“The enemy of any enterprise opportunity, or any sales opportunity, is time,” says Kevin Beales, the co-founder of Refract and several other enterprise SaaS companies.
“That time creates risk. Things change. Companies change. People change. Priorities change.”
Beales’s solution is to create a compelling trigger to close the deal now. With a SaaS model, if you get the deal now at 80% of the value that you might get in six months time, in the long term you end up with higher revenue and lower risk than if you try to extract the maximum amount of money and “win” the negotiation.
A common refrain Beales hears from customers is that they can’t commit now because we haven’t got budget left in this financial year and their new financial year doesn’t start until July. “There’s no reason why we can’t do an 18 month deal, where you don’t pay anything until July,“ says Beales. “We align payment with that period of time to get the commitment now.”
Another frequent sticking point is that the customer won’t use the product for the next few months. ”What can you do that might enable them to make the commitment today without feeling exposed to cost and loss of value?” says Beales. “If that means discounting a Saas sale to recognize that there is a period of time where there is more limited value, that may be better than hoping to derive maximum value, but with the risk of it being in three or six months time.” Create a compelling trigger to sign a deal now rather than just waiting for that trigger to arrive in the future.