Selling SaaS to the Reluctant Buyer: A Toast Case Study
Like the world of SaaS, the restaurant business is not for the faint of heart. And, like building a successful software business, running a successful eatery of any kind requires passion, vision, commitment, strong culture, smart systems and attention to detail.
Ellie Mirman has been VP of Marketing at Toast for the past two years. This growing, Boston-based SaaS startup provides culinary business owners with an all-in-one restaurant management system that includes a robust point-of-sale (POS) system along with features that measure critical restaurant metrics in real time, giving business managers instant, remote access to the actionable insights they need to run their operations more efficiently and cost-effectively.
“Our wide-ranging customer base is all over the country,” says Mirman, “and includes every kind of business from small cafes and food trucks all the way up to chain restaurants with hundreds of locations and fine dining establishments.” In addition to its exclusive focus on restaurant tech and dedication to that audience, Toast has grown its business by successfully selling to reluctant buyers – people who don’t have much experience buying technology products and / or simply aren’t immediately willing to invest the time and money needed for a technology upgrade. The Toast team uses a number of smart tactics to win these less-than-enthusiastic buyers over.
Know the Buyer
“We engage many different types of buyers,” says Mirman. “Besides the variations in business type, size, and geographic locations, we also have to consider whether they are in a major metro versus a more rural area, how long they’ve been in business, and their comfort level with technology.” In other words, there are a lot of variables in play, some more easily categorized and others more nuanced. A successful sales conversation requires clear insight into the barriers to purchase.
“Ease of use is a big piece of the conversation, for example,” Mirman explains. “Restaurant operators can sometimes be technical people, but oftentimes it’s not their core focus. They don’t want to have to spend time on that side of things, so – if they’re comfortable with something they’ve used in the past – getting them to try something new can be a hard challenge to overcome.” Understanding this buyer mindset is particularly important in the restaurant industry where the legacy solutions in the market run on very different models. “We’re cloud and SaaS based,” says Mirman. “That’s very new to many of these people, so the idea of relying on the Internet and paying monthly for software as opposed to making a hardware purchase has required a really interesting mental shift.” Toast’s sales and marketing teams approach this challenge by being very intentional about educating their audience on the benefits of the SaaS model.
Understanding big issues like discomfort with technology or over-reliance on legacy solutions is important, but it’s also important to understand the day-to-day barriers to a sale. “On top of having to get themselves up to speed on new technology, restaurant owners also have a huge staff to train,” says Mirman. “And there’s also substantial turnover in the restaurant industry, meaning that they are constantly having to train new hires.” To help mitigate these concerns, Toast puts an emphasis on creating an intuitive product that’s easy for staff to learn and use, and they also provide a comprehensive archive of management and staff training materials on the website.
“We definitely try to lean into how our customers operate so we can best provide exactly what they need,” says Mirman.
Create a Consistent & Delightful Customer Experience
“Customer service matters so much,” says Mirman. “It seems obvious, but I think that, because they are in a service industry, our customers value that piece more than most. Service is such an integral part of how they succeed.”
“It’s also something they don’t get from a lot of other companies,” Mirman adds. “Usually, they get really poor service, so if we can surprise and delight them by actually providing great service, our efforts go that much farther.”
Mirman goes on to point out that providing a delightful customer experience must be the norm, not the exception. “In a business like ours, you have many different people in the organization who interface with customers,” she says. “We work hard to ensure that the customer experience we create is consistent and positive. It’s really about getting everyone in the company – especially those who are customer facing – to be aligned in how we work with our customer base,” says Mirman. “After all, you’re certainly not going to be on every single call or be able to anticipate everything a customer might say.”
Establish Credibility & Rely on Referrals
Often, the most persuasive voices a reluctant buyer listens to come from outside the seller’s company. While the restaurant industry might be highly competitive (in some cities, it might even be called “cutthroat”), it’s also a strong community of entrepreneurs and established business owners who share a common set of challenges. For this reason, referral programs and customer stories are incredibly effective for Toast.
“The restaurant industry is a great network where everybody knows everybody and they rely on each other a lot,” says Mirman. “Referrals and references play a huge role in our success, especially when you consider the fact that our buyers aren’t necessarily techies, and ours is a technical product.”
More than the typical consumer tendency to check ratings and reviews, restaurant owners are more likely to go straight to the source. “What do you do if you’re buying something, but don’t have all day to spend evaluating it? You ask your friend who runs a restaurant up the street,” Mirman explains. “You ask which POS system your friend is using, and how they like it.”
Toast makes the most of this network effect with a strong referral program. “We have a referral program that’s actually open to everyone,” Mirman says. “You don’t have to be a restaurant owner or even a customer. Literally anyone can refer a restaurant to Toast.”
While plenty of Toast’s referrals do come from owners and customers, they also come from area influencers and restaurant staff. “For instance,” Mirman says, “a bartender at one restaurant probably also bartends at another restaurant, and maybe they use Toast for one of the restaurants but not the other. The bartender can refer Toast and get paid for that referral.”
In addition to direct networking and referrals, Toast also puts customer stories to work on their website, which features testimonial videos on the homepage and a dedicated customer stories page.
“We love telling customer stories and put as much of that as possible on our website,” Mirman says. “We really try to let customers talk to each other, because they rely on that a lot.”
Build Personal Relationships
“One of the things that plays a really big role in any restaurateur’s decision about choosing a partner is the personal relationship,” says Mirman. “Because of this, we have a lot of people out in the field. Our customers love meeting face to face – they want to see and feel the product.” The Toast team strives to deliver a personalized experience that complements the hands-on approach many restaurant owners tend to take. Sometimes, local reps bring examples of the Toast product to a potential customer, and sometimes they will bring the prospect into another restaurant that’s already running on Toast.
And, when they can’t be there on the ground, Toast does their best to recreate a personal conversation via video. “Since we can’t always be there in person, one of the things we’ve tried to do is use video well to show the product,” says Mirman.
“Videos on our website help buyers see the product in action, get insight into different workflows, and gain familiarity with the hardware. This helps us bridge the gap when we want to be face to face, but it’s not possible.”
Demonstrate Your Product’s Real-world Value
Finally, one of the most effective ways to convince the reluctant buyer is to demonstrate your product’s value in terms the buyer can understand. “In most cases, the biggest thing you can do is tie your product back to a dollar value,” Mirman says. Quantifying a monetary value can be difficult when you’re talking about a product that is designed to save time and increase efficiency, but it’s not impossible.
“One good example scenario we use is the difference between having all orders and other data for a restaurant tracked automatically (and being able to have real-time access to all that data) versus having to track all of that information manually,” explains Mirman. “In addition to losing money because of an inefficient process, there are also very tangible costs associated with manual, pen-and-paper-based bookkeeping, including paying the bookkeeper.”
Another way that the Toast team demonstrates value is by comparing the 24/7 technical support that’s included as part of the SaaS model to the expense of having to hire an IT person to support a piece of technology that was bought outright without any service package.
A more subtle, but broader category of Toast’s value proposition is its ability to improve the operational efficiency in little ways across all of a restaurant’s buying, staffing, and general management tasks. “There’s a serious lack of visibility into a business when you do things manually,” Mirman explains. “When you’re small enough, you can probably manage things, but as you get bigger and make more sales, there are lots of opportunities to increase efficiency around food and labor costs.”
Toast’s automated, real-time data helps managers reduce waste. “Whether it’s overstaffing that leaves people standing around with nothing to do or not enough staff, making it impossible to serve all the customers, there are many fragile pieces of running an efficient restaurant,” says Mirman. “From staffing balance to making sure you have enough food to sell (but not so much that it spoils) we can show how Toast helps cut down on wasteful spending.”
Toast combines demonstrable value with a sense of urgency to further help reluctant buyers take action. “A lot of times, we’re working with customers who don’t have a particular deadline in mind,” says Mirman. “In addition to the general lack of urgency, someone who is going from non-SaaS to SaaS will have a monthly component to the pricing; so there’s no real incentive to start today versus next month.” The Toast team uses the ROI story to help a prospect understand the costs they could be saving if they signed up this month instead of next. And if that’s not enough, occasional promotions help encourage prospects to move now instead of later.
Knowing your customer, creating an outstanding customer experience, establishing credibility and strong relationships, and demonstrating value – these are Toast’s five strategies for converting reluctant buyers into happy customers. And this multi-pronged approach has helped drive impressive growth for the Google-backed company. In fact, the Boston Business Journal reported earlier this year that Toast is scouting for a larger, Boston location to house its growing team. Clearly, they’re doing something right.