What are ways software solutions typically save customers money?


1

I'm building a product for secondary and post-secondary education but for right now my product is more of a fit for the secondary education market. The product works and does what it is intended to do and the customers we've shown it to get excited. In fact, they get very excited and immediately see how it can provide big benefits to their students.

So we have a good product and it's priced to hopefully try to sell to them. It's probably 10% of what a comparable solution for this problem would cost. So if they want it then our product is a pretty good fit assuming they can justify the expense.

The only problem is that one customer wants to know how this can save them money since schools are in such a budget crunch. I have a feeling this is going to be something we hear again though.

So how are some ways that software that improves the quality of the educational experience could save someone money?

The most obvious way that I have thought of is that if a school system is losing teachers they are still accountable for results and this software will have the effect of improving the results of the students. The customers see this and that's our position as well. So I suppose if a school is losing teachers they are in danger of losing a lot more money if they fall behind and their students can't pass federal tests.

Part of me is wondering if I just built a product that everyone loves but no one will buy. I can't think of another product like that but it sort of feels that way.

Any advice or thoughts would be very welcome. Thank you.

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asked Apr 16 '10 at 11:50
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Jon
73 points

3 Answers


3

One benefit that may be measurable is time. If your software program saves the teachers time in either set-up or maintenance then that may be a cost savings (time = $). You can spin it by saying you are essentially freeing up the teachers to do higher priority tasks or planning better lessens. You can probably make a safe estimate to what you think a teachers time is worth and may be able to provide some estimated numbers.

Good Luck.

answered Apr 17 '10 at 02:39
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Shane
326 points
  • Interesting idea. I like it. – Jon 9 years ago

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Although they may raise price as an issue, your best option would be to spend time convincing them of the benefits of using your software. Demonstrate the strong points and key benefits, so that the product sells itself. Software is about people, show them how you can make their life easier or better and they will go from "How much" to "We must have it". You are cheaper than comparable solutions so don't let price stop you. If comparable solutions can sell at a higher price then you can also sell at your price.

People will always raise price as an issue, but I know from experience that if I like something enough and it solves enough problems then I would be inclined to buy it.

answered Apr 16 '10 at 14:43
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Smart Company Software
1,190 points

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Although Adrian is right that you want the customer to focus on the benefits, I suspect you are being drawn into a game that all schools have to play, and you probably have to play along. I suggest you spend a little time involving yourself in the ROI dance that goes on many organisations - if you prepared a nice 1-2 pager entitled "How XXXX will save your school money", it sounds to me that all of these type of objections could be dealt with in one fell swoop.

For example, I think you are the right track when you mention teachers, so take that as a potential cost to the organisation. Let's say lack of tracking systems leads to reduced moral which leads to 5% staff attrition (if you prefer, put it in the positive: having a good system will lead to 5% improvement in staff retention). Then put a number on that - say it costs $10,000 to replace a leaving teacher. The numbers don't have to stand up in court - people will make their own judgements around your figures - but they do need to be vaguely supportable.

Go through this exercise identifying every way that not having your system places a notional cost burden on the school. (I don't know too much about school budgeting, but I suggest finding a friendly school and sit down for half an hour with their financial controller - I'm sure you'll learn a lot to help with this exercise). Then turn this data into a nice one or two page glossy document with a big spreadsheet/chart that shows the saving (costs identified - price of your system) - it should be a nice big number. (Obviously, make a PDF if you're selling over the web.)

Of course cynics will ask "How do you justify your numbers?" I would counter that with the response "Show me it's not so." - if you've done your homework properly, it's unlikely they'll be more than 25% off your numbers. As I said above, largely this is a game, but if you're prepared to join in wholeheartedly, I think you'll find you can make the issue go away.

One final point. You don't say how you charge for your app. If you haven't thought about it, I would recommend subscription pricing (see for example this question ) - it is much easier for a school to justify an ongoing monthly/annual cost than a big up-front cost, and in the longer term, it makes your business much more sustainable.

Hope this helps.

answered Apr 16 '10 at 16:50
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Steve Wilkinson
2,744 points
  • Unfortunately what I sell is sort of an appliance so there's a hardware cost that's upfront and I'd need to price into a subscription fee. We've kicked around this idea and it's possible that it might work. You've given me a lot to think about. I guess I just assumed that the benefits alone being sold would be enough but I'm learning that we need to figure out how this would start to save the school money. – Jon 9 years ago

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