What are sales objections?
Sales objections are the reasons a prospect is unable or unwilling to buy your product. Sales objections can come from budget constraints, lack of need or interest, or red tape from higher-ups. Sales objections can be a sign that your product isn’t a great fit, or they can be a sign that you need to sell your prospect on the product in a different way.
Sales objections can seem like insurmountable barriers, but with the proper response, research, and readiness, it’s possible to overcome them.
How sales objections can harm the bottom line
It isn’t easy selling SaaS, even if you really believe in your product. Often, after finding strong prospects, meeting several times, and negotiating terms, deals still fall through. Common SaaS sales objections see companies losing out on deals, or winning them at a major loss: the average SaaS discount is 17%, and sales cycles are longer than ever, which negatively impacts CAC and CAC payback.
Common sales objections center around price objections, and can trickle down to affect several key metrics. Today, we’ll break down some common sales objections, the reasoning behind them, and how you and your Sales team can respond to them to win deals.
We’ll also share our insights on tools that can help you shorten sales cycles and circumvent some of the most common SaaS price objections. Let’s get your deals closed!
Common SaaS sales objections
It’s on your Sales team to convince a customer that they need your product. It’s also wise to anticipate the types of sales objections that may come up as you enter into negotiations. Customers may raise barriers to closing for many reasons, including:
1. Lack of need
This is the simplest type of objection, and it can be hard to overcome. If you’ve done your research, you know that your prospect needs your product – even if they don’t know it yet. Your job is to show them exactly how your product can help.
Offering a demo or a free tool is a great way to show your prospect how your product could be applied in real-world cases. Walk them through a demo and take note of any key pain points that your product could alleviate, or set them up with a free tool and show them how to integrate it into their daily workflow. If you’ve prospected well, you know they need your product. Help them realize it!
2. Oversight needed
With budgets tighter than ever, purchases and subscriptions often require more cooks in the kitchen. Often, major purchases require CEO or Finance approval that wasn’t standard even five years ago. Your Sales team should be prepared to pitch to all members of your potential customer’s company.
To tackle this objection, preparation is key. Identify key decision makers early on and keep them involved throughout the sales cycle. That way, you can avoid unpleasant surprises when the head of finance is about to approve the deal. To show your value to higher-ups, consider offering extended free trial periods that allow customers to really dig into what your product has to offer.
3. Low urgency
The world of SaaS is fast-paced and ever-changing. Often, common sales objections are the result of simply not having enough time to focus on a new purchase. Streamline your sales flow so you can clearly and concisely pose your value propositions to your prospect.
If your prospect doesn’t have the bandwidth to go through a sales cycle with you, this is a great opportunity to identify exactly how your product could alleviate some of the pressure on them. How does your product save time, money, and energy? What could your prospect’s day look like if they used your platform?
If your prospect simply isn’t feeling urgent about closing the deal, this could be an issue of how you’re positioning value. Listen and learn from your prospect to understand exactly how your product could help, and refine your approach to show them how much better the future could be if they sign on.
4. Budget constraints
Budget constraints can take two forms: lack of perceived value, and actual financial barriers. Prime your Sales team to convey undeniable value to your prospect, and consider offering flexible payment terms that allow you to meet your customers where they’re at, while still collecting full ACV upfront.
Some customers have very little cash on hand, and other customers have the cash, but want to remain liquid for any number of reasons. Discounts are a tried-and-true way to push deals across the finish line, but with the average SaaS discount approaching 20%, closing comes at a steep cost to the vendor.
Buy-now-pay-later platforms can empower your customers to pay you in monthly installments, while also paying you full ACV upfront so you can meet your expenses and work towards growth. Many of these platforms, including Capchase Pay, manage billing and collections on your behalf behind the scenes, so you can focus on more important things.
5. Lack of trust
For early-stage B2B SaaS companies, lack of a proven track record can be of concern. Of course, every company has to start somewhere, but younger companies should anticipate encountering some resistance to closing, as customers may naturally be more cautious.
One way to build a more robust reputation is to work closely with the customers you do have to ensure that Customer Success is meeting their needs. Hold brief interviews with current customers and create customer stories and case studies that can help prove the value of your product. Investing in a strong social media presence can also be an asset, helping you build a network in the community that can bolster your reputation as a company and make potential customers feel more confident about closing with you.
How to overcome common B2B SaaS sales objections
The fastest way to end negotiations is to respond to your prospect’s concerns defensively and reactively. Every potential customer who’s chosen to meet with you has given you the gift of their time and attention, which is essential to respect. And every potential customer has the responsibility to protect their financial and strategic interests. The burden of proof, so to speak, lies with your Sales team.
So how can a Sales team respond to common B2B SaaS sales objections?
Plan ahead
Firstly, put in time to research your qualified prospects so that you can anticipate common sales objections. You may not have insight into their financials, but you can still learn a lot during the discovery process.
The more prepared you are, the stronger your responses will be. As you work with your Sales team throughout the discovery process, ensure that you’re preparing to respond to all members of your prospect’s team: RevOps may have questions about integrations and efficiency. Finance may want ROI numbers and case studies. Founders and CEOs may want a higher-level picture of what you can do for them.
Planning ahead to address common sales objections with all members of a potential customer’s team is key.
Listen and learn
Once an objection is posed, the first step should be to really hear your prospect’s concerns.
- Are you surprised to hear their reservations?
- Have you heard this sales objection before?
- Does their concern reveal anything about their priorities?
Acknowledging that you’ve heard and absorbed their sales objections is an essential part of building the human-to-human relationship that is the foundation of a strong, long-term partnership between a vendor and a customer. Showing a potential customer that you’re willing to listen to their concerns gives them a glimpse into what customer success and a long-term contract with you might look like. It shows your customer that you care about their concerns.
Show that you’re on their side
Empathize with your customer’s sales objections, and share any insight you may have on how other customers have overcome similar objections.
Work together
Collaborate with your customer to find a suitable solution. Here are some quick responses to common sales objections:
- The contract terms are too long.
- Let’s try a different contract length – we offer multiple contract lengths to fit various customer needs.
- I’m not convinced that we’ll get the ROI we need.
- I’d love to walk you through some case studies – are you available this week to talk?
- I’ve never heard of your product.
- We’re a growing company! I’d love to schedule a call to tell you more about how we can help out with your pain points.
- We don’t have the cash to commit to a year-long contract.
- We offer flexible payment terms through Capchase Pay that allow you to pay in monthly installments.
- I can’t approve software purchases without higher-up approval.
- I’m happy to meet with anyone on your team to tell them about how our product can help your company reach its goals.
Finding solutions for B2B SaaS pricing objections
A common solution to pricing objections is to offer an alternative pricing model. If you offer annual subscriptions, consider offering a longer-term subscription for a value price. Some companies offer usage-based or tiered pricing. Every pricing model has its pros and cons.
Another common solution to pricing objections is to offer discounts. Discounts can push deals through, but at an average cost of 17%, which impacts the bottom line, as well as several other key metrics. While it’s easy to rely on discounts, they can also send the wrong message, especially if your customer has concerns about the true value of your product. If you’re quick to offer discounts, you may have customers wondering why you priced your product so high in the first place.
Budget-based price objections
There are many reasons why a customer would be unable to pay for an annual contract in one lump sum. Many companies simply don’t have the cash on hand. Other companies prefer to stay liquid in the short-term in order to remain nimble and fund key operational, developmental, and marketing expenses.
Overcoming common SaaS sales objections and pricing objections with flexible payment terms
Offering flexible payment terms allows your customers to pay for your product in monthly installments, making it more accessible to customers with budget constraints. You customers may want to keep more cash on hand – and so may you. With a partner like Capchase Pay, you can offer customers flexible payment terms while also getting paid full ACV upfront, so you have the capital you need to power growth.
Flexible payment terms allow you to close faster, lowering CAC and shortening CAC payback time. Perhaps more importantly, flexible payment terms allow your Sales team to close higher and move away from relying on discounts. Plus, flexible payment terms encourage renewals, cross-sells, and upsells, as your customers pay in manageable monthly payments. Flexible payment terms can be helpful even for companies that can afford upfront payment.
Overcome the most common sales objections and pricing objections with flexible payments through Capchase Pay. Learn more today.
