So we’ve done a few good posts on SaaStr about how to steal a customer / prospect from a competitor on SaaStr here:
- How to Steal a Customer From the Competition (a good one)
- Want to Steal a Customer From the Competition? You Gotta Do the Work
- (Of Course) Your Competition is Trying to Sell To, And Steal, Your Customers
And yet, I still see so few SaaS companies doing even the most basic steps here. Too many just ask, “Is there anything we can still do to win your business” … once the deal is totally lost and long since signed with another vendor. Why do they even bother? I get that most sales teams aren’t structured to really put in the work here, to steal a customer. But there is one simple thing you can do — enable and put guidelines in place for buy-out deals. To buy potential customers out from long-term contracts they’ve already signed and paid for with the competition.
You can always offer a Buy-Out Deal to steal a deal, or steal it back. In fact, in many cases, you should.
What’s a Buy-Out Deal? There are many variants, but in its simplest form, the customer doesn’t pay more to switch, but sometimes extends the total term. It’s that simple:
- A customer 6 months into a 12-month contract? Well, then give them 18 months for the price of 12.
- A customer that just signed with a competitor? Well, that can be a tough one, but you may need to give them even more than 18 for the price of 12.
- A customer that’s paying a little less than usual with a competitor? Well, you may have to match it, at least at first. This one can be more complicated, but if you aren’t clearly the more enterprise option, why pay more?
What about sales commissions? It’s up to you, but back in the day, when DocuSign was competing with us, they gave reps a full commission on the total theoretical deal, not just the net new revenue part. That may not work unless you are very well-funded, and it may not make total sense in most cases, but it’s a learning.
The bottom line is, if you want to steal customers from the competition, at least think about it from their perspective. Almost no sales reps I talk to really do. They still treat it all as “a deal”. That “there’s still a deal to be had” is a type of language I hear too often from sales. No, it’s never just a deal to a customer. Especially if they already are paying for another solution.
Why would a customer want to pay twice? Would they want to pay more, even if the vendor is a little better? Even more importantly, do they want to go through the hassle of switching and still pay twice? You have to make it easy.
Zoom won the video collaboration wars, but it wasn’t always so clear. To beat WebEx in the early days, it had to compete with multi-year lock-in deals WebEx had put in place.
What did it do? Buy-out contracts. Yes, Zoom had a better product, but WebEx was still fine, working, rolled out, folks were trained in it, and customers had already signed multi-year contracts. Zoom had to do more than just offer a better product.
If Zoom did it, maybe you should at least think about it, too. And then set up clear guidelines and an exception path for sales. So they don’t accidentally blow a deal that … could be stolen.
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