
This email may be worth millions of dollars in sales - guiseppecalzone
http://josephwalla.com/this-email-may-be-worth-millions-of-dollars-in-sales
======
cpncrunch
I do this all the time, and it always works. Just today someone asked for a
discount, and I wrote a similar email to this one, explaining why we don't
give discounts, our products are great value, etc. I did offer them an extra 1
month trial for free, as they were just starting a new business, and they were
very happy with that and will probably become a long-term customer.

I think people are just programmed to ask for discounts. However unless there
is another product which gives them all the features they want for a lower
price, they will almost certainly buy your product even if you don't give them
a discount (as long as you're nice about it). The only time I would give a
discount is if the person genuinely can't afford it, but that very rarely
happens (as my prices are pretty reasonable).

~~~
fijal
I would like to swap "people" in your sentence for "americans". It's a
cultural thing, not a human thing.

~~~
simplemts
Seriously? Bargaining, or discounts, in this example is very, very common all
over the world. I have found Americans do less of it than in most parts of the
world, such as China, Turkey, Thailand, Morocco, etc.

~~~
dspillett
I've assumed that my experience is accurate and that it is more common in
rural areas (where ad-hoc/informal barter systems still prevail) and poor
areas that see significant numbers of (relatively) richer visitors (i.e.
tourists).

In the latter case the price starts high (to catch the people who will just
pay anyway) then the price goes down, or there is a bait & switch (the bargain
item advertised in the window is sold out, could we interest you in this
instead?), or both. Perhaps the poster above is conflating "loud, brash,
confident tourists bargaining" with "American tourists" \- a pair of
populations that certainly do intersect though not as much as commonly held
stereotypes would suggest.

------
nly
Seem like pretty vanilla sales tactics to me. Even if choosing the more
expensive company was the better investment, this is just rationalisation.

Some really good tips (I thought) for selling at a higher price than your
competition: [http://everyonenegotiates.com/selling-high-
price.php](http://everyonenegotiates.com/selling-high-price.php)

------
duckingtest
You should also write to the cheaper company. Or was the lesson supposed to be
that writing meaningless platitudes like 'race to the bottom' is good
marketing? Perhaps it is, but personally, I would feel insulted.

There's no worse assumption that cheaper product is worse, especially when it
comes to SaaS. What if FooCorp has automated much more than Acme, and even
with lower prices actually has both better profits per sale and better
functionality?

Sure, FooCorp should work on their marketing, but that's in their interest,
not yours. A perfect company from the customer's PoV is one that is almost
unknown, provides the best value per money unit, and has just enough customers
to be alive. Then you have a competitive advantage over competition using
popular and expensive solutions.

~~~
FooBarWidget
"Just enough customers to be alive"? Would you really trust a SaaS that is
about to lose money and go bankrupt at any time?

Furthermore, if the company has just enough customers to be alive then there's
a pretty big chance that their founders or employees are working over time in
order to keep costs low. They might get sick any time, making the company fall
over. Not a sustainable situation. Would you really trust your data with that?

~~~
duckingtest
>Would you really trust a SaaS that is about to lose money and go bankrupt at
any time?

I meant a company that has just a bit more profit and revenue than that.
Perhaps I should have written that in some other way.

------
TeMPOraL
If I got an e-mail like this, I'd most likely go with the competitor.

> _The FooCorps 's of the world have spent a couple decades now in a the race
> to the bottom and it shows. I have no doubt you can get their product (or a
> whole raft of others) for a few bucks cheaper than us._

AKA. "Our competition suck and it shows."

> _Our product, Acme, is different._

Of course.

> _Look, FooCorp 's customers are switching to Acme in droves because we're
> investing heavily in great customer service and innovation._

Yeah? I'd like to see data that supports it. This is one of the most common
blatant lies in marketing (sure, it is true for some specific values of
_customers_ , _switching_ and _in droves_ ) and I see no reason to trust it at
face value; the sole inclusion of this sentence feels like evidence against
company quality.

The same e-mail could be sent by FooCorp or any other competitor in that
space. There's no Acme-product-specific information here, just universal
marketing slogans.

~~~
hywel
It sounds like you don't like that the email is part of the company's
marketing. But wouldn't it be crazy if they sent such an email without making
it part of their marketing?

Also, there is differentiation, and explanation of why that's valuable. "We're
designed to help improve your'e company's performance in the critical area of
XYZ. The ROI on doing that is enormous."

Yes, any competitor could have sent such an email outlining their USP /
positioning. But most of them won't, and that's what makes this an excellent
example.

~~~
TeMPOraL
No, I get that the e-mail is part of company's marketing. But I don't like
that marketing. The e-mail is pretty much empty of content.

> _Yes, any competitor could have sent such an email outlining their USP /
> positioning. But most of them won't, and that's what makes this an excellent
> example._

Sure. The act of sending that e-mail is a plus for the company. Still, you
could replace their company name with any of their competitors and get an
equally valid e-mail - which suggests that there isn't much more than
buzzwords in it.

------
stevewepay
Sales 101 is being able to take the conversation away from "price" and change
it to "value". 20 years ago, my friend was selling IBM desktops and servers to
educational institutes and I learned this from him. There was no way IBM could
compete against the prices of those small computer stores, so he had to
actively show how buying IBM would save money over the long run, etc. He was a
very good salesman so it worked pretty well.

~~~
Kurtz79
And yet, eventually IBM pulled out of the consumer PC business.

~~~
exelius
That was a proactive move that turned out quite well for them. They saw that
the consumer PC business was going to shrink significantly over the next 10
years, so they sold off while the price was still high.

I don't think anyone in their right mind is second guessing IBM's decision to
get out of the PC business. In hindsight, it was a great move executed with
perfect timing.

~~~
Kurtz79
Completely agree.

But they took this decision because they saw that the superior quality of
their product(which having owned older Thinkpads I can say it's true) wasn't
profitable enough when competing with lower cost "good enough" alternatives.

~~~
exelius
IBM's core strategy is one of technological differentiation through R&D; not
price leadership. It's absolutely part of that strategy to exit commoditizing
markets (which is why they got out of x86 servers as well) where product
differentiation is difficult.

------
alttab
This blog post may have been worth millions of dollars in sales for Acme if we
knew the actual context.

Acme has chosen to provide a better value prop. They use this to justify their
additional cost 100 times a day. The CEO noted that the value prop was
subjective (does your company value XYZ?), and simply justified the gap. It's
not magic, its logic.

~~~
guiseppecalzone
Would have loved to give the name, but the founder asked not to be named.
Sorry about that. It was his email, so I deferred to his judgement.

~~~
click170
Thank you for respecting their choice, though I'm concerned they've done
themselves a disservice somewhat by missing out on free publicity, especially
for something as glowing as this.

If the author of that email reads this I do hope you claim ownership so that I
can reward your company with my patronage.

~~~
treehau5
Maybe Acme is afraid of exploding into too much volume, and not being able to
provide that aforementioned exceptional customer service.

Maybe they just choose to be humble and let their actions do the talking!

Either way, this to me is speaking volumes to the type of company this is, but
I do share your desire to know what the name of the company is.

~~~
stangeek
Or maybe Acme is afraid that FooCorp will refute their argument about a so-
called "race to the bottom"... Maybe, just maybe, Acme is lying about
"customers [...] switching to Acme in droves "...

I am not really impressed when a potential supplier is bad mouthing
competition to get ahead of the pack. I would have a hard time trusting them,
and being confident that at some stage they wouldn't bad mouth my company if I
was no longer a client for XYZ reason later on....

------
drdaeman
Maybe this is due to lack of context, but with all that "designed to improve
your company performance in the critical area" and "investing heavily in great
customer service and innovation" that email sounds terribly enterpriesey to
me. It all could be boiled down to a one-liner in spirit of "Sorry, but we
can't offer our services any cheaper. Our prices are indeed higher, but the
services are better than competitors and we actually provide more value per
price unit. Please, take this into consideration."

And maybe that's just my tastes, but negative commenting on competitors with
all that "race to the bottom" and "customers are switching in droves" stuff
doesn't sound any good to me. Even if competitor is really a complete shit.

Just my opinion. I'm not a businessman.

~~~
exelius
> Just my opinion. I'm not a businessman.

It shows :) No offense, but this is an engineer's mindset. Great for building
products; terrible for selling them.

A businessperson's mindset is "if they don't understand their value
proposition well enough to explain it to me, their product likely isn't any
better than the competition and they know it." Better still, by explaining
your value proposition in terms of a prospective client's problems, you are
showing them that 1) you understand their problems 2) your product addresses
their problems and 3) that you are committed to a long-term, mutually
beneficial business relationship, not just a sale.

OP's link is a great example of good business communication. It's obvious that
many of the flaws are due to the anonymization; I've written these e-mails
before and the main goal is building a business relationship based on trust.
If you have built a relationship with your customer, you get a little bit of
leeway to badmouth the competition if it's relevant.

~~~
derefr
> A businessperson's mindset is "if they don't understand their value
> proposition well enough to explain it to me, their product likely isn't any
> better than the competition and they know it."

You'd think a consequentialist businessman would be _more_ interested in
buying good things that go unrecognized/undervalued/un-understood by those who
have them for sale. He can use the information asymmetry to make a profit,
after all.

~~~
exelius
Maybe if you're buying widgets, but not services. Just like you may be ok with
buying a car from a person who doesn't understand the value of his product,
but would be more leery of hiring an accountant who didn't understand the
value of his services. SaaS solutions are truly a service in this regard.

~~~
derefr
I guess I'm thinking of things like "Internet companies who don't realize that
they're providing SLA-ed synchronous links with their IP video-conferencing
service." They're selling you one thing, but you're getting most of the
benefit from a part of it they don't even realize is worth anything.

------
mattmanser
I've worked in enterprise SASS, salesman know not a lot about their own
product, ROIs are plucked from asses and often it's all fibs.

Bear in mind I thought our sales guys were great, our product pretty good vs
the field.

But basing your purchase on an email like this?

You're a complete sucker. All that happened was that a salesman just called
their bluff. And they were impressed by it!

~~~
UrMomReadsHN
A good salesman will get you to take a bad or mediocre deal while at the same
time convincing you you've gotten a great deal. Always question "facts" thrown
out by someone trying to sell you something.

"instead of doing a price cut, it may be worth explaining why your product is
worth more." This is news?

------
georgemcbay
Terrible grammar aside, I don't get it. Perhaps due to the lack of context and
purposeful obfuscation for the blog post.

If you've already evaluated both offerings and found Acme's to be
significantly better independently then this sort of works as a justification
for the higher price, but I don't see the part where it shows it is any better
than FooCorp's thing. Yeah, sure, a bad transaction will cost you money... how
do I know FooCorp's thing is more or less likely to generate a bad
transaction?

Out of context it reads like "if brand X fails you'll be in deep shit, and
we're not brand X, so buy our thing which costs more than brand X's thing".

Who says brand X fails more often than brand Y? Maybe it does, maybe it
doesn't, but the logic train bumped off the rails a bit in the middle for me.

------
juiyout
A common technique when challenged with lower quote. If OP humors us with the
actual context, then it might get more interesting.

------
mcv
Great mail, but the line "...is one of the most leveraged investments you can
make" makes my skin itch.

------
callesgg
Well that is what everyone says. The thing is that more money does not equal
more value.

In "IT" I find that it is actually more common for the best product to be the
ones that are in the mid price ranges. Not counting open source stuff ofc.

~~~
dijit
yes, but sometimes things cost money.

for a technical example think of a CDN.

sure you can go with Fast.ly and get a pretty ok CDN which is mostly automated
and pretty cheap, or cloudflare which is similar. but they leverage systems
controlled by other people a little too much, as such they can't be held
accountable for networking fuck ups.

usually costs are human time related, good customer service means paying your
helpdesk staff a living wage and retaining charismatic and talented
communicators, rather than running them through a sweatshop and having a high
turnover.

------
josefresco
The only fly in this sales-technique ointment are the customers whom you
convince, then in-turn expect the world from you because they chose "value"
over "price". When customers pay a premium, their expectations are much
higher, and unhappiness can set in if you don't manage these well.

This might not be something sales can control, but be careful in the claims
you make during the sales process as some customers are listening and will be
holding you to your promises.

------
nraynaud
I love it, pure business speak ans number from the hat, zero technical
details. Use it when the buyer is boss of the buyer.

When the user pays, send screen caps and detailed explanations.

------
nyar
"We're designed to help improve your'e company's performance in the critical
area of XYZ."

\- your'e

\- company's

If it is worth millions of dollars do a spellcheck.

~~~
gknoy
You're right that taking the time to proofread and grammar/spell check is
good, but in this particular case the performance is that of your company.
Thus, "company's" is correct. :-)

The other is probably a typo, which might lend authenticity to it having been
actually typed out by the CEO, rather than pasted from an archive.

~~~
guiseppecalzone
I've heard that misspellings can actually improve the response rate. I'd
believe that - felt more personal to me.

------
fnatalie21
Lots of companies pay a premium for receiving the 'best'.

He should put whatever in his email in his normal pitch(website, or whatever),
instead of trying to compete against the bottom dwellers of the world

~~~
alttab
I suppose if the marketing was 100% effective they wouldn't have to answer
pre-customer e-mails like this. That said, its always good PR to have the CEO
go out and "bump" a typical customer scenario who is almost to the purchase
choice.

------
MattBearman
I've never had anyone ask for discount for my SaaS (BugMuncher), nor has
anyone ever complained about the pricing. Should I take this as a sign to put
my prices up?

~~~
hyperliner
Careful there. Read about Netflix:

[http://www.forbes.com/sites/theyec/2011/12/28/5-business-
les...](http://www.forbes.com/sites/theyec/2011/12/28/5-business-lessons-from-
the-netflix-pricing-debacle/)

~~~
MattBearman
I've just skimmed that article, but I seem to remember Netflix attempted to
force the price hike on current users. I would always grandfather existing
users, keeping them at their current price. Hell, I've still got people paying
just $10 / month from when I first launched.

------
robomartin
This thread is really interesting. You can see a bunch of engineering types
doing their best to slice and dice this from a million logical angles. I would
have done the same 20 years ago when I launched my product and went out there
to sell it.

The difference? I was honest enough to recognize I was going to approach sales
as an engineer. I got help in the form of experienced non-engineer sales
people tutoring me by going on sales calls with me and doing review sessions
after every sales call.

The first two quarters sucked. It took me about three months to truly stop
thinking as an engineer and another three to optimize my style, delivery and
approach. We closed the third quarter with over $600K in sales, most of which
I was responsible for.

I would eventually hire sales and marketing people so I could devote more time
to engineering. I felt it was important to understand the sales process by
becoming a sales and marketing person myself (for about two years on and off)
before staffing thise positions. I have always been glad I took that approach.
We engineers are great about building products but absolutely suck at selling.

The letter that is the subject of this thread isn't fantastic. That said, it
achieved several things all the engineers on HN are ignoring:

\- Made a sale! Do not underestimate the importance and power of cash in the
bank!

\- It deprived a competitor of revenue. Every dollar you take away from your
competition is a dollar that goes towards potentially taking them out of the
race, particularly with low price sellers.

\- It was compelling enough to take someone who was on the fence and flip him
to the point of having him write a blog post about the experience

\- It probably created a long term believer and evangelist for their brand,
product and price model

\- It confirmed that this tactic works. They can use it with new potential
customers, evolve and fine tune it. They might also consider integrating
aspects of this message in other marketing efforts.

\- It revealed that the competitor's low price position is tenuous at best

\- It started a relationship with a new customer in a very positive tone. If
nurtured this could lead to more sales from word of mouth

\- Because of some of the above their cost of customer aquisition is likely to
reduce over time

I could probably add to this. The point is that most of the criticism here is
misplaced. This letter isn't genius. It doesn't have to be. It only has to be
effective. That, it is.

I don't expect everyone to get this. In typical engineer/HN fashion this will
be sliced, diced and down-voted from a million of irrelevant angles. That's
OK. I get it. The interesting thing is, regardless of what is said here, that
letter still made a sale and accomplished all I have highlighted and more.

------
hyperliner
The best sign I have seen related to this topic is from my mechanic shop:

"If you think a good mechanic is expensive, try a bad one!"

------
bpm140
"You're product/service seems expensive."

"As compared to what?"

Sales 101.

------
iandanforth
The cognitive dissonance here is striking, "the difference in price is
peanuts" vs. "I won't lower my price."

How exactly did you find this compelling again?

~~~
aaronem
"Peanuts" in terms of value to the customer, but not in terms of value to the
service provider. There's more than one perspective here.

------
gk1
One day Pablo Picasso was sketching on a park bench. A woman recognized him as
the famous artist, and asked him for a portrait sketch. Picasso flipped to a
blank page, looked at the woman for a moment, and with a few strokes of the
pencil drew her abstract portrait.

The woman looks at the drawing and is ecstatic. As she reaches for it, she
asks how much it will cost her. "Five thousand," he says. "Five thousand?! But
that drawing took you less than a minute!" Picasso replies, "No, madame, it
took a lifetime."

* * *

The point being: The email is worth nothing; the value is in the person
writing the email, and their knowing what to say.

------
notastartup
I think I might need to raise prices after reading this.

