Comment by bacheson1293 | Hacker News Reader

Comment by bacheson1293 | Hacker News Reader

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I've been in this exact same situation. I was writing software for a telemarketing company. Initially business was booming using a similar model to the one outlined in this article. In short, the owner made some questionable financial decisions and the company went bust. I was now out of a job but I left with the experience of creating and maintaining the technical side of a multi-million dollar SaaS company. Moving forward I was determined to be my own boss this time around.

I developed a SaaS for marketers and constructed a basic sales funnel incorporating telesales.

What I quickly found out is that my niche(marketers) is comprised of technical, high-level users. The same scripted sales approach that made my last company extremely successful was alarmingly unsuccessful when trying to close deals with marketing agencies and consultants.

Eventually I bootstrapped to over a million in sales by trimming down to a handful of coders and a single marketer. We implemented a trial period and let the software do all the heavy lifting. Not only does this reduce overhead and complexity but it also attracts the "right" type of customers. Customers that need convincing typically don't stick around long. Churn is SaaS kryptonite.

> Customers that need convincing typically don't stick around long.

Not saying you're wrong as I have no idea, but this seems counter-intuitive. A customer that puts more thought into buying the product seems more likely to stick around than one which buys on a whim. Can you give more detail about that?

In microeconomics, there's the concept of a "marginal consumer". When a demand curve is formed, it's so by mapping all the consumers' reserve prices (i.e. the maximum they're willing to pay for a product) on the y-axis and the quantities demanded on the x-axis (so the first guy is willing to pay $100 for 1 unit, the next one $98 for 1 unit, etc). The marginal consumer is the guy whose reserve price is exactly the the market price of whatever good we're talking about. So whenever the price of that good goes up, he stops buying it.

Now, if reserve prices correlate to the urgency and magnitude of consumer needs, the majority of consumers would be the guys who buy on a whim (if the demand curve is steep enough). They don't buy it because they want to, but rather because they need to.

tl;dr deong is right

P.S. If this still seems counterintuitive, consider that a customer asking too many questions doesn't necessarily signal he's interested in it. On the contraty, it could be that the more clueless he is, the more likely he is to ask questions as he didn't do any research in the first place. Example/anedoctal "evidence": Whenever I bought computer parts, for instance, it was mostly a silent trade, because I've picked them all beforehand. The only things I asked about were those I didn't bother to research.

Interesting, I hadn't thought of it that way before. Thanks for the explanation.

Presumably it's sort of a "if you need it badly enough to pay for it, you'd jump at a solution as soon as it showed itself" kind of thing.

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