One of the best feelings in sales is when you can win over one of your competitors’ customers. So in today’s article, I’m going to be sharing the exact tactic that I’ve used over the years to win over many of my competitors’ customers at different SaaS companies. By the end of this article, you’re going to have a template that you can also use with your prospects when you’re trying to convince them to switch over from your competitor over to your company.
Digging right in the tactic overall is to really just think about how you can make the switching costs as close to zero as possible. What this means is I want you to think about what is causing friction with your prospect in terms of switching over to? What do they have to do in order to actually do so?
For example, if you’re a CRM company, does that mean that the prospect has to export their entire database and integrate things into your database system? As well as train everybody on their team with different new protocols and standard operating procedures. Whatever the case may be with your business or service, what I want you to think about is what exactly would have to go on the to-do list for my prospect in order to actually switch over to your product or service.
So the best way to think about this is to simply ask a few of your prospects that are contemplating whether or not to switch over for what are some of the considerations that they’re thinking about as they navigate this purchasing decision.
But when it comes to really making the switching costs as close to zero as possible, what I like to actually give the prospect is an email template that they can use to send to their current provider in the case where they’re actually ready to switch. I’m going to go ahead and share this template, which I’ve shared with prospects before as well. You can obviously adapt it, however, you like, but it goes something along the lines like this.
“Hey there, a few years ago, I paid in full for X, Y, Z tool subscription through X, Y, Z date. Unfortunately, it’s come to my attention from my team that we’re no longer deriving enough value from our subscription of this time, and we’re looking to cut back on expenses, given all the craziness going on in the world. I’m writing to see if you’d be so kind to see whether a good faith prorated refund would be possible for my subscription from X, Y, Z day two in the end of the contract. I understand that typically, this is one of the downsides to paying for multiple years upfront in your terms of service state, subscriptions are non-reactive, but our X, Y, Z subscription remains one of our biggest expenses on an annual basis. And it’s unfortunately not being used in the way we had intended at this time. A prorated refund would go a long way for our business during these trying times. Thanks for your consideration. Your name.”
Why this template is so effective
So the reason why this template is so effective and you can feel free to adapt it however you’d like for your prospect is because it actually gives your prospect something that they can take directly back to the vendor that they’re already using. And the reason why that’s really powerful is because one of the worst things that people have to deal with is the sales team on the other end or the customer success team on the other end of your competitor in terms of just dealing with their objections to your prospect wanting to switch over.
So by providing this template to your prospect, what you’re essentially doing is you’re writing the excuse letter for your prospect for why they want to switch off. But not only that you’re positioning yourself as an advisor in your prospect’s exploration towards switching over to your product or service. What I mean by this is instead of your prospect having to really stress about what they might have to do in order to make the switch possible, you are making a lot easier for them to make that switch because you’re not only telling them exactly how they can ask for a refund of sorts, but you’re also saving them money and reallocating budget for them from the competitor to your product or service.
How to manifest this strategy?
There’s a few other ways that you might be able to manifest this strategy in terms of bringing the switching cost as close to zero as possible. But this is one of the most effective ways that doesn’t cost you your business or service any extra money as well.
That being said, here are a few other ways that I’ve also done this in the past in order to win over other customers. Another tactic I’ve used is simply told a prospect that if they’re ready to switch over that I will go ahead and see if I can break them a deal today in order to make that switching cost even easier.
When you give them this sort of discount, you want to make it clear that it’s a one-time discount where maybe you’re going to knock off the first month’s subscription rate or just a discount on the first month’s subscription or to make that transition a little bit easier. At other times, I’ve also applied it to some sort of annual plan where if I feel like the prospect is a little bit on the fence and they may or may not stay with us for a long time, I will broker a year-long deal with them and essentially tell them, “Hey, I understand that this switch is a big ask for you since you’ve been using XYZ competitor for a few years. So here’s what I can do for you. If you’re willing to try us out for an entire year, then what we’ll do is as long as you meet XYZ criteria of usage by the end of that year, if you are unsatisfied, for whatever reason, we will give you your money back.”
And if you really want to sweeten the deal in terms of making it easier to switch over from your competitor, you can even tell them, we’ll give you 110% back in terms of your money in the case where you are unsatisfied. I promise you all the times that I’ve run this sort of guarantee or some form of a guarantee, I’ve never had a customer actually be unhappy after the year of using us.
So it really comes down to providing a ton of value to your customers and be having a great product or service to also be rendering to them. However you decide to manifest this strategy, the main thing I want you to keep in mind is really just thinking through things from the lens of your prospect, what are they finding challenging, ask them what they need to do, for example, to get this approved by the budgetary people or the key decision-makers for this purchasing decision or ask them what they have to do in terms of the legwork to make this transition easier.
Once you’ve gotten the hang of thinking about how to make the switching cost as close to zero as possible, whether by using my template or by using something in which you are just offering some sort of guarantee, you’re going to want to take it a step further in winning over your competitors’ customers.
One way you can do that is to literally go onto the testimonials page of your customer and then find the customers that are happiest with your competitor. I know this sounds crazy, but this is something that I’ve done over the years and it’s been really effective in the longterm. Now, this takes six to 12 months to actually convert one of these customers. But what I’ll literally do is I will go to my competitors’ websites see who is leaving them testimonials and then make sure that I am landing into the inbox of those testimonials.
The best way to do that is to use some of the cold email strategies that we’ve written here. But essentially the long story short is you want to make a compelling case as to why everybody is switching over from your competitors over to you. And the thing that’s really powerful about this is once you convert one or two of these competitors’ testimonials to your side, you are able to work in that person’s testimonial into your competitor comparison pages.
If you’ve never checked out competitor comparison pages, that’s another interesting topic that I’ve covered in a previous video in terms of the importance of having for your SaaS business. What’s really powerful here is that once you’re able to have one or two of these conversion events from your competitors’ customers, then you’re able to reference that customer over and over again with your next prospects who might be using your competitor’s product.
And then the other bonus tip that I can tell you is people always love when you can make them feel like you are doing them a huge favor. So the best way to do that is to make it seem like you are really pulling every string out there in order to make the switch easy for them. So on the idea that I gave you earlier in terms of offering some sort of one-time discount to make the transition easier and things like that, the exact language that you’re going to want to use, whether it is on the phone, in a Zoom meeting or over an email is, “Hey, I’m not sure I’m going to be able to pull this off, but I going to see if I can pull some strings with my manager to get you a deal to make this transition easier for you.” Or something along those lines.
But when you’re able to refer to some sort of greater power than yourself, and that you’re willing to go to bat for the prospect, they are also going to be a little bit more compelled to want to go to bat for your company’s product or service. And from there, that’s when the beautiful conversions happen and they become a new customer of yours.
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