Hey, don’t be so hard on yourself today.

And, Happy 2021! This is going to be your year.

By the end of this article, I hope you have a new tool in your toolbox to structure a buyout of a competitive product.

Hope you enjoy ✌️🏄

PS - Below is my first YouTube video for you all :) Hope you enjoy it.

Quick Story

We had a customer whose SDRs were on Outreach. Their AEs use a competitive product.

We spent a few months trying to understand how to get the AEs off of the competitive product.

Finally, it hit us. We need to offer a buyout of the competitive product.

This offer was taken to the CRO.

We aligned with a trigger event (an SKO).

And recently landed the buyout.

That's the quick and dirty story.

Now onto showing you how we went about making this expansion happen.

Step 0: Find current customers that have a team using a competing product

If you are selling intent data, maybe the US team is using your product, but the European team is using a competing product.

If you are selling Sales tech, maybe the Hunting team is using your product, but the closing team is using a competing product.

Step 1: Let’s be real, make sure you’ve provided huge value to the team currently using your product.

Nuff said.

Step 2: Understand what trigger event you can align to

- SKOs

- Changes in the org structure

- New leadership objectives

- Team morale

- Contract renewal

There are more trigger events you can align to. Those happen to be the most common I see.

Step 3: Come up with a deal structure

Here's how we structured the deal for 75+ additional seats:

1. Offered a "credit" for the buyout (think of it as a one-time discount). To make it easy let's say their current contract with the competitor had 10k left on it. We needed to come up with 10k. Instead of paying them 10k, we gave it to them in the form of a discount on the new contract they signed with us.

2. Renew their contract with us for 2 years. Had the customer renew their current contract for 2 years.

3. Spread the credit over the 2 years ($5k per year).

A couple of items to point out here. We offered the buyout as credit so the customer didn't feel like they were double-dipping.

We asked that they agree to another 2 years with us. This protected us from churn in a few months during their renewal.

My challenge to you today:

Go and find a current customer that has a particular team on a competing product.

Understand how you can rip out a competitor by getting creative with your deal structure.

👇👇👇

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