Get Incentives Wrong in Sales — And You Lose Deals. Sometimes, Really Good Ones.

Perhaps the “cheapest” thing a salesperson did was hide a cheaper edition from us that would have better met our needs. And by doing so, that vendor lost a top logo account (us).

When we went to build SaaStrPro.com, we identified 2 vendors (of 50+) that met our complex needs for a SaaS learning management tool.

Vendor #2 was much easier to use, and more modern — but lacked a few critical functions at the time. They lacked some key integrations in particular.

So we started with the somewhat less modern, but more feature-rich vendor #1. We piloted it, and spent dozens of hours working with it. And then at the end, the sales rep gave us an insane price. Not only was it crazy expensive to start, but it escalated in a way that was inconsistent with our pricing model.

We tried to negotiate, explain our constraints, etc. But the rep was unyielding.

After over a month, we moved onto the limited, but easier to use vendor. And it has been great.

Once we moved on, the CEO of the first vendor reached out to me and asked why they lost the deal. I explained the crazy pricing to him. He asked why we didn’t just use their SMB edition, which missed some features but not any that we cared about too much? It was 1/5th the price, and the pricing scaled more intelligently with our needs.

Well, we said we weren’t told about it. And now, it was just too late. We’d moved on after a month of drama.

The lesson: incentives really matter in sales. If you have say a $50k product and a $5k product, and the same commission rate … which product is a rep going to try to sell? Might a rep even … hide the cheaper edition?

Incentives are tough.

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Published on June 1, 2019

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