BUSINESS STRATEGY they can be more efficient and cut costs . If they can lock in a product they already use and are happy at a price that won ’ t increase , why wouldn ’ t they ?
New clients will help you maintain price growth
From our own point of view , we are able to lock in prices because , as a SaaS company , we have a lean , resource-light business model which enables us to operate in a very costeffective way .
So we know we can guarantee price stability – plus , we are also continually adding to our new customer base , and as with all businesses , our price list evolves and increases . It means we ’ re able to maintain our gross margin .
If there ’ s a downside to multi-year contracts , it could be that they may take you longer to close the deal . You have to communicate a much higher number to the client , and they might have to trigger a different signoff process because the volume is going up .
THIS SHOWS THE CLIENT THAT WE HAVE FULL TRUST IN OUR PRODUCT AND THAT WE ARE ALSO RESPECTING OUR RELATIONSHIP WITH THEM . in a dream world . If you ’ re in a competitive market , some clients will expect a discount before signing a multi-year deal .
So , it could increase your deal cycle – but I think the benefits outweigh the costs . In fact , if you have trust in your sales force and your product , I think it ’ s a calculated risk that every B2B firm should take . x
But if the account executive is doing a great job and selling all of the benefits of the product – plus the price stability – you might not need that to get the deal through .
The multi-year deal switch , step 4 – try and convert your existing 12-month clients into 60-month clients when the contract is up for renewal
Up until recently , almost all of our deal sizes were for 12 months . What we ’ re finding now is that when 12-month deals are coming up for renewal , clients are taking the opportunity to lock in their contracts for 36 – 60 months . It means they have price stability , which is really important when companies are looking at ways
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