Beware the False Promise of Nirvana: How SMBs Should Shop for Price-to-Value
Marc Pickren — December 19, 2019 
Nothing can throw a consumer into a state of crisis like a grocery aisle. You’ve been sent to buy laundry detergent, say. A simple enough assignment on the surface, right? But then you’re accosted with a runway of options, each bearing bright and shiny promises. Freshest scent! Allergen-free! Powered by OxiClean! Whitest whites! What was once a straightforward task now feels overloaded with the risk of making the wrong choice.
As consumers, we’re groomed to value what we’re made to think we want, over what in truth we need. The same familiar cycle of seduction and frustration exists in the world of SMB software. Everyone is pushing the fix-it-all nature of this customer relationship management tool or that brand of accounting software. Meanwhile, the average SMB makes similar leaps of faith to those made in consumer decisions, fingers crossed that the product will live up to the hype.
And then…the bubble bursts. The research is disillusioning: Less than 40% of CRM customers have end-adoption rates above 90%. Nearly 50% of CRM licenses go unused by small businesses. The software sits ignored. Staff is left feeling intimidated by the product. What was supposed to an awesome value-add ends up in bruised egos and money thrown out the window.
But chin up. There is a way to shop with focus and strategy and a clearer eye on what really matters. Here are three ways SMBs can sidestep the threat of product disillusionment and reclaim technology solutions as the gift they were promised to be.
- Streamline needs before purchasing.
Going back to the grocery store for a second, heed the warning of never going food shopping on an empty stomach. Nobody wants to end up with a cart full of spur-of-the-moment purchases that spoil or go uneaten at home while the family wonders what’s for dinner.
An SMB has a limited budget for tools to increase productivity and lighten staff-load. In other words, define the specific tasks at hand before slapping nifty-sounding, potentially irrelevant tools into the budget. The cost of failing to do this preliminary homework is staggering–U.S. organizations were said to have wasted $ 30 billion on unused software over a four-year recent study. Every dollar on an SMB budget is too precious to throw away at unexamined promises of game-changing success. So first figure out what the game itself is.
- Look for the helpers.
Mr. Rogers was right when he told kids to always look for the helpers in times of chaos. We need them to survive, and the same is true when navigating the introduction of new software.
Before you go all-in on a purchase, research a product’s onboarding process. Is it extensive and ongoing, or is it a slap on the back and “good luck”? Are you promised continuous service that drives consistent usage, or are you or your staff going to be forced to fend for themselves when the going gets tough? For software to be of use, an SMB needs to know how to use it and know who they can count on for troubleshooting and handholding throughout the relationship–as opposed to just the consumer courting stage.
- Define your price-to-value
The key to understanding value-based pricing lies in an equation called True Economic Value (TEV). It represents what someone will pay for your product or service based on its value over your next closest competitor. Harvard Business Review’s Marketer’s Toolkit spells it out as: TEV = cost of the best alternative + value of performance differential.
But in the end, our only job is to buy a soap that gets our clothes clean. And we want to use every drop in the bottle to get our money’s worth. That same sense of efficient accomplishment is the goal with SMB software. We can’t buy five individual feature-rich packages if two go unused and one leaves you or your team feeling inept or alienated. There’s no advantage if the bundle of products ends up being more expensive than if we’d just gone with the more strategic all-in-one in the first place.
The most important thing to remember is that we are up to these challenges. If we are not going to forever fall prey to the siren song of promises, we have to better know and act upon our SMB needs. We can buy the right soap. We can introduce technology into our business life that makes the day easier and more productive. Because when we know our own needs and values, we demand the same sense value from the products we bring into our workspace. And that … is priceless.
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