switching costs and momentum
This is about the tools we use.
It could be about keeping customers, too.
We’re Hubspot users. It’s the default, easy choice of a CRM for startups.
That doesn’t mean we like it. So we (but really, me) went looking for an alternative. Something new. Less bloated. Fresh. Attio looks promising. Clarify has a fresh take on it, too. And we know the team behind Clarify, so trust it’ll be good.
I was geared up to make the switch until my co-founder Kate asked how long it’ll take to get a new CRM set up and to learn it.
I then spent 3.5 minutes talking myself in circles trying to justify a new tool. “It has workflows.” “So does Hubspot.” “It has data enrichment.” “Didn’t Hubspot buy Clearbit to do that?” “It’s only $59 per month.” “But that’s only a little less than Hubspot.”
🤦♂️
Something clicked at around the 3.7 minute mark of my new-CRM-sales pitch.
I was asking Kate for permission to spend hours and hours of our time setting up and learning a new CRM because it looks cool and saves us $500 per year.
Time she could be sending follow-up notes, scheduling demos, talking to customers.
The switching costs are actually huge. Changing would cost more in time and momentum than $500.
That basic math ended my pitch and ended the conversation right then and there. We will stay on Hubspot (for now) and focus on activity that adds revenue.
There are two lessons I took away from this:
Small cost savings at the expense of time and momentum is no bueno. Optimize for momentum. It’s hard to build it from a dead stop.
If our customers think like I do, it’s going to be hard to convince anyone to switch tools. It should be hard. Our competitors are top notch. So that means we have to be smart about how we position and pitch our products.
We have to ask ourselves not only what do we need a new tool to do for us. We have to ask what its true cost is. Is the capability we gain more valuable than the stalled momentum it causes?
We also need to findq unique ways to position and deliver our products and services so as to minimize that momentum loss and cost.
If switching costs more than the status quo, we lose that sale every time.
Peter
(400 / 500)