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TODAY’S STORY
22 Apr
,
2022

Growth, not savings.

You’re a young SaaS founder and have created a smart audience targeting tool that doubles the cost-efficiency of my Facebook ad spend. So, the same number of conversions, same quality of leads, but my startup will be spending half the money. Great.

You come to me and here’s your pitch:

“Hey Aditya, you currently spend ₹4 lakh per week on your Facebook advertising, getting around 200-250 quality leads a week. With my tool, you will get the same number of leads but at half the cost. And for that ₹2 lakh in savings, you need to just pay us ₹40,000. What do you think?”

Now, in your mind, this sounds like a great pitch. You're saving your customer ₹2 lakh in spend, and only charging ₹40,000 for doing that — just a 20% cut from the total savings — which sounds like an absolute deal.

But let me tell you why that pitch won't work.

For a funded startup, growth is much more valuable than the spend.

To understand this, you just need to consider that even if you help me spend that ₹2 lakh per week, you aren't telling me what to do with that saved money to grow my startup.

The question of "How do I increase my customer base?" still remains unanswered.

Now, contrast that with this pitch:

“Hey Aditya, you currently spend ₹4 lakh per week on your Facebook advertising, getting around 200-250 quality leads a week. With my tool, you will get double the number of quality leads per week but at the same cost per lead.”

Not only is the framing here much more aligned with my goals, but with that frame, you also just increased your margins by 10x.

With the initial pitch, you were just getting paid ₹40,000/week; now you're getting paid ₹4 lakh a week. And the reason is simple:

If my total performance marketing budget is ₹10 lakh per week and I'm willing to spend ₹4 lakh on Facebook ads because it is a strong channel for me and helps me generate 250 quality leads, I will be happy to spend ₹8 lakh on Facebook to generate 500 quality leads. It doesn’t matter to me how much of that ₹8 lakh is going to Facebook versus adding to your profit margins. I'm not looking “save money on Facebook ads” but rather to “generate more growth at a similar unit cost.”

And getting more quality leads is the problem I want to be solved, not saving money per lead. I already have a budget allocated for marketing, beyond which I'm now only focused on maximising the RoI on that budget.

This also ties into the fact that "savings" is not how budgets normally function. Budgets, even in big corporations, are siloed; the "Performance Marketing" budget is different from the "Tooling" budget is different from the "Salaries" budget. Helping me save in one department won't mean my budgets for other departments will increase. My budgets will still remain the same, and now with the added headache of figuring out where to deploy the money I'm not spending in order to grow the company.

As a SaaS marketing tool, your pitch to me should be around "how you help me spend the same to create more growth" versus "how you help me spend less for the same amount of growth."

It is growth that I'm looking for, not savings.

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