Dear SaaStr: How Do I Monetize a Product Without a Clear Budget Line Associated With It?
First, bear in mind every organization from the smallest SMB to the largest enterprises has some discretionary budget. When I was a VP at F500 Tech Company, I was the most junior VP, but I still had a $400,000 a year discretionary budget to use whatever I needed to solve my team’s problems. I think my boss had a $4m one.
Now that sounds like a lot, but it’s not that much. Because everything discretionary has to fit into that. But it’s at least real budget I (and others) can use to get apps into the org.
So sometimes, the best way to get in where there is no budget is smaller.
And a few ways to sort of … create budget:
- Start Small and Expand. And Embrace Paid Pilots.
This isn’t always the right approach. Sometimes, if you don’t close all the seats, a bigger competitor does. But if it’s isn’t budgeted, starting small is usually the right approach. If you’re struggling to get customers to commit to a big spend, start with a low-cost offering or pilot to get your foot in the door. Once they see the value, you can upsell them to a more comprehensive solution. - Leverage Use Cases and Case Studies. Show That Others Like Them Are Finding Budget — And ROI.
Build a taxonomy of use cases that demonstrate how your product solves specific problems. For example, Datadog’s founding CMO Alex Rosemblat emphasized at SaaStr the importance of creating a playbook for every use case and working backward to show how your product drives value. Use case-driven selling can help you connect the dots for your customers and justify why they should carve out budget for your solution. -
Find the Pain Point You Solve and Quantify It
Even if there’s no explicit budget line item for your product, your customers are likely spending money somewhere to address the problem you solve—or they’re losing money because they’re not solving it. For example, at EchoSign, we weren’t replacing a specific budget line item for e-signatures in the early days. Instead, we positioned ourselves as a way to save time and money on manual contract processes, which was a pain point companies were already spending on indirectly (e.g., admin costs, printing, mailing). Quantify the savings or ROI your product delivers and make that the focus of your pitch. -
Create a New Budget Line Item
Sometimes, you have to educate the market and create a new category. This is hard but doable. Look at Grafana Labs—they didn’t try to monetize every user of their open-source software. Instead, they focused on enterprises with big budgets and specific needs, like security and compliance, and built premium features for them. They essentially created a new budget line item for observability tools by showing how critical their product was to enterprise operations 2. -
Target the Right Buyer
If your product doesn’t fit neatly into an existing budget, you might be talking to the wrong person. For example, at EchoSign, we found success by targeting sales and legal teams who were directly impacted by slow contract processes. They didn’t have an “e-signature” budget, but they had budgets for tools that helped them close deals faster or reduce legal bottlenecks. Identify the stakeholders who feel the pain most acutely and have the authority to allocate budget. -
Sell the Solution, Not the Tool
If you’re selling a tool, it’s hard to command a high price. But if you position your product as a solution to a big, expensive problem, you can justify a much higher price point. For example, Adobe Sign / EchoSign wasn’t just an e-signature tool—it was a solution for automating entire contract workflows, which made it easier to sell to enterprises at six-figure price points.
Ultimately, you need to align your product with a problem that’s already a priority for your customers. If you can’t find one, you might need to pivot your positioning or even your product to address a more pressing need.
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