came from the perspective of somebody who doesn’t make the decisions about it based as if they were the business owner; it was more like personalized objections to it than anything else. I just felt like there was a different take that we take on this article and use it to come up with our own ideas about what sorts of objections people have about different products and why they wouldn’t come through and actually do a purchase. Whether it’s just going from a trial to actually purchasing it as a SaaS product or just if you have a book or something like that and if you’re selling it and it’s a one-time purchase, just buying that whether it’s downloadable software or book, etc. But I think that there’s a lot of different objections that people have and what I wanted to do was go through a list of what those objections are and then kind of highlight how you would go about overcoming some of those different objections.
So, to kick us off, the first reason why a prospect wouldn’t buy a product is that they don’t understand what it is that you’re offering. So, in this case they come to your website and they are looking at your product offering and they don’t really understand what it does or how it works or what it does for them. And sometimes this is just a problem with the marketing messaging itself. If you’re not really clear about what the value is that they get out of it. If you’re talking more about the features and the functionality than what it is that they get out of it, the results they’re going to get, those are places where they’re not going to understand what it is that you’re offering and what the benefits that they’re going to get from it.
Rob [06:02]: It’s easy to err on two sides of this coin and go too far to an extreme, and if you go too much into the features too quickly then people don’t understand the real value their getting out of it; and if you go too much into the value their going to get out of it and the benefits then it can actually be hard to figure out what your tool actually does. So, imagine if we had a social media tool like Hootsuite: right on the home page you could say these are the features it has and just start listing them down and people are going to have a tough time absorbing all that information without some type of context. So, that’s a mistake. Or if you went to the other side and you could say, “It makes social media effortless”, or, “It makes all you social media interactions like a dream or something. And you’re almost like too high level at that point. It’s like, what does that even really mean? And unless you dig down quick on that page and start explaining how it does that then look at a few features. I believe you need a nice balance of those things. You can’t just go after benefits, benefits, benefits because it’s just as easy to lose someone going that direction as it is to lose someone by getting out into the weeds of features too quickly.
Mike [07:15]: So, in your mind, what is a good mix between those two things? Is it 50/50, is it 70/30? Are there any sorts of rules of thumb that you can come up with that kind of guide you in terms of the number of benefits or the amount of benefits you should talk about versus the feature?
Rob [07:20]: Yeah, the rule that I use, or kind of my loose rule of thumb, is that the headline should be, I want it to be a promise rather than a description of the product. Sometimes you can put a description and it works. Drip, I do that with, right. It says, “Light weight marketing automation that doesn’t suck”. Now, that’s not a promise; that’s actually a description of the tool. That’s typically not the way I would go. There are some reasons that I’ve done that. But if you go to the homepage of HitTail the headline is a promise. It says, “Guaranteed to increase your organic search traffic”. Okay, so that right there is a benefit; it’s not a feature. So, I start with that so I typically would want some text digging down into that, of how it does that. So, it’s still benefits. You’re not talking about features yet, but you’re now talking about more specific. Like with HitTail’s example we unearth the keywords that you should be targeting but aren’t. Then I like to start digging into a couple of features and those are typically in some bullet points or in short snippets and on the homepage I believe that having maybe three features kind of digging into those, three to six features, is not a bad way to go once you’ve made kind of that nice promise at the top. Especially if you have- I typically have some testimonials above that before I dig into features, and I also like to have some prominent press links above that of folks who’ve written articles of that. So, I wouldn’t say I have mixed, like you say 50/50, but that’s how I think about a page in terms of first make a promise, then talk a little bit about how it’s going to do it and always keeping in mind that you’re trying to use “you” language, like “you, you” the prospect rather that “me, me”, the person who’s selling something and then slowly digging into more and more details. So, it’s that inverted pyramid idea of starting fairly broad and then working down into the features. Now that’s a homepage or a landing page. Obviously I think you should then have a full features page that digs into the nitty gritty of what your tool does, because that’s where you can go off in the weeds and if you don’t have a features page people can have the question, really basic question of like, “So then what does your tool actually do and how does it do it?” And I think that’s a benefit of having that features page that the people can dig into it if they have more questions.
Mike [09:24]: The second reason people won’t buy your product is that they’ll look at the website that you have and say I don’t have that problem. And this really just a fundamental problem with the traffic sources that you have. So, whether you’re targeting the wrong people in AdWords or whatever paid advertising you’re doing or if you’re advertising for your product using the wrong social media or the wrong blog articles, any sorts of news outlets where it’s just not applicable or if you are trying to get from like Digg or Reddit and it’s just not the right audience. There’s lots of different ways to get a lot of traffic to your website but just because you get traffic doesn’t mean that it’s targeted traffic and you have to get that targeted traffic because if the traffic is not targeted they’re probably not going to have that problem and they are going to have absolutely no reason to stick around or buy your product.
Rob [10:12]: Yeah, targeting traffic is hard especially if you’re sending a bunch of stuff to your homepage. I think the less traffic you send to your homepage the better and the more traffic you send to individual landing pages that essentially look like you home page but that you’ve changed the headline to really resonate with the traffic source that’s hitting it, but you can’t always do that, but certainly if you are running paid acquisition, if you’re doing SEO, you can set up separate pages that target certain keywords. There’s a lot of ways to do this, and what’s interesting is your tool probably solves a bunch of different problems, but you can’t say that in a headline. And if you say the wrong one to the wrong audience then they will wonder off and have this objection of, “I don’t have that problem.” And so, the more specific you can get with your headline and you can say, “Boom, do you have this problem? Do you spend way too many hours managing your social media? Or do you no have enough organic search traffic?” Very specific thing that’s targeted to those people, you’re just going to stand a better chance of them continue to read the page which eventually often leads to them converting for you.
Mike [11:16]: And I think you can have this problem on any given page on your website. As you kind of indicated, the homepage is not often the best page to be converting people into trials or customers because it’s too generic, you don’t know the type of person who is going there. They may have just heard about your tool from somebody else or just typed it into a search engine or something along those lines. But if they come to a specific page, especially if you’ve optimized that page using SEO you can generally get a good idea of what type of person is coming to that page. So, obviously there’s bit of a difference if you’re using paid advertising because then you can have a little bit more fine-grained control over it versus if somebody writes an article about your website or your application, you don’t always have as much fine-grained control over what it is that they say or how they pitch it to their audience or how they talk about your product. But if you find that those links are coming back to your site you can certainly morph your pages to talk directly to that audience especially if you’re seeing that there’s a lot of traffic coming from some of those different sources.
Rob [12:15]: A third reason why people might not buy your product is that they don’t trust you. I think there’s a number of ways that someone could mistrust you. They could look at the site and think that it’s just a little too slimy or that it’s a little too, it looks like a scam, right. And I think that comes to a design problem. Your language could be over-sales-y, you could be pushing too hard and it could feel like you’re trying too hard and that could be a copy-writing problem. I think aside from those, a big one is that someone might not trust that you can deliver on the promises you’re making on that homepage or on that landing page. And probably the best way I know of to get around that is to use, essentially lead nurturing right. Instead of getting someone to sign right up, because they may not trust that you’re going to deliver or it may take too long to get set up or whatever they’re not believing that you’re saying, but you offer something very small in exchange for an email address. And so you can do an email mini-course educating them on how you’re going to solve their problem or how they could solve it by themselves on their own without buying your software. Or you can give them a tools list or PDF or why paper or something. And then once you have their email address you can email them a small min-course once a week and build that trust up.. Build up the knowledge to them that you’re an expert and that you can solve this problem and that you have done it. You can send them case studies, you can send them your credentials, quotes and testimonials, all that kind of stuff. I mean you just have so much more time to do that if you have the email address than if you try to pitch everything on a webpage while someone is skimming through that between their lunch hour and their one o’clock meeting.
Mike [13:50]: I think in addition to some of the things that you talked about, the lead nurturing thing I think historically has been overly simplified. I think in the past if you looked even five years ago or so, if you looked at the basic sales fall for any given product on the internet it was somebody comes to your website, they sign up for a trial and then they purchase the product or they don’t. The overly simplified piece of it was that lead nurturing that you talked about where they come to your website and you just met them. They don’t know anything about you yet, yet you’re trying to sell them on a product and they just don’t have that trust yet. And I think that’s- you talked about it pretty in depth- but I think that that’s the piece that a lot of people miss when they are trying to set up their website. They’re skipping over that piece and they’re not thinking about what it is that I can offer people that will help establish that trust before we even get to the point where I’m asking them to sign up for a trial. And like I said, that’s just something that I think people have kind of glossed over. I’d say it happens a lot less now than it did three or four years ago, but it’s starting to come to the forefront, like this is an important piece. And I think a hard part about that is just the length of time that it takes to go from, “This is a new lead and I’m nurturing that lead”, but it’s hard to tell how long that lead nurturing is going to take. Sometimes it can take days, sometimes it can take six months and sometimes it can take a year. And that nebulous piece of it, the time frame for that, is what makes it so difficult for people.
Rob [15:12]: Our fourth reason of why people won’t buy your product is that they are happy enough with what they currently have. And this is a tough one to get around. I think it’s pretty common that there’s going to be an incumbent in pretty much every market that you enter into, and frankly most people don’t enjoy change, and they are not going to go out of their way even if they can get some type of incremental benefit, they’re not going to go out of their way to switch to your product. And you know, Mike, as you noted here in the outline, the biggest competitor to most bug tracing software is probably spreadsheets, it’s probably some hacked together thing that people have done and if it works well enough then why would someone change? And so to think about getting around that objection you really have to show not just incremental value but you have to show dramatic savings of time, dramatic savings of money or how you can make someone a lot more money or how you can really remove the pain from their life and I think that’s a big thing. We talked about this B to B pain thing, right? You really have to figure out what that pain is, and you have to go after it, and you have truly understand what the pain is, why they’re feeling it and you have to talk about that on your homepage and in your marketing and in your copy. And if you’re kind of vague around that and you feel like you’re kind of solving a problem for a certain group of people that’s not good enough. You have to be a lot more specific about it or you have maximize folk trying out your app or becoming customers of you, you really need to understand that pain.
Mike [16:41] And number four is closely related to number five which is that it’s too hard to switch from what I’m doing today. And if what they’re doing today currently is just they are trying to sign up for a bug tracking software and all they are using is spreadsheets, one of the ways to overcome that is having a mechanism to load that spreadsheet into the software. There’s technical ways to do this particular piece of it ,and you can say, “Okay, I’m going to build an import mechanism for all of my competitors and allow then to upload a spreadsheet that will import stuff.” But you’re still asking them to do work in some way, shape or form. They have to figure out what that export process is, they have to make sure the data is formatted properly, and then imported into your system.
The other way to go about this is to offer some sort of a concierge on-boarding service where you offer to, either for free or as a paid service, import the data in some way, shape or form. And I distinctly remember Patrick McKenzie talking about this for appointment reminder where he offered a free data import regardless of what type of system you were currently using. And some people would send him spreadsheets, some people would send him PDF files, and he would just take that data and import it into an appointment reminder. And sometimes he literally had to sit there and copy paste things, sometimes he had to type things in, but at the end of the day what he was doing, he was removing the pain of switching from whatever their current system was to using his software. And I think that that pain of switching is very underrated. I mean, most people heavily discount on how much effort and mental overhead there is to getting rid of that because signing up for a new service is basically asking somebody to do work, and that’s not what they signed up for. They signed up to get rid of some of the work that they have to do and some of the pain points that they have. By forcing them to do this stuff manually, it is just a barrier for them to sign up for your service. So, if you can remove that barrier in any way, shape, or form then it’s going to get you to do it. My wife’s evaluating some different options right now because she has one, and the problem that she has is, “Oh, I’m going to have to take all my existing appointments and everything else and I’m going to have to move them into this new software and I don’t want to have to do that.” So, it’s definitely a real thing that people have to deal with and they do take it into consideration.
Rob [18:53] Yeah, in launching Drip, Derek and I sat down and said, “What are people biggest switching cost and how can we get around those?” and concierge service is one way, doing it for them. Building importers is another way. Even helping prepare people, like creating internal marketing docs. Let’s say it’s a doc that allows a developer to sell the product to convince his boss that they should be able to use this. Something your future customer can use to convince their higher ups, I’m getting all of these things work and I’ve seen them all done but to sit down and really give thought how is it to switch, why is it harder to switch and what is in our power to offer folks to try to eliminate that switching cost, and it’s very powerful.
Mike [19:37]: Yeah, which you’ve kind of alluded to and I’ve seen this done in the enterprise world where they have these kind of marketing documents where they will talk about what sort of problems are that people are facing and how to overcome those challenges with a new piece of software. Some of those things are as you said, you do it for them and you can talk about those things, but giving them the tools that they need to be able to justify internally because they’re going to ask the question “how do we going to go about switching and what are the pain points going to be of switching?” and if you can provide them that information and give some ammunition and be able to say, “Hey, let’s take this tool that isn’t doing the job for us and get rid of It and this is exactly how we are going to switch over, this is our road map to moving over into this new system.” If you can get that, and sometimes it takes standing up for your competitors, but at the end of the day sometimes you have to do what you have to do.
Rob [20:22]: Our sixth reason why people won’t buy your product is if they can’t figure out how to use it. And this is a pretty common one, right? Someone downloads a trial or they sign up for a trial and they can’t figure out how to enter stuff or they don’t know what they should do or they just kind of give up. And that typically means your product is too complicated or your on-boarding isn’t good enough. If it’s on-boarding that’s a fixable thing, there’s kind of a formula for this right. You’re going to want to send folks some emails on how to get on boarded, preferably very timely and spell out things they’ve already done and what they have left to do and obviously having some kind of walk through or some kind of setup within the app as well. If an app is just too complicated and software isn’t the answer, then you may need high-touch sales to explain it. If you’ve solved a complicate problem, you’ve built a complex solution, and you’re selling in to folks where the price point is worthwhile then people aren’t going to on-board to something like that when it’s really hard to get set up. And that’s why Enterprise Tools sells for so much money right. They sell for a $100,000 or a million dollars often because there’s so much effort, I mean there’s so much effort involved in building, there are so much sales effort involved in getting people on-board and it’s such a lag. And so I kind of think of it as one of those two things, either your product is too complicated in which case you need to up your game and go high-touch or you’re just not on–boarding well enough and you need to look at that.
Mike [21:44]: Yeah, I think what the misconception with some of the Enterprise level products is that people look at the price and say, “Oh, that product is so not worth that.” And in most case they’re right, the software isn’t worth that. It shouldn’t take that much effort to build the software, but what you’re paying for isn’t the software; you’re paying for the sales effort that is required to get in front of the customers and do the work to get them set up. That’s definitely something that heavily factors into the price in there. But, if software becomes shelf ware then it’s not providing any value, so you definitely need to figure out how it is you’re going to demonstrate that value. Because if it’s a SaaS product for example and people are signing up for a trial, if they can’t figure out how to use it and they are not getting the value out of it, they’re definitely not going to pay for it. You have to go through and figure out what those pain points are for them and why it is that they’re not able to use the software. And maybe it is too complicated, maybe you need to switch it to much more of a service-based offering rather than a software offerings. Sometimes that’s the answer. But at the end of the day as the entrepreneur your job is to figure those things out, it’s not to build a certain type of product or a certain type of company. It’s to figure out what those types of problems are and then fix them with the business.
Rob [22:52]: And that’s where the old-school, big ticket price, enterprise sales had an advantage because they didn’t have subscribers and when you’re providing a subscription service you have to deliver to the customer every month or they will cancel. And so if they are not using they are going to cancel. Whereas if you were Oracle or Ceeble or People Soft back in the day or even today I suppose, you can sell a six-figure or a seven-figure deal and all the effort is upfront convincing them to buy it and you don’t have to follow through and actually provide that much value. Obviously that sucks, I mean but I’ve seen it happen. I’ve been at large enterprises where there’s been this great sales job and then folks don’t follow through but the value is kind of provided all upfront and so was most of the money, aside from kind of the annual maintenance twenty percent that is typical.
Mike [23:40]: The seventh reason why somebody might not buy your product is that they forgot about you. They came to your website, they looked around a little bit then somebody walked into their office, and they got busy and they closed down their laptop and walked away or closed their browser and went to do other work that came up and they just didn’t sign up for anything, they didn’t download anything. So, by the time they get back to their desk and they decide they have a free minute, at that point they’ve forgotten what it is that they came to your website for to begin with. So, in cases like that you need to use something like re-targeting to help bring them back. If you were lucky enough to get their email address because they did sign up for something then you need to actually go through the process of actually emailing them on a regular basis. And I’ve done this in the past where I’ve collected email addresses and then just not emailed people for like two or three months and that’s the worst thing you can possibly do because they were interested at one point but two or three months down the road, unless you are getting in front of them and talking to them chances are good they either forgot about you or the problem was just not high enough on their list of priorities to come back to you, or they found something else to solve the problem and you weren’t it because you weren’t talking to them. So, making sure that you’re going back and getting in front of those people and getting either a yes or a no is, that’s essentially you job. It’s not your job to kind of self-select and say, “Oh, this person didn’t email us or sign up for a trial so I’m not going to bother them anymore,” and that’s absolutely wrong, that’s the wrong approach to take. You need to get through to them and you need to talk to them until they either say yes or go away.
The eighth reason why somebody might not buy your product is that they’ve tried similar things before, and those things didn’t work for them. And I’ve done this myself where I’ve signed up for a product and it didn’t work out and then I maybe signed up for one more and that didn’t work out, and suddenly I just give up on the whole genre of that particular type of product. You might have found this with something like Time Tracking or To Do lists. People switch to those types of applications on a fairly regular basis, and at some point I think people just get frustrated and they decide, “Look, none of these products work so, none of these products I’ve tried so far work so none of them are going to work.” And this isn’t necessarily true, especially if you’re taking a different approach to a particular problem. And if you’re taking a different approach than other people and other competitors in your space, what you need to do is educate people about why your approach is different. Maybe the competitors you’re looking at are doing it wrong. Maybe they’re not telling the story about how they went and decided to create this product because they were having that particular problem and nobody else was solving it for them and show people that the process needs to be molded to fit into this software. And sometimes that’s just the case, the vendors will create a product based on their own internal ideas of how a particular process should work and it’ll educate their customers as they’ll come on board about how they can modify their own internal processes tobe more efficient and to get more things done and then when the customer’s trying out the software, because there’s a mismatch between what the customer’s process is and what the vendor’s process is, those things don’t mix so they don’t work and eventually the customers get frustrated and they say, “Look, I’m done with this,” and they do the same thing with the next product, and the next product and the next product and eventually they kind of just check out of the whole thing. You can use education marketing to help correct this, but sometimes there’s also a problem with the problem solution fit. Maybe you’re not solving the right problem. Maybe the customers have a slightly different problem, and that takes customer development and you have to talk to people who’ve signed up, people who just cancelled and verify that you actually do have that problem solution fit. Because sometimes your promises don’t match what the customer expectations are and you need to know that earlier and sooner rather than later.
Rob [27:22]: I tend to think about this in two ways: if you’re in kind of a new space or a new market then the odds of them, of your customers having tried so many things that their tired of it are pretty low. And so I wouldn’t typically use this as a factor unless you’re hearing this from people who are canceling. My guess is you won’t be. But if you’re in a mature market where there are a lot of tools, or it’s been around for ten, fifteen, twenty years, then there probably are going to be some older tools, some incumbents that are higher priced, that’s real hard to use, that are cumbersome, it’s kind of the same story we see with QuickBooks or Quicken and accounting space and the big marketing automation tools or email marketing software. I mean you really see as tools get older they just get cumbersome. In that case it’s probably a good bet that people have in fact tried other tools and really don’t like them. We’ve used this term of “refugee” from Exproduct, Infusionsoft Refugee or Quickbooks refugee. It’s someone who is trying to flee that product that product because they don’t like it so much that they’re willing to use kind of anything else. And in that case that’s actually a really interesting marketing angle. It’s a really interesting copy-writing angle. It’s an interesting touch point that you can use in an email course, in a headline, in a sales letter, on a homepage, to basically call it out, just, “Have you tries a bunch of different products and they haven’t worked for you? Are you tired of this incumbent software that’s really expensive and hasn’t worked for you?” And you just tackle it head-on and then you present why your software isn’t that and how you’re kind of of a new paradigm.
Mike [28:54]: And the ninth reason why somebody might not buy you product is that they look at it and they say it’s too expensive. And in these cases, I think that if somebody looks at the product and says that it’s too expensive it tends to be an objection but it’s coming from some other place. Either they’re not seeing the value in it or there are features that they’re specifically looking for that are in a pricing tier that they’re not comfortable paying for that pricing tier because maybe it’s a one person sho pand the specific feature that they want is in a $100 tier versus the $20 tier. There’s a lot of different reasons why they may not be able to see the value. They also may not even believe that the value is there. And that might be an education problem, but it’s rarely the case that you’re offering the product and somebody looks at it and says out of hand that that’s too expensive. My guess is that there’s something else at play. It’s not necessarily that it’s too expensive, it’s more that they don’t see the value or they’re not looking at the right things and it’s up to you to kind of correct what it is that they’re looking it or educate them. I just don’t think that in most cases, unless your product is completely outrageously priced in comparison to all the competitors out there, it’s hard to overprice something if you’re not also delivering the value.
Rob [30:05]: Yeah, you’re always going to have some pricing objections to what you billed. I don’t think I’ve ever had a product priced even as low as you can possibly go and still not have someone tell you that it’s overpriced. But the point at which you might actually think you might be overpriced is when fifty percent of your people are canceling because of that. You really have to hear it a lot in order to actually start thinking about lowering prices in my opinion.
The other thing is, I talked about this last MicroConf, and it was in reference to Drip and it was in reference when we first launched, we had a bunch of people using it and cancellations were coming through and a number of people said very similar things. They said, “this is a great tool, I love the usability, it’s easy to use but I just couldn’t justify it in light of the price,” and they would say that, it was very similarly, it was too expensive for what it does, that kind of stuff. Now, you could look at that one way and say, “Wow, that’s too expensive. We need to lower our prices.” Derek and I looked at it another way. I wanted to go after something called aspirational pricing, which is basically saying, “I don’t want to charge less that $50 a month.” It was at the $49 a month price range, so how can we build enough value in the product that we are worth $49 a month? And these days that’s more how I think about rather that trying to lower prices to meet expectations, how can you build enough that their expectations are met at or above your current price point?
Mike [31:26]: Yeah, I think that exact topic came up in one of my mastermind group discussions which was, don’t drop the price, add value to it. And I think that you can probably generically apply that advice across the board to virtually any product on the market. Don’t discount the price, always add value.
Rob [31:43]: So, to recap our nine reasons why people won’t buy you product. Number one, they don’t understand what you offering. Number two, they don’t have that problem. Number three, they don’t trust you. Number four, they’re happy enough with what they currently are using. Number five, it’s too hard to switch from what they’re using today. Number six, they couldn’t figure out how to use your product. Number seven, they forgot about you. Number eight, they’ve tried similar things before and they didn’t work and number nine, you’re just too expensive.
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This was a great episode and very timely as I am about to launch my first SaaS product.
I like #3… this is largely being addressed in the US and the western world where companies are realizing they need to speak directly to consumers, keep headlines simple, and connect authentically. However, it’s not happening in the east… even in China for the most part. My bank in Hong Kong is a giant mess of a website. The opportunity to market to the emerging world with authenticity is wide open.