By Geoff Roberts 9 min read
Handling objections is something that has always been part of a salesperson’s job. The ability to overcome the most common objections that you hear about your product or service can make or break your company; particularly if you’re a start-up.
I’ve been marketing and selling a paid version of Outseta to potential customers for a year now and I’ve spoken with close to 1000 SaaS start-ups in the process. This post serves two purposes:
To share 5 specific, actionable tips to help you better handle your start-up’s objections
To highlight our approach by directly addressing the most common objections that I’ve heard about Outseta
Let’s start at the top.
5 Tips For Handling Your Start-up’s Objections
Here are some hard gleaned tips on how to best handle objections from your start-up’s potential customers.
#1 - Beware of argumentative language
Early on I found myself writing in email and saying during product demos, “I would argue that…”
I wasn’t trying to be argumentative or combative - at all - I was just trying to advocate for a different point of view. While that’s the case, using phrases like this can subconsciously create a sense of conflict that’s unnecessary - there’s no need to position your point that way.
When I first drafted one of the answers to our objections that you’ll read below, I wrote, “I would argue that this list is exactly what start-ups don’t need at an early stage.”
“This list is exactly what start-ups don’t need at an early stage,” loses that argumentative context, however slight, with the added bonus of coming across as more factual, direct, and confident.
#2 - Talk about your strengths, not your competitors’ weaknesses
Your product will almost always be evaluated alongside competitive products, so it’s only natural that you’ll field questions from prospects about how your product stacks up versus the competition. And if you’re in any reasonably competitive market, there will always be instances where your competitors offer features or functionality that you don’t or that’s better suited to the prospect you’re speaking with.
When handling objections about your product versus your competitors’, my advice is essentially don’t go there. Your competitors’ product offerings are probably changing quickly, much like your own, and staying up to date on exactly what each competitor offers is probably not the best use of your time if you’re working in an early stage start-up. Instead, focus on what you do know - your product and company’s strengths - and emphasize why those strengths are important to solving your prospect’s challenges.
#3 - Acknowledge legitimate concerns as legitimate concerns - step into your prospect’s shoes - and ask what would alleviate their concerns
Remember that prospects are people. If they’re looking to make any decent sized investment in a product or service, chances are they’re responsible for that decision. If you’re selling a B2B product it most likely impacts their job, their life, and their chances of a promotion. They should have objections!
Once you talk to enough potential buyers, you’ll quickly learn what the most common and legitimate objections to your product are - acknowledging them and showing a little empathy and understanding of your prospect’s concerns goes a long way.
But far too many companies stop short of one critical step - be sure to ask the prospect what would alleviate their concerns. Oftentimes the objection is something you can’t immediately do anything about, but sometimes prospects can surface ideas themselves that make them feel more comfortable moving forward. You never know unless you ask.
#4 - Encourage them to challenge the status quo - start-ups don’t win by doing what everyone else does
The proliferation of business advice and content on social media and the web has created a copy-cat society in the business world, one where companies flock to replicate the latest best practices. But if everybody’s doing the same thing, no one is innovating towards gaining a competitive advantage. Just because one strategy or way of doing things is widely adopted doesn’t necessarily make it the best.
That’s what start-ups are all about! Don’t be afraid to point that out and encourage your prospect to challenge the status quo, politely.
#5 - Recognize not everyone is an early adopter - leave the door open for later
Working with an early stage start-up in any industry typically comes with a greater degree of risk than working with a more established company - we’ve all heard the old adage, “Nobody ever got fired for buying IBM.” And that’s totally OK - not every prospect is going to be comfortable being an early adopter of your product or service.
Early adopters are a special breed so when you find them, treat them like gold. And for those that aren’t quite ready to take a leap on your start-up, make sure to leave things on good terms and let them know that your door is always open. You might be surprised who comes knocking a year or two down the road.
How We Handle Outseta’s Most Common Objections
With these tips under our belt, let’s look at how we’ve applied them to handling the most common objections we’ve heard about Outseta.
Outseta sounds great. But how do I know you’ll stay in business?
This is a classic objection that every start-up company must face. At Outseta we’re asking our customers to trust us with mission critical aspects of their business - their CRM records, their billing system, etc - so this is a very valid concern.
We’ve specifically built our business with painstaking transparency to help alleviate this concern. Everything from our business structure to how we make financial decisions has been designed for longevity. Ultimately, most start-up SaaS companies go out of business for one of two reasons.
They couldn’t find any traction for their idea and were never able to acquire paying customers. After a year or two the founders burn out or lose interest and shut down.
They run out of money - maybe they raised venture capital or angel funding - but their burn rate outpaced revenue growth and unable to make payroll they’re forced to shut their doors.
At Outseta we’ve done everything possible to insulate ourselves from these circumstances. First, our product competes in very mature markets like CRM, subscription billing, and email marketing - these categories represent known, validated needs of the companies we serve. The market for our product already exists.
Second, we have very specifically chosen to bootstrap Outseta and minimize all expenditures related to the business aside from our own time. Our growth is funded by our own revenue by design, rather than by investors. Our founding team is self-sustaining financially, meaning from day one we haven’t been relying on Outseta to pay us the salaries that we need to cover our living expenses.
For most SaaS start-ups salaries are by far their biggest expense - often 50% to 80% of total expenses - so this is a huge advantage and puts us in a scenario where it’s highly unlikely that we’ll go out of business for financial reasons. We’re in this for the long haul!
I’ll be sacrificing some functionality by using Outseta instead of building a tech stack of more specialized software tools. Why would I do that?
Yes, you will be sacrificing some functionality. No doubt. But for an early stage company, that’s actually a very good thing. Hear me out.
Let’s start by look at a report put together by another SaaS company, Blissfully. They’ve built a SaaS product to help you manage all of your different SaaS products, which I raise because their business relies on companies using a slew of specialized software tools. Yet in their Guide To SaaS Management they cite the problems associated with using a slew of SaaS tools as…
Human resources and finance challenges
This list is exactly what start-ups don’t need at an early stage. We all like to buy stuff. We all want more. We all live in a world that celebrates excess where nobody wants to feel like they’re missing out on anything. You want all the bells and whistles, I get it.
But is that what your start-up actually needs? When was the last time you used the seat warmer for the middle seat in the back row of your SUV?
When you piece together your tech stack at an early stage, you end up with a bunch of tools that are only fractionally used. There’s a core function or process that each tool supports and is used for, as well as a whole bunch of excess features that remain untouched. Mailchimp offers over 100 email templates - how many are you actually going to use?
This fractional use phenomenon makes logical sense when you consider what SaaS companies typically do as they grow or take on outside funding.
They build a bunch of new features to help them go “up-market” so they can sell bigger deals to bigger customers. So those extra features aren’t meant for you as a start-up anyways.
They build a bunch of new features to help them move into new markets. So those extra features aren’t really meant for you either.
They build lots of integrations with other complementary tools. You might use a few of them, but most of them won’t pertain to you.
We’re neither going up-market nor building integrations because our software tools have been built together from day one. So are those extra features really doing anything for you other than driving up the price tag? Is the price, integration, maintenance, and aforementioned problems with a slew of more specialized solutions really “worth it,” or do you just want to know that those extra features are there?
Most importantly, whatever software tools you use are ultimately designed to support one of the processes involved in running your company. You need software to manage your sales pipeline. You need software to charge your customers and to help field customer service requests. These are core needs that are undeniable and important to fulfill.
But is it the software you’re using, with all the bells and whistles, that’s going to dictate whether or not your start-up is successful? Absolutely not. The start-up game is about staying alive long enough to win. You need to design and build a product that people actually need. You need sales people who can handle objections. You need to hire a great team.
The bells and whistles of your software products is not what’s holding you back, especially in an early stage company. Having more time to focus on the aspects of your company that really matter is what will dictate your success.
Won’t I outgrow Outseta? What do I do when that happens?
You betcha you will - in fact, we’re hoping you do! We’re not going up-market - we’re here to serve you better than anyone else can now. We’ve seen companies grow from nothing to $5M-$6M in annual revenue using software tools like Outseta - that’s the journey we want to ride along with you for.
Our founding team worked together previously at Buildium, a company that’s made the INC 5000 list of America’s fastest growing private companies 7 consecutive years. You know how long it took Buildium to go from $0 to $5M in annual revenue?
The point is even if everything goes well and you grow fast you’ll be using Outseta for a long time; all the while reaping the benefits of predictable, low financial overhead that companies swimming up-market can’t promise you.
When you do get to that point, we’ll be in your corner high-fiving with you and you’ll also have a major advantage when switching to new software tools…
Because all of Outseta’s tools are fully integrated from the get-go, we have one master database that includes all of your data - every CRM record, billing interaction, email exchange, customer support ticket, or live chat conversation that you’ve had. You own that data, not us, and we can easily export it for you so it’s not lost.
Try doing that when you’re changing from using 5 to 10 different software tools. That’s… well that’s SaaS chaos!