Closing Customers: It’s NOT Just About The Price of Your Product

“Closing Customers” By Poornima Vijayashanker

This is an excerpt on closing customers from taken from my book: How to Transform Your Ideas into Software Products

In 2005 I was buying my first car ever. It was one year after I graduated from college, so I was on a really tight budget. I thought about buying a used car, but it turns out the interest rate for financing a used car is much higher than the one available for a brand new one. I continued to do research and ultimately came up with a price ceiling of $15,000. However, I knew that the cost of ownership would actually include monthly payments for the car, insurance, gas, and occasional tuneups. So in the end, I’d probably be paying slightly more overall — something like $17,000. And then there’s the issue of a car being a depreciating asset … I’d just have to deal with that.

It took me about a month to figure out what I’d be willing to pay. Once I set my price ceiling, I was on the hunt for a dealer who would meet this figure or come as close to it as possible.

I happened to stumble upon the one car salesman who wanted to go out of his way to ensure that I had a really good experience. He picked me up from work around 5pm and took me to the dealership. We did the usual: picked out a color, model, and then went for a test drive.

Once we were done with the test drive, I thanked him for his time and said I’d need to think it over. But of course, being the awesome car salesman he was, he wouldn’t let me go without completing the sale. He said, “This car won’t be available tomorrow… If you want it, you’ll need to buy it tonight.”

I didn’t want to appear too desperate, and I told him, “Make it $15,000 and you’ve got a deal.” At this point, I had laid all my cards out on the table, and figured that I was probably making some newbie negotiator faux pas.

He said, “DEAL!”

Whew.

The salesman thought I was pretty quick to make a decision. But what he didn’t know is that I had spent months of researching figuring out what I wanted and the price I was willing to pay. This is the first step to closing customers.

It seemed almost instantaneous to him, and he thought it was just about finding the right price to complete the sale.

He’s not alone in this kind of thinking, many people get really bogged down by thinking about how much they’ll charge and forget that the price point they set will also affect the amount of time a prospective customer takes to make a purchase!

This is what I like to call buy time. Think about it this way: how much time does it take you to decide to buy a pack of gum? Probably around 60 seconds, and most of that time is probably spent picking out a flavor, and not spent asking yourself, “Do I want gum?” But when it comes to things like buying a plane ticket, you shop around. Or, if it’s a big-ticket item like a car, you do research. You do this to find the product that is going to fit your needs and to avoid buyer’s remorse.

Hence, it’s not enough to just price your product; you also need to understand the buy time, the behaviors that surround it, and make sure your product’s pricing addresses each of those behaviors.

You can, of course, reduce the buy time with 3 things: scarcity, urgency, and exclusivity. But once again, you’ll need to make sure your customers are aware of those factors as it relates to your product.

Why does it take customers so long to make a decision?

If you are a new company with a new product then it takes time to gain a prospective customer’s trust. After all they see purchasing your product as a potential risk. This is why so many people flock to trusted brands: they know what they are getting and what the experience will be like.

But since you’re the new company on the block, people will be more concerned, and depending on the price of the product it might take customers even longer to make a decision!

There are also concerns like cost of ownership and maintenance, which a conscious customer will inevitably consider.

And don’t think that just slapping FREE on your product will get people to come flocking to you. Conscious customers see that as a sign of a shoddy product! They want to pay for value and quality.

How can you reduce buy time?

You can reduce the decision making time frame with the following:

1. Clear customer testimonials. I’m not talking about someone’s headshot with a quote. You need to take it one step further and include who they are, where they’re from, and a brief summary of their persona. The quote you use also needs to clearly convey the problem they experienced before they used your product, and how you product/experience with your company was amazing. This can initially just be teaser on your landing page, but then you need to include a link to a longer case study. The longer case study will provide more context. The case study is creating a connection. The prospective customer is looking to connect with someone. When they see that you’ve already service a customer like them, it provides validation. Its tantamount to word of mouth from a close friend.
2. Social proof. In the form of well-known and established companies you’ve partnered with that people trust or press mentions, once again from reputable publications.
3. Educate prospective customers endlessly. Most people think just putting up a compelling landing page will convert customers instantaneously, and if they don’t pay up then those customers are worthless. But a landing page is the starting point. It’s your window display: a mere teaser. You will need to do more to educate your prospective customer on the type of product you are selling, and how it benefits them. And they need to hear it over and over again, not just once when they visit your site for the first time!
4. Understand a prospective customers holdups and objections. You need to start the conversation by asking them what their concerns are, and understand where they are originating from. Unfortunately, too many people just dig right in and start selling. This is off putting to most conscious customers. It seems like you’re just pushing product, and don’t care if it’s not the right fit. Keep in mind that customers will have a slew of questions running through their minds. You need to sit back and let them ask you questions like: “How much time does it take to set it up? What do I need to get setup quickly? Whom do I contact if I need help? How will this replace the current XYZ products I’m using today?”

If you don’t know what your customers buy time is, then it’s time to figure that out! You’ll want to start exploring through conversations. Don’t just send them an email saying: “I saw you signed up, please contact us if you have any questions.” That won’t get anyone to respond. You’ve got to make it compelling and specific. Start with something like:

Hi there,

Thanks for signing up yesterday! Just out of curiosity, how did you hear about us?

Now that you’ve had a chance to play with the product, can you tell me what are 1–2 concerns you have about our product?

Kindly,

Poornima

Framing the email this way will start the conversation demonstrates that you’re not, rather than think you’re going in for a sale. In order to track signups, know when they signed up, and what they’ve already done in your product, you’ll need to setup Mixpanel or KISSMetrics.

A lot of people feel like sending out this email and customizing it is creepy. You’ll need to get over that! There is nothing creepy about sending a polite and targeted message. A majority of prospective customers feel that it’s thoughtful.

Now it’s your turn to learn what your customer’s buy time is!

Try the above exercise out on closing customers, and let me know how it goes in the comments below.

Learn more about the process for building, shipping, and selling software products in How to Transform Ideas into Software Products. It will give you a step-by-step process for validating your ideas and bringing them to life, plus save you the agony of having to learn it all on your own! Check out the guide here.

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