Seth Godin wrote a wonderful post about this infamous phrase: “I can’t afford it.” As always, I will try to add the SMB point of view on this notion: If you set your heart on selling to small and medium businesses, be ready to hear this phrase. A lot. It is not intentional: SMB owners or managers run on a smaller budget but often don’t have the support system of a large company to help them in making the right decision. As a result, they will give you the easiest answer: NO. One cannot go wrong by not spending… Here are some tactics (and mistakes) used by companies that are selling to SMBs:

Prove your product ROI—Many companies will create some kind of pseudo-mathematical proof for the superior ROI (Return On Investment) of their product/system. It goes something like this: “your salesmen spend 1 min per phone call to locate and dial a number. They make 30 calls a day and therefore spend 10 hours a month dialing. Since they cost you $100,000 a year, you spend more than $5,000 per salesman. My system will locate and dial in 12 seconds, saving you $4,000 a year for each salesman. Since you have 10, you will save $40,000. The system costs $35,000, and therefore you will recoup your investment in less than a year.”

The flow of this method is twofold: It is usually not believable and it is rarely touches a real pain point that a customer will be willing to pay for. Here is how ROI-like tactics can work better:

 

  • Figure out a real pain point if you want to use ROI. Hint—for SMBs, systems or products that drive revenue up are better perceived than products that increase efficiency, especially not better usage of employees’ time (unless they run a production facility or the like).
  • Make them specific for the customer— know it requires some work, but it pays off. Get a good template and use the data you collected about the customer to modify it for each sales call.

Price reduction—Seth suggests selling a better product and having a better story. While he is correct, moderate price reduction is well perceived by SMBs. Since SMB managers really care about the business budget, as it was their own (and in many cases it is), the negotiation and the sense of achievement make them feel good—don’t take it away from them…

Use references—If you sold to similar customers for a similar price, use it! In many cases, SMBs would not have any benchmark or history to draw from when buying a new product or service. They don’t have the time to benchmark themselves, so they will default to NO. If you can prove that the price you charge is what the market pays for it, you just made a very strong point.

Don’t use “It cost me more than what you pay”—This sentence will not get you anywhere. If you can’t sell based on value, don’t try to sell based on cost: 9 out of 10 people will consider you inefficient or dishonest if you make this statement.

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