One of the most common questions I hear salespeople ask is, “how do I beat my competitors?” As we all know, it tends to be a lot harder to win large deals when you’re competing against other companies (especially ones that may be more established than yours). So if you’re competing for large deals, there’s an easy way to get your competitors to lose interest in deals: make them smaller.
I know the idea of downsizing deals is unappealing, so let me clarify: you just have to reduce the size of the initial deal. If you play your cards right, the deal will in fact get bigger after the initial close.
Why would this work? First, your customers want to minimize risk, so starting small with an automatic order increase after the fact is appealing. As for your competitors: because they target big companies, chances are that they have minimum size qualifications. Once they discover that your mutual target is budgeting for a deal beneath their thresholds (which you defined), then they will lose interest.
It’s not hard to convince small and medium-sized customers to start small. But how do you convince your enterprise customers to start small? We just did a webinar with sales consultant and author Andy Paul, who offered a great solution. According to Andy, the best way to sell enterprise customers on the value of starting small is by approaching it from the perspective of risk.
Every time we make a purchase decision, there is a risk involved. This is true no matter how small the purchase. As an example, avocados don’t always taste as good as they look. But luckily, a bad avocado only sets me back a couple of dollars. When expensive software purchases don’t pan out, it can cost companies thousands of dollars (and decision makers their jobs). The bigger the purchase, the more risk that’s involved. But starting small reduces that risk. In the grand scheme of things, a small deal that goes bad is the equivalent of buying a bad avocado. Best of all, by reducing risk, you’ll likely close deals a lot faster. After all, it’s a lot easier to get approval for a 5-seat SaaS deal than a 200-seat deal.
Rolling out deals gradually isn’t only less risky for your customers. It’s also less risky for your company. It really gives you the breathing room to make sure that your customers are successful every step of the way. Ultimately, as salespeople, our job is to help our customers succeed. Once your customers taste that success, those deals are going to get a lot bigger. I’ve seen it happen time and time again. So let your competitors chase those huge initial deals, while you focus on lifetime value instead. Your competitors will never know how much revenue they walked away from.
Want some more tips on how to win deals away from competitors? Check out our webinar How to Close Bigger Deals on demand.
Jesse WestDirector of Lifecycle MarketingringDNA
Jesse Davis West is Director of Lifecycle Marketing at ringDNA, focusing on improving the experience and maximizing the lifetime value for customers across their entire journey. Drawing on 9 years of B2B marketing experience, Jesse is passionate about communication, branding and strategic marketing. He also plays a mean lead guitar and can throw down at karaoke.