Enterprise software is expensive, and buying anything expensive carries an emotional component. As a result, most enterprise software buyers ultimately make their decisions based upon narratives - stories you tell yourself to give you confidence in a decision. I’ll be a hero if I choose the right tool. My bottom line will benefit if we’re using the best platform. I’ll get promoted if I can increase topline revenue.
As a product leader, you can accelerate your company’s sales growth by steering development in ways that reinforce the central narrative of your product. There are four common narratives that drive a buyer’s decision to open up their wallet. Let’s go through each, explain what they are, and discuss what you can do to harness them.
Productivity Software: This will make us more efficient
Some products are sold off the promise of making teams more productive. Examples include bottoms-up SaaS products like Asana or Notion, all the way up to expensive offerings such as Looker or Datadog. The fundamental promise of these products is that your team will increase its output : effort ratio.
Productivity increases are hard to prove until you have empirical evidence. You might think that your fancy new Jetbrains IDE is going to improve efficiency, but it’s hard to prove this value quantitatively (you can’t just measure lines of code). So the best way to harness a productivity narrative is to get your product into your buyer’s hands. If your product’s central narrative is efficiency gains, make sure that it’s easy to onboard and easy to try. This strategy works; even very expensive products like Datadog will let you get started for free. Immediately getting into a user’s hands also gives you more leverage if your product can actually surprise and delight with novel pieces of functionality or interaction design.
Productivity software is also easier to sell to expensive teams. Developer productivity tools have proven highly successful, because engineers:
- Can do their own installation
- Care a ton about productivity
- Are such a pain in the ass to hire that you need them to be as productive as possible
Great developer tools create a strong narrative of “this will make the very expensive developers more productive with little effort” justifying the wild growth and high prices of products like Datadog or Snowflake. If you’re building a very horizontal product like Asana or Monday.com, it’s probably going to be easier to sell it to teams that are expensive to run.
Essential Software: This will keep me from getting fired
There are some things that businesses just have to do. Running payroll. Invoicing customers. Managing customer signatures. These jobs aren’t sexy, but someone has to do them. Finance, HR, and Security software often fall into this category.
Buyers of this type of essential software care about not screwing up something important, so your core experience must be excellent and extremely hard to screw up. Essential software should be like a stroller or an AK47 – an untrained, stressed out user should be able to operate it under duress. Bells & whistles are great, but these products really need to nail the core workflows. These spaces tend to be won by great execution rather than creativity.
Additionally, you want to make sure that your product is as comprehensive as possible. Buyers facing an essential problem can’t afford to only solve half of it. A product like Workday encompasses huge amounts of expense management software, and sells like crazy despite being user hostile and boring. But if it only solved half of the problem – say, if you couldn’t use it to manage PTO – its aggregate value would be way less because buyers would need to make an additional purchase.
Money Savers: This will save a bunch of money
When buyers are looking for products to save them money, they are typically looking for a cold accounting of cost (purchase price + any variable prices + time cost) vs. expected dollars saved. Examples include products such as Fastly or Zendesk. Companies have known needs around content delivery and support, and these money savers allow them to optimize these costs more efficiently.
The best way to sell a money-saver product is to drive your product to reduce cost in a provable way. Buyers will want to coldly quantify the cost savings that you’re affording them, so you should give them the tools to run these calculations efficiently (or at minimum enable your account management / customer success teams to do the math for them).
- Provide excellent transparency around what you cost
- Provide excellent transparency around what you’re saving. For example, we delivered 5 terabytes of content for you, or we allowed you to service 5,000 helpdesk requests in a quarter rather than 4,250.
Perhaps counterintuitively, some of the most important features for money-saving products center around reporting. Mature organizations can turn these reports into quantifiable cost savings, helping them justify your cost at renewal.
The best money-saver products also get more efficient the more embedded they are in an organization. For example, a product such as Zendesk becomes more useful as a company trains its team to use it efficiently and invests in integrations. Your competition, other cost-savers, are going to sell against you by making themselves seem cheaper than you, and with advantages that compound over time you’ll come out ahead in a potential cost/benefit analysis.
Money Makers: This will make a bunch of money
Some lucky products are geared towards making money. The narrative of helping your buyer make a bunch of money is a great one, because it’s the best way to make sure that your champion gets a fast raise or a fat bonus. This is why many products in the sales efficiency or marketing space sell so well (Gong, Mailchimp, Facebook Ads) – they can be absolute faucets of cash. It’s easy to draw a direct line from your sales team spending 10% less time qualifying or generating 15% more leads.
The market gives outsized rewards to high growth, and making money is exciting because there is no amount of money cost cutting that will create hypergrowth. Money-saver products drive practical minivans and are in bed by 10 with a warm glass of milk; money-_maker_ products listen to loud music and drink expensive vodka in the back of a limo.
The best way to harness this powerful narrative is to rebaseline your buyer’s revenue. Put simply, if your buyer was previously generating $10M / year in revenue and now generate $12M, you’ve rebaselined the expectations and financial projections of their entire company in terms. Good luck convincing someone to churn at this point; these customers will fight to keep you installed. An even more beautiful part of rebaselining revenue is that most businesses track their revenues even better than their costs, so you don’t necessarily need to do that great a job of reporting the money that you’re making
To rebaseline a customer’s revenue:
- Find a place where your product can definitively expand your customer’s revenue
- Double down on this use-case, polishing all of the corners of it to streamline the revenue creation stream. The key here is focus –
- Generate use-cases and testimonials that reinforce the value – help new prospective buyers
- Rinse, and repeat: find more use-cases that expand revenue, or deepen existing revenue-enhancing functionality.
You can see this plan in action with a product like Mailchimp. Mailchimp realized that newsletters were strong revenue channels, and poured significant effort into making sure that their offering here was amazing. This drove word of mouth and social proof, allowing them to expand. They then used this growth to expand to adjacent areas – social, landing pages, and transactional messages – allowing them to establish a revenue enhancing flywheel. For each of these new use-cases, you’ve increased your customer’s expectations, making your product successively stickier. Your buyer can only ever replace you with a product that meets or exceeds all current use-cases – their business projections assume it!
This last step is key, and why some revenue-expanding products can be so valuable – they scale forever. The beauty of revenue expansion is that it can go forever – you can only drive costs to $0 and productivity has diminishing returns, but revenue generation is forever.
Takeaways
We hope that this breakdown of common product narratives has been helpful. The key is to know and focus on the central narrative of your product – don’t get distracted by what works for a different core story. Happy building and selling!