Some SaaS salespeople are going to hate me for what I’m about to say:
Almost every SaaS salesperson will give you some discount if you know how to ask.
I’ve been selling enterprise SaaS for 10 years and have offered 12 different discounts over that time (I’ve compiled the list below).
A few of the tips below are “Captain Obvious” (sorry, but I’ve learned that some buyers don’t know them). For you more astute buyers, I think you’ll find a couple of new ideas on how to work a discount.
Note: Special thanks to the smart and entertaining William Tincup. He motivated me to share the tips on his podcast episode: Ongig – 12 Ways to Get a Discount from Me with Rob Kelly (airing May 20, 2021). That podcast has more texture on the 12 tips below and is probably more fun since we also chat about the Grateful Dead, Phish, taking mushrooms and my old school chum Todd Stanley (now Workday’s new VP of Marketing!).
One last thing: the tips below are for getting an enterprise software discount from a salesperson (as opposed to buying a consumer SaaS solution (i.e. via a checkout/shopping cart). I don’t know anything about consumer SaaS.
Here are the tips — enjoy!
- Write a bigger check — SaaS solution providers want as big a $ commitment as possible. It helps with investors, team morale and cash flow. The bigger the check you write, the bigger the discount. With your bigger check will come cheaper per-product/per-user, etc. pricing. One way to write a bigger check to some SaaS companies is to buy more than one product (e.g. here at Ongig, we have 3 solutions). Another way to write a bigger check is to….
- Commit to a longer-term — A 3-year term for SaaS gets better pricing than a 2-year term which gets better pricing than a 1-year term, etc. A 5-year term gets you an even better rate! 🙂 This saves us time from working on renewals.
- Close quickly — Time really IS money. If you close quickly, that saves our team meeting time and we’re glad to reward you with a discount. If you were to come to my sales team and come to terms after 1 or 2 meetings, you’ve earned the right to ask for a better deal than a buyer who requires 20 meetings.
- “Buzzer-Beater”/”Clutch Client” — We usually give you a discount on our SaaS if you can close a deal right before the end of the month or quarter or year. The reason is that you are likely helping us meet or beat our monthly/quarterly/yearly goals. We sometimes call this the “Buzzer Beater” or “Clutch Client” Award since you came through for us at the end of the game and helped us win!
- Prepay — Prepaying the first year generally gets a 4 to 8 percentage point discount (versus paying us monthly). This is based on where interest rates are cash-flow wise but prepayment is ALWAYS better than us having to wait for payment. You agreeing to send us money at the start of the relationship gives us confidence that you are indeed a great client. Most vendors who have been around any period of time have nightmare stories of clients who took a year or 2 to pay them!
- Give up a competitor’s solution — A client called me the other day to see if I could beat one of our main competitor’s (Textio’s) pricing. We were happy to give them the discount and won the client. Converting a competitor’s client to us both makes us feel great and is usually a quicker close because that client knows more than the average prospect.
- Be a “Boomerang Client” — If you were previously a client of ours, we reward you for coming back. We call that a “boomerange client”. Take Andrew Carges. He was the head of Talent Acquisition at GoDaddy (an Ongig client). When Andrew moved over to Elastic NV, he became an Ongig client for the second time (and got one of the biggest SaaS annual price discounts I’ve ever given.
- Referral — If you refer us to a person that leads to a meeting, we’ll give you a discount. I’m amazed how few buyers offer/ask for this.
- Provide a Case Study or Logo — If you let us use your company as a testimonial, logo, case study, etc., we’ll gladly give you a “marketing discount”. William Tincup brought up that buyers can also offer to write a review on a product comparison site (e.g. G2.com) to get a discount. Great idea — I hadn’t thought of that!
- You’re a do-good non-profit (and cool) — If the Mother Teresas or Nelson Mandelas of the world, who aren’t in it to make money, want to use our SaaS software, we’ll figure out how to make the money work! This can’t be any non-profit. Some non-profits have bad reputations or overpay their leadership. But if we’re feeling the warm and fuzzies about your non-profit, we’re going to do what we can to help you afford our SaaS software. William Tincup tells me that Cornerstone OnDemand does a good job giving discounts to non-profits.
- A New Vertical Market — If you help us get into a new market, we’ll give you a discount. For example, we gave a nice discount to a healthcare company because we wanted to enter this vertical, and having proof of concept was extra valuable.
- Help me learn — If you are doing something unique or have a large volume of something, that often translates to my team/Ongig learning how to build a better product and that’s worth a discount. For example, we had a giant theme park company approach us about a professional services project. We ended up quoting them about $30,000 because we knew we’d learn so much (we got exposure to about 30 members of their team). That project ended up being the genesis for an entirely new software solution (Ongig’s Text Analyzer) which is now a multi-million SaaS software business. And Jason@ a large healthcare company taught me new things about job titles so he earned a huge discount. We love giving a $ discount for learning!
What about “Sharpening the Pencil?”
William Tincup asked me what I do when a prospect asks me to “sharpen your pencil” (i.e. provide price point breaks). My answer is that I copy and paste the 12 tips above and send it to them. Then, I emphasize that I’ll gladly give them one final discounted quote but that’ll be the best final offer. In my experience, it’s usually a bad deal if the prospect and I are nickel-and-diming back and forth.
Why I wrote this?
Here at Ongig, we believe that if we know something potentially valuable to others (e.g. info on discounts!), then we should share it. If you’d like to find out more about Ongig’s solutions (our SaaS software eliminates boring and biased job descriptions), please reach out through the demo request form at Ongig. Or, if you have other ideas on SaaS software discounts, please comment below. I’ll review and add them to the list. And thanks!