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You're not losing to competitors. You're losing to indecision, most often heard like this: "Sorry, it's not the right time. Let's reconnect".
And it's no surprise, layoffs, budget cuts and more has led to a fear of messing up. We discuss three ways to overcome indecision.
Sources:
And it's no surprise, layoffs, budget cuts and more has led to a fear of messing up. We discuss three ways to overcome indecision.
- (00:00) - Introduction
- (04:26) - Sales Challenges and Indecision
- (05:58) - Economic Impact on SaaS
- (12:34) - So what can you do? Start small.
- (16:22) - But won't my ACV take a hit?
- (17:40) - Try Before You Buy: The Power of POCs
- (19:54) - The Role of Technical Validation
- (24:19) - Building Trust with Flexible Contracts
Sources:
***
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Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
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[00:00:00] Toni: Hey everyone, this is Toni Hohlbein from Growblocks. You are listening to the Revenue Formula with Mikkel and Toni. In today's episode, we share three ways to overcome indecisions in the sales process. enjoy.
[00:00:20] Toni: Mikkel, tell me about your weekend.
[00:00:22] Mikkel: weekend. I think I did burn the intro but you know what I was thinking this morning because I've gotten to the point now where have you tried you driving the car with your kids and everyone is like buckled up can't you can't move you can't do anything you can't help them you're driving the car and one of them is just screaming uncontrollably and there's nothing you can't you can't do anything about it it's you you just can't Sit there and take it.
[00:00:52] Toni: Yeah, yeah. Keep driving. So you check shortly, briefly, like, is it strangling itself? Yeah. No.
[00:00:58] Mikkel: and you're like, are you, are you okay? And still screaming like, okay, no, I'll, I'll help you when we stop, I guess. No, it was like, so
[00:01:06] she threw a tantrum She has stall tactics. That's what she has. When we're gonna leave the house, she has stall tactics. And it's like, oh, dad. I forgot my doll.
[00:01:17] Oh, dad. I don't want to have these socks on. Oh,
[00:01:20] Toni: I need to go poo poo.
[00:01:22] Mikkel: it's like, oh, can I get a piece of bread with me? Can I, it's like all the time and this morning was just like, oh, You know what? I'm just gonna carry you out to the car, let's go. And it was like she did not appreciate it. That's
[00:01:33] Toni: good dad.
[00:01:34] Mikkel: No, you
[00:01:35] Toni: To be honest, this was not what I was asking about. When I ask you about your weekend, just, just put yourself back in the shoes of Saturday evening. Tell me a little bit more about that.
[00:01:45] Mikkel: Aha. So you watched No Sports this weekend, or did you watch the Game Zero Sports. And you know what I thought about it?
[00:01:51] Should we talk about it in the intro? And I decided, you know what? No, because it's gonna be aired when it's already done and Germany has been thrown out by another team. So it doesn't
[00:01:58] Toni: Yeah, that's right. That's right.
[00:01:59] Mikkel: And also I was like, do we wanna now go and. All the German listener base, because you and I are gonna have it out over this game, which you clearly don't care about.
[00:02:08] So, funny
[00:02:08] Toni: story I was, so, 9:00 PM. past my bedtime. So we were basically kind of 10pm because the whole thing was postponed also because I heard like some
[00:02:17] Mikkel: Yeah, thunderstorm.
[00:02:18] Toni: So we were basically sleeping. And as, as people know, I'm here in Copenhagen, I'm from Germany.
[00:02:22] And I was like in bed sleeping and suddenly I heard like, the whole city scream like, and I was like, Oh fuck, did they really score goals? So then I checked it and then I saw like, yeah, the ball, went into the net But didn't count.
[00:02:38] Mikkel: yeah,
[00:02:39] Toni: poo poo. And then I didn't hear any screaming anymore for the rest of the evening, which told me when I woke up, it was like, that was probably in the bag.
[00:02:47] Mikkel: so you didn't see what happened first Denmark scores to one nil and basically the VAR, so video assisted referee determines it's offside by one centimeter.
[00:02:58] And the Danish coach, that was pretty funny. He was like crying afterwards with a picture showing on. Can you see this picture? Can you see this picture? It's like one centimeter. VAR can only do six to seven. That's like the statistical margin of error. So it's impossible. And I was just sitting there and thinking, it's like, yeah, If VAR wasn't there, chances are it could also have been called offside anyway and then we would have been in the same spot.
[00:03:19] Toni: Also, if it was the other way around, he would have not gone around with
[00:03:22] Mikkel: yeah. And then a minute after, VAR again, penalty to Germany. It was just like, you could just see the whole thing flip around. It was like, Oh yeah.
[00:03:31] Toni: I did talk to some Danish folks though, that like honest, good people. not like me And they were like, yeah, this VAR thing was there, but um,
[00:03:43] Mikkel: matter.
[00:03:44] Toni: but Germany was the better team. this is, this is where I'm talking about, I talk to honest, better people and,
[00:03:51] Mikkel: let's see. Doesn't matter. You know, What f all this shit. Let's talk about the stall tactics because you kind of broke my segue, man. And now we're going to have to cut this episode like crazy
[00:04:01] Toni: Yeah, yeah.
[00:04:02] Mikkel: Um, We can probably cut part of it into another episode. Yeah, just the German part for once. No, let's get back to the stall tactics because you and I, I believe.
[00:04:14] Toni: I was just stalling you a story.
[00:04:15] Mikkel: I know we've, there's this wonderful book called Jolt. The Jolt Effect. Check it out on Amazon. It's Matt Dixon talking about all the indecision happening.
[00:04:23] And you and I kind of, saw in the wild.
[00:04:26] A presentation by Manny Medina, CEO, founder of Outreach, we had on the show, talking about also indecision, and we wanted to get a bit into that today, basically what's happening, what mindset do the buyers have, and how do you need to navigate this whole environment at the moment?
[00:04:41] Toni: Yeah. So that's exactly it, right? Because the, if we kind of take it from the, from the top here, I think we're seeing still conversion rates down, we're seeing sales cycles pushing out, we're seeing all kinds of stuff happening.
[00:04:56] And and many, many times it's not that the prospect says, ah, we went with a competitor. Many, many times it's like, nothing happened, just indecision kind of things are pushing out. Let's kick the can down the road. Let's have that conversation in six months again . I really love it.
[00:05:12] Let's talk in December, and um,
[00:05:13] Mikkel: slam the door shut and then open it's like,
[00:05:16] Toni: But it's like, especially when you have a good relationship with the, with the prospect and that's kind of what you get, but let's dissect a little bit where this is coming from. I also have some fresh takes from Jacco, which I kind of met last week for like an extended period.
[00:05:31] He also has some ideas around kind of why some of that stuff was actually happening, but let's let's go and peel it.
[00:05:35] Mikkel: So you went from a meetup in London straight to Berlin while my flight got canceled and I got stuck in London and then you got to spend time with Jacco.
[00:05:42] looking forward to hear that.
[00:05:43] Toni: not true. Then
[00:05:44] Mikkel: No, that was the week after. Oh,
[00:05:45] Toni: and then I flew back to Berlin and then when I met Janis from Weflow for the fifth time in like a week, he just looked at me, Toni, did you, did you, did you move here now? What's going on? This is my turf, but yeah.
[00:05:58] Mikkel: So anyway We've talked previously about all this stuff with the rising customer acquisition cost.
[00:06:04] You just mentioned the, hey, probably conversion rates aren't great. The other thing that's also happened is a lot of layoffs as well, right? I think a lot of folks, if you're at a Series B and beyond, chances are you've experienced some kind of
[00:06:16] Toni: I gotta say, I, I think this has been like, it's, it's going down. Yeah, it's going down a lot. So I haven't, I haven't seen anything big anymore. I think people have been realizing that this is what's going on. I think right now is the calm before the storm, where you don't call it a layoff, where you just call it a bankruptcy.
[00:06:32] Yeah. Like,
[00:06:32] Mikkel: that's
[00:06:33] Toni: that's literally what you, and, and I think we will not see it a lot. Because this is just the kind of message that doesn't get spread a lot. But I think there will be, there will be a, yeah, like a support emoji. But there will, I think there will be a lot of a lot of teams simply going out of business in the next six months, basically.
[00:06:51] Mikkel: But it's also, and I
[00:06:52] Toni: And then, then you don't call it a layoff
[00:06:54] Mikkel: anymore, but, but you know what, that ties into the other thing, which is there are just still fewer rounds happening. I mean, it's probably also picked up a little bit, but it's not like IPOs are waiting in line to get out the door.
[00:07:03] It's not like the, you hear about the series A's and B, c, D, like just
[00:07:08] Toni: No, I mean, so there's, there's quite, quite a lot of stats around this right now. So seed to Series A, kind of that jump used to be 30 to 40 percent after two years, kind of that basic kind of succeed with that jump.
[00:07:19] Right now it's down to 12, 12 percent, one and two. And then we have the average IPO ARR. You could IPO in the, in the wild days with a hundred million in ARR, like roughly now it's up to an average 350 million in ar. Yeah. And then you have all of those 350 million dollar companies in ARR, which is outreach is probably one of them, by the way.
[00:07:40] Yeah. That probably see massive churn and suddenly like, suddenly the IPOs out of reach, so what are they gonna do? Right. Yeah. So maybe different, different talk track for different episode. But I think all of that stuff. While you don't see the layoffs anymore. I think all of that stuff is still ongoing.
[00:07:55] And uh, we just recently saw Reveal and Crossbeam merge. So I, I think Crossbeam bought Reveal basically. And would, would reveal buy a tool kind of just before they're being kind of acquired somewhere? Kind of, is Crossbeam buying a tool now because they just kind of did this thing?
[00:08:11] So there, there, there will be a lot of these things out there that. Kind of also add uncertainty, fear and doubt on the buyer side, right? Kind of they know something is happening and maybe then they go, maybe they themselves don't know. And then they go to the CFO and it's like, Hey, can I buy this tool?
[00:08:25] And then the CFO looks at him and is like, I can't tell you why, but no.
[00:08:28] Mikkel: No I think that's the other thing that then happens. If you think about the C level, they're squeezed by all this stuff on ability to extend runway and have also, you also have to realize it's also pretty painful for that team to go through layoffs, for that team to see it being hard to raise cash, that team seeing the growth suffer. And so what can they do?
[00:08:50] They can hammer that we need to be efficient. We need to really be conscious of cost and spend. And that just trickles down to everyone in the organization, right? So, right now so far, we have a software buyer who just got through layoffs like six months ago not seen any rounds being raised, might also have an idea that some companies are probably gonna die maybe not as many recruiters reaching out anymore, you need to be efficient and get in a lot of no's for buying software.
[00:09:15] It's, you know, it's, it's get harder and harder and then at the end of the day, if they are going to recommend buying software, They also have to be confident that it's going to work out, right? And I think at least in the heyday of SaaS, a lot of us were selling ahead of capabilities as well. So a lot have been kind of burned by software who couldn't deliver on the promise.
[00:09:38] Toni: And then I think there's also another fact that happened, even in the heydays, PLG came around.
[00:09:45] Mikkel: True, yeah.
[00:09:46] Toni: And you could say there's the idea that I'm going to talk about now, that was there before, but basically try before you buy, right?
[00:09:54] And super easy opt out periods, meaning while you're on a monthly cycle, You can just stop paying next month, right? It made all of these things at least in the buyer's mind, gave them the opportunity to buy stuff. Without needing to go through all of those risky steps, right?
[00:10:12] Mikkel: You know what, I just wanna pinpoint just with an example, how that shift, how fundamental it can be. So speaking of the football game, I had to buy a license to a TV station to watch it and I could choose with and without ads.
[00:10:24] And I was like, you know what, I'll take it with ads because they're not gonna stop the game to show me ads. And I just want it for the game at the end of the day. Right. Then my wife goes yesterday, so I heard we have a subscription for this now can we watch this show? I was like, sure, Yes.
[00:10:39] And we start the show and basically ads for five minutes. And I look at her and it's
[00:10:44] Toni: I'm like
[00:10:45] Mikkel: oh, I forgot what that was like. I really don't like it. This is terrible. Should we do something else? And it's just, I think that mindset you have, you have to realize, sure, trials were there before. But it's way more prevalent now.
[00:10:57] There are smaller tools being acquired all the time, where some of them, they're just, I mean, we're using a PM tool that's just been free pretty much forever for us so far, and it's brilliant. It works, right? So there is definitely that shift too.
[00:11:09] Toni: No, and then, then I kind of, ultimately, I think there's a, a buyer expectation thing that changed.
[00:11:14] And if you can't deliver against that, it's kind of tough luck for you, right? We're going to get into this a little bit more. But then the other piece, which the Jolt guy and, and and Manny Medina and so forth, kind of been talking about is kind of the shift from FOMO to FOMU.
[00:11:27] Mikkel: what
[00:11:28] Toni: What does that mean?
[00:11:29] Fear of missing out. That's pretty straightforward. Kind of, this is what we had previously, very much associated with, VCs trying to deploy rounds. It's like, Oh, I didn't get in. So I'm, I'm fearful of missing out on this opportunity. But he had some signs of that also in well, if you don't buy this tool, maybe you'll be left behind.
[00:11:46] Right. And this is now switched to fear of messing up or fucking up, fear of fucking up. And this really kind of is about, well, maybe I do wait. Yeah. Maybe I skip. Maybe it's, it's suddenly, it suddenly became safer to sit something out than than it used to previously, right? Kind of sitting out was the negative.
[00:12:08] Now sitting out is, is probably the safe bet
[00:12:11] Mikkel: bet. Yeah, and I think it's also like you have to realize that a lot of research has proven that we experience the emotions of losses way more severely than those of gains, right?
[00:12:23] So there's a lot at play here. So we basically painted a picture of a lot of SaaS buyers who are freaking out. And what are companies to do? How do we, like, where do we go from here?
[00:12:33] Toni: Yeah.
[00:12:34] So let's kind of talk about some of the things you can do. Right. And we're going to try and put it into contrast of what people have been doing previously and, and and how that now kind of fares. Right. So the first piece is try and figure out if you can start small.
[00:12:51] So instead of trying to deploy 50 seats in one go, a hundred seats in one go, try and start uber small, right? So this will help you in two ways. One it will make the the proof points much easier to control. So the things you need to achieve for someone to be happy and successful and it will give you obviously the opportunity then to upsell later on.
[00:13:12] Right. But also if this thing fails. It's not going to be a 100k churn you have in your hand, it's going to be a 10k churn you have in your hand, right? Kind of, it's like a, it's, it, it goes very much against how we have used, used to operate, honestly, right? We want to have the 100k now, and then let's see what happens.
[00:13:29] It goes very much the other way. And, and I think for teams that are 10, 20 million plus, I think this will be extremely difficult to try and implement this with their sales team. Like extremely difficult,
[00:13:41] Mikkel: They're gonna be so what about commissions?
[00:13:43] Toni: So So exactly, right? And this is, I recently heard a, a fun term by someone that people are still gacking around.
[00:13:50] So growth at all costs but on a budget, right? So basically they're still kind of doing the same thing that, that they used to in the, four years ago, but you know, they can't completely ridiculously burn money anymore, but the tactics are still the same, right? And what we've been talking about so, so much like, GaaC versus PEG and whatever the, all of that stuff.
[00:14:10] And ultimately being a bit more responsible and smart with your money, building a good business, basically. That also requires a change in behavior, right? And this here would be a change in behavior, kind of trying to get your sales rep to, if, if someone says, Hey, you know, I really want to start small.
[00:14:26] I want to start with 10 seats, not trying to put an offer in front of them that 50 seats, but heavily discounted and so forth. Right. I
[00:14:33] Mikkel: I think it's also, you have to realize that there will still be some buyers out there that have some level of discretionary budget they can use without needing to go through approval. And if you can kind of get almost, I would say, into that threshold, you have the benefit of not having to deal potentially with a CFO or someone else who's just gonna pull the plug in the background.
[00:14:51] So there, there is some upsides, definitely things to navigate in terms of how you want to do it. And I think you have to assess what makes sense to your
[00:14:59] Toni: Yeah. And again, see it from the buyer's perspective. Do you think you can get them to commit to a project that is 10, whatever,
[00:15:07] Mikkel: Yeah,
[00:15:07] Toni: 10 people versus a hundred people? Do you think this is gonna help them overcome their fear of messing up?
[00:15:13] Yeah. Right. Do you think that the last five times that they bought something, which maybe was a PLG driven motion This is actually exactly how they did that. You know, Did they, did they buy something, did they buy a Calendly and then rolled it out to a hundred people or did they just try it with a team of five for like a month or two and then kind of got the confidence like, Hey, this is fucking great.
[00:15:35] Here's the business case. That's how we should go about it. Let's roll.
[00:15:38] Mikkel: I think there's also the other side of the coin, which is think about an account executive at Salesforce, right?
[00:15:44] They will have an incentive. Incentive to add on Tableau, to add on Eloqua, to add on, name a million other pieces of softwares. So when you enter a, buying cycle with someone, you're going to basically end up trying to push a lot of things to that prospective client. And they might actually get overwhelmed, especially in this environment.
[00:16:04] I still remember to this day when I was commuting and I had the iPod, 10, 000 songs on there, and just couldn't figure out what to listen to. So they might also simply be overwhelmed in the AEs, poor me, poor me. But they might also simply be overwhelmed in that process because they just see all the CA CHING, CA CHING, CA CHING that the AE adds on.
[00:16:22] So I think starting small has some merits for sure.
[00:16:24] Toni: And some people might say, well, but Toni, that, that will mean my ACV is going to get a kick and so forth, right?
[00:16:30] So how, how's my CAC Payback going to work out? If my ACV is going to go down, do I then need to change my motions and yada yada? And the answer is no. The answer is actually that instead of then taking your initial average contract value, you should take your average contract value over the next two years.
[00:16:47] That's how you should be thinking about it. And then if that still doesn't get you to the right spot, then yeah, then you might have a problem, but you might have a problem anyway. But basically kind of getting from your initial item that you sell over time. And that's why we're saying average, not the peak.
[00:17:02] Because for the first half a year, you will simply get less money period as you then upsell, right? And again, right? So, if you are able to upsell that stuff and this is why this makes sense, kind of the upsell itself will be much less costly than the initial deal. So you kind of need to fold it into your CAC Payback expectation and
[00:17:22] Mikkel: expectation So some folks, you know might rule this out all together. What other options do we have kind of in the drawer?
[00:17:28] What other tools do we have to play with
[00:17:29] Toni: play with? Yeah, so the next thing is and this really goes, I mean, I think almost all of this goes for all the poor folks of us that don't have a PLG motion.
[00:17:38] Mikkel: module. Yeah, true.
[00:17:39] Toni: Right?
[00:17:40] So the next one is really try before you buy. Yeah. So, I mean, if you talk to anyone in the scale up community that is mid market and up or something like this, and you say like, Hey, you know, we're, we're thinking about doing a free trial or POC or kind of an opt out period or something like this.
[00:17:56] They're just going to look at you and it's like, Toni, you can't do that. That's like, that's going to ruin your metrics. It's going to ruin the stats. They're just playing around. And we actually have been doing this once or twice ourselves now very successfully, kind of our conversion rate from opt out to to full deal.
[00:18:11] Currently it's 100%. And maybe you've done it more than once or twice, by the way. Um, But basically kind of the idea is, especially if you're selling something completely new that is untested and so forth, and also a young company in our case, I think this can remove a lot of fear and uncertainty on the other side.
[00:18:28] I kind of see, Hey, this actually works. I understand how we're going to use this. I clearly see the value, et cetera.
[00:18:34] Mikkel: this is not just in Figma.
[00:18:36] Toni: Well, there's, there's all kinds of things, right. But the, I think the reason why POCs have an extremely bad reputation is if you do this under the premise of, okay, the deal basically fell apart twice already. And now I'm going to knock on the door and be like, Hey, do you want to have an opt out or a POC? Well, that deal has gone bad already. And then playing that card, I mean, it's a Hail Mary basically. And then judging that tactic because he only deployed it with the poor sample set. Kind of all the people that already said no twice.
[00:19:09] And then saying, see that tactic doesn't work. I think this is where a lot of that thinking is also coming from, right? But again. What does that mean? It does mean that your sales rep's behavior needs to change. Suddenly the sales rep is not only, signing the deal, throwing over the wall, bye, but suddenly the sales process really extends until the POC or the opt out or whatever it is, is over, right?
[00:19:32] And that might, in some cases, mean it extends another month. In some cases, it might mean it extends three months. And how is your sales rep's behavior then changing? Based on that, I kind of, how is he or she then engaging with that ongoing POC? How are they kind of coordinating with a CSM and so forth? Extremely, extremely difficult actually.
[00:19:51] But there are some places where you can look and get some learnings from.
[00:19:54] So I recently talked to a old buddy of mine that used to work at Looker pre Google acquisition. And this whole very technical BI space, also when you sell to technical users. They, they very often have a standard step in their process and their sales process.
[00:20:11] Which is called technical validation. Does this shit work for us? Right. And he was with Looker, especially competing as Power BI, much cheaper against Tableau and so forth. All of them had like self serve options where you can, can go and click around. Looker didn't have that. So what did they do?
[00:20:28] They actually leaned in pretty heavily. And very early on realized that they actually need to kind of get this tool really in the hands of the users to experience the power of it and then kind of selling it from there. And we know from some, from some different sources that they actually had from this technical validation to closed won, they basically had a 75 percent close rate, right?
[00:20:50] And, and the great thing here was it was a great. Internal sales enablement, artifact, right? The buyer could go around and show them, show the other buyers in the room. It's like, Hey,
[00:21:01] Mikkel: Hey, look, it's the same the same
[00:21:04] Toni: right? It totally proves my, pain points. And then also great way to then super smoothly transition this then to the CS team.
[00:21:12] Mikkel: Yeah.
[00:21:13] Toni: Right, it's like super straightforward, right? Very smooth, right? But it does mean, it does mean, and this was the case for Looker and probably for many of us as well, it's like, well, you probably then need to still deploy solution engineering energy from your side. You need to onboard that team. And then, oh my god, what if, what if they say no?
[00:21:30] Well, like, yeah, that's, that's the risk that you take.
[00:21:33] Mikkel: know what? I think that's also, it takes, when you think about it, it takes a lot of risk off for the buyer, especially with a complex tool like BI, because they might think, well, do I have the competency to actually pull off this implementation?
[00:21:44] The episode before this, we basically, Spend the entire episode trashing BI with all the failures of implementation and all that stuff. So I kind of get it. I kind of get that part leaning in. Plus they really understand the tool and the space. So they're kind of experts in the eye of the buyer.
[00:22:00] So yeah, I mean, they called it basically forward deploy. You can also watch a video on First round VC where they basically talk with the founder of this stuff and how they've used that tactic. Right. So, definitely worth it. I also think Jason Lemkin is one of the folks who basically asks, will you do the work for me or will I have to do it as a buyer?
[00:22:21] Right. And I think that's kind of the mentality. It will definitely require solution engineers. You're going to see more costs associated with it. But hey, if you can have 75 percent close rates on those that run through a POC or forward deployment, I think it might be worth it.
[00:22:35] Toni: it No, and many people will be like, ah, you know that I'm not sure that I'm going to make this work out with my resources and so forth. To a degree that's in this current situation, that's tough luck That's actually kind of how you need to think about this. It's not the buyer's fault that you can't do it. I mean, we had the same thing kind of said like no to trials. And the, the, the problem is, and this is really kind of the conviction you need to have internally is like, well, will you close more deals because of it?
[00:23:01] Mikkel: Yeah.
[00:23:02] Toni: That's actually how you need to think about it. And if the answer is yes, then that additional deal that you close could very easily finance that solutions engineer that you're going to use in order to spend time on this. All kinds of math around this, but really, really think about how something like this can take a lot of fear and certainly doubt off the table.
[00:23:23] And on the flip side. And this is kind of, a bit of a it's almost like a bit of a reverse problem. Well, if you don't do it, let's just say that became the standard. We have really far away from that being the standard. Let's just say it became the standard. You not doing it would almost be like a red flag to everyone else.
[00:23:41] Right. It's like, okay. So all of your comp, everyone is expected behavior. Now you are not doing it. For maybe super legit reasons, like absolutely legit reasons, but maybe for the buyer it's going to be like, well, maybe it's because they're not that convinced of their product and that their product is going to carry them through.
[00:23:58] So maybe, maybe that's actually the reason why they're not doing it, right? So I think murky waters ahead, but again, change in change in the behavior that, that also your sales rep would actually need to need to
[00:24:10] Mikkel: also just have to point out, if no one is doing it, it could become also a small advantage for you at the end of the day, right?
[00:24:16] So let's move to the last option.
[00:24:19] Toni: Yeah, so the last option is all about trust, trust, trust, trust, trust. Some of this is a little bit overlapping with one or two items that we kind of just mentioned earlier. But number one try and give them an easy out. Try and give them a, okay, this doesn't work, I need to kind of Pull the eject button or something, and kind of, kind of get away.
[00:24:39] What I would actually do is I would probably kind of try and keep it within the first one, two months or something like this. Like, so we had, so we had an agency engagement, like you and I, right. Kind of, we worked with them and they wanted to sell us an annual contract. And then we said like, no no, that's too much.
[00:24:55] And then they were like, you know what, actually kind of our other package is three months upfront, we work with you. And then you make a decision for the next nine months. Right. And that was great. We actually decided not to do it. Uh, So we would have spent a lot of money for an agency that we actually didn't want to have, stuck with that thing, right?
[00:25:13] So if you if you allow for that that makes it a much easier decision, right? It's really the buy decision is three months worth of your product. And then the cool thing is if this is an opt out, you should definitely structure as an opt out then your decision maker doesn't necessarily, and some well organized organizations that we kind of do it still, but they don't necessarily need to go back again to the economic
[00:25:37] Mikkel: part to
[00:25:37] Toni: to get the sign off, right?
[00:25:38] Kind of, then it just folds over and it's a, it's a, it's a much better way because then the economic buyer purchasing decision. We're talking small media enterprises, like up to 250 employees and running this. It's going to be like, well, let's do the opt out. We have the risk on our side. Let's sort of do that kind of three months.
[00:25:55] Yeah, sure. I need to pay for that, but not for the rest. And then really the, the bigger decision is, is kind of a downstream that happens that where sometimes I think the economic buyer either isn't involved or it's a, Hey, you know, we are not going to pull the opt out because we actually like this service.
[00:26:11] Mikkel: like
[00:26:12] Toni: And then the economic buyer can just say, okay, let's do that
[00:26:14] Mikkel: it's also actually when you have that point in time, let's say it's a three month opt out and you have the check in, let's say it was really, really successful. Like that would have been a lot of leverage in the negotiation.
[00:26:25] We would have, I would have been inclined to say, you know what, this was what we looked at buying, but is there like a another tier where we get up? So, you know, it changes some of the dynamics as well.
[00:26:34] Toni: So, we didn't discuss this, prepping this, but now that you say that, now that you say that the there is an argument to be had that if you do an actual POC, like, proof of concept, proof of value, they're kind of a little bit different, but still sometimes people throw them in together instead of an opt out.
[00:26:51] So the difference is that when you do the opt out, You need to fully negotiate the contract up front, right? You say like, Hey, this is the contract we're signing. You have a chance to kind of pull the plug. But at that point, when you negotiate the contract, the customer still has this Inherent discount in the head, where they think like, ah, you know, I'm not sure if I like it that much, and it's kind of, let's pull the price down and so forth and you still have that leverage where you can't just, hey, but it does, what's the problem, right?
[00:27:20] You don't have that leverage. If you do a POC, which basically is two separate contracts. Right? Kind of you do a, you do a period for, for two or three months or whatever, and then you have a full contract afterwards. You basically kind of then have, have a little bit more control, right?
[00:27:36] Because the value is clear. This thing works. I would, and this is where I'm going. I would say that you might be able to have a higher ACV after a completed POC. Like a higher average contract value after a successfully completed proof of concept that then flips over into a real deal, right? You will be less pushed to give discounts because the value has been proven already, right?
[00:28:00] So there's, there's a couple of those trade offs here.
[00:28:03] Mikkel: I think this also leads into another PLG thing, which is the whole, Having incredibly, incredible flexibility on contract level.
[00:28:10] Like you can just go in and switch between monthly, annual, add to your liking, cancel month by month, right? Not saying you should start doing that necessarily as a SaaS, but there is also something on how flexible can you be on the
[00:28:21] Toni: the terms.
[00:28:22] Yes, I think that's one and then then everything trust that you can think of, right? And this is like infosecurity stuff. It's compliance with, GDPR, it's different, customer case reviews, analyst reports. And then the other thing is also just big brands, like as customers, like, ah, if it's good enough for Adidas, I think it's okay for me, right?
[00:28:42] Kind of, if you have some of that stuff, I think that can help build trust. I would say also, another one is you have a strong brand on social, if your is, active active on social and kind of building up a following. All of those little things, they will be able to kind of gain you
[00:29:00] Mikkel: And if the founder is not that successful at it, you can always find a reference customer instead.
[00:29:04] That is actually also very powerful because then they have a chance to actually interact with someone who is an ambassador, who will not have a incentive necessarily to sell you on it. But will just tell you how it is. So I think that's at least a couple of options. in order to overcome some of this indecision that people are struggling with.
[00:29:26] Toni: I think the biggest thing here, I mean, the last one is kind of, well, flexible contract terms, I think that, and opt outs and stuff. I mean, all of these things will mess with your sales team. And I think this is where the change needs to start. Well, probably the change needs to start with you and understanding kind of which levers do you want to pull and maneuver, how to change something.
[00:29:47] But implementing this with your sales team, let's say like 10, 15 sales reps is going to be really difficult, really difficult. But I think this is really the move that you need to do, from growth at all costs to something else. We're just talking about the new something else and maybe this is part of the new, new way of doing things.
[00:30:04] Mikkel: I think so.
[00:30:05] Toni: Thank you everyone for listening. If you really enjoyed this show, share it with your folks hit like, subscribe thumbs up,
[00:30:12] Mikkel: buy, purchase,
[00:30:13] Toni: exactly all of that stuff. And then thanks Mikkel. Bye bye guys.
[00:30:18] Mikkel: Bye.