How would you convince a CEO to buy your solution/service instead of your competitor’s, when your own service costs 1.5X that of your competitor?

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JASON LEMKIN

Anchor high.

Especially in “oligopical” markets with 2–3–4 core vendors, usually the “most enterprise” and the “most trusted” brand ends up being priced more than the competition.

Think of United/Delta/etc. Business Class vs. Southwest Regular Class.

Or Salesforce vs. Anything Else.

This doesn’t really work for tiny customers and folks looking for something “good enough”. You will lose those leads if you Anchor High. So if you want to achieve 90%+ market share (not just revenue share, but market share), Anchor High doesn’t always achieve your goals.

But if you are selling a true solution to a problem, and the customer is picking a 3+ year partner … most businesses would prefer to pay a bit more for a partner they can trust, that can scale with them, and that can provide the best solution for their needs.

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A little more here: Why Competition Is So Bitter in SaaS: Oligopolies and Dominant Strategy Equilibriums – SaaStr

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Published on September 3, 2017
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