The Truth About Sagetap
If you’ve stumbled upon this post, then I assume you’ve heard of Sagetap and are considering using them.
This has been my experience having been on the platform for a little over two months.
While one of my clients is getting a ton of “leads”, they don’t close any of them.
They’ve been using Sagetap for just over two months now and while it seems great, I advised my client to stop using them.
Recently, I met with this client and told them they should stop using Sagetap. I made the analogy of Innuits living in Northern Canada – one of the ways they secure food is by burying a knife in the ice with the blade facing up. They then put a little piece of meat on the blade, and a wolf comes along, takes the meat and licks the blade, cutting its tongue. All this blood starts pouring out and the wolf thinks it’s getting a really good meal so it keeps licking. The wolf’s tongue is so cold and numb to the pain that it doesn’t realize that every lick is actually cutting itself. Eventually, the wolf bleeds out, and dies.
Now, this company I’ve been advising hasn’t been able to get much traction from their previous marketing efforts. So to them, Sagetap feels like they are making progress – they are getting a lot of “leads”, so for them, it feels good to finally talk to people and demo their product. Much like the wolf, it feels like they are getting something, but they’re not. They are unknowingly just bleeding ourselves dry until they too eventually die.
They have had over 30 meetings, all averaging around $500 per meeting, so it’s not cheap. I said to them, even if they land the 31st call, what is our CAC and CAC payback? The economics don’t make sense. Last month, they spent $15k on Sagetap, so if they don’t convert at a higher rate, then there’s not enough margin to cover the CAC.
It also used another analogy – it feels a bit like gambling, which is highly addictive. Every day, they receive several emails from companies wanting to “meet” with them, so it feels like they are playing slots. They spend $500 to pull the lever and often the calls go really well so it feels as though they are getting close to hitting the lucky three gold chests, aka landing a new client. But this is why gambling and Sagetap are both addictive. They will get two gold chests in a row and then become excited and keep playing. “Maybe the next pull is where we will get lucky!”
Also, the “buyers” are paid to be on the calls. I didn’t know this until recently. I used to think companies such as my client (the sellers) put up their listings, and other companies (the buyers) are in need of a solution and are discovering companies and booking meetings.
This is not what’s happening.
Sagetap is a matchmaker, they make money when meetings are books. So what they are actually doing is going to company A and telling them, “Hey, this company B over there has this interesting product, would you want to see a demo? If you accept, we’ll pay you $300 (and Sagetap keeps the other $200). The company agrees because they are receiving a cash incentive.
Then Sagetap emails company B and says, “Hey, we found this company A over there who is really interested in seeing your demo. If you think they could be a good fit, give us $500 and we’ll introduce you.”
My client receives this email and thinks that company A has genuine interest and purchase intent, when they don’t.
Sagetap themselves even state that they are not a business platform, rather they are a platform for getting feedback. But then they play it like they are a business platform. So they play both sides. Frankly, my client has had enough feedback. I guess this is why they call themselves Sagetap, because they want to keep the faucet running and tap you of all your money.
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