Odds are that even if you didn’t know what SaaS stands for, you’ve definitely at least engaged with one SaaS company in your lifetime. Google, Microsoft, Zoom, Hubspot, Salesforce, Dropbox, Contractbook … think software, and you’ve got yourself an SaaS company.
SaaS stands for Software as a Service, and that is exactly what all these (and other) companies do. SaaS companies create, host, and sell web-based services online. It is no small game either – in fact, Gartner estimates that by 2021, the SaaS market opportunity will stand at a whopping $85 billion, representing the biggest segment of the market for cloud services.
There is no time like the present for being a part of SaaS’s astronomical growth journey. However, burgeoning competition in the industry means that the role of sales will become increasingly key to success. Here is a helpful sales guide to help you understand how to win at software sales, along with the various SaaS sales models, selling tips, and much more.
What are SaaS sales and how do they work?
Since SaaS sales involve selling web-based software to customers, it is a little different than selling a physical product in a store (or even online).
Typically, software companies rely more heavily on inbound marketing to increase sales, making use of digital marketing and online advertising to bring in interested leads. Marketing teams then work to transform these into qualified prospects, at which point the sales team reaches out to convert them into customers.
Since not every lead may be interested in becoming a customer right away, this tends to be a long drawn out process with multiple touch points. It requires heavy investment into marketing as well as customer relationship management platforms, both of which help to manage the pipeline more effectively.
What is more - sales reps need to be both, knowledgeable about the software, as well as have a deep understanding of the customer so that they can communicate the specific benefits that might interest them.
With respect to this, an important element is the personalisation of communication. Unlike traditional sales in which customers are actively seeking out a product, SaaS companies mostly try to lure customers in by displaying the benefits and features of their products. Since each prospect may have different needs, personalisation is key to closing customers.
What are the different types of SaaS sales models?
Much of your success in SaaS sales depends on the sales model you choose – after all, depending on what your target market needs, you might have a harder time convincing customers to purchase your software if you do not get your pitch right.
Most software companies adopt one or a hybrid of the three primary SaaS sales strategies, which we will explain with the help of examples:
The Self-Service Model
This strategy places the onus of sales on the marketing team, relying on them to communicate the product features in a meaningful way to customers. Typically used for low-priced or mass consumer services, this model encourages users to sign up for the service themselves, luring them in with special offers like free trials or freemium subscriptions.
Consider companies like Netflix, Amazon, or Spotify, which invite users to purchase the service, without needing a dedicated sales team. These are examples of the self-service model in action.
The Transactional Sales Model
As the price of the service increases, customers become increasingly hesitant to purchase it. This is where sales teams come in useful to help customers see the value in purchasing the software. This model places equal importance on the roles of marketing and sales; marketing – to bring in qualified prospects, and sales – to convert these prospects into customers. Typically, sales reps have a wide variety of content and tools at their disposal to help convert the customer.
Many of the aforementioned companies that rely on the self-service model also have a transactional sales offering. It is a common strategy to shift to the latter, especially as the company expands.
The Enterprise Model
Enterprise sales are the highest risk, highest reward tier of SaaS sales models. Being the most high-ticket products, often with annual contracts and customised solutions, they require multiple dedicated sales teams to coordinate with individual contracts.
Enterprise salespeople typically spend months closing a single contract, after running extensive demonstrations and meeting with senior stakeholders. Because so many crucial elements are involved, sales reps work closely alongside product developers and marketers to deliver detailed product information to clients.
Contractbook, Salesforce, and Dropbox are some examples of enterprise sales companies.
Tips for closing SaaS sales
Closing SaaS sales requires effort. Timing, communication, and the art of persuasion all come together to convince your customer that they really need this service. Since they are so different from the usual sales process, there are certain things that you should always remember when it comes to SaaS sales. Here are some useful tips:
· Strike while the iron is hot: Speed is everything when it comes to closing customers. As soon as a qualified prospect is shared with you, you should waste no time in reaching out to them immediately, since at this stage, they have probably already gone through some form of interaction with your company already and are ready for the next step.
· Play the long game: Software sales are a marathon, not a sprint. When reaching out, don’t scare the customer off by trying to sell immediately; instead, spend time listening to their needs and seeing if and where your software fits in. It is better to deliver a personalised pitch, rather than trying to push a one-size-fits-all approach to your customers.
· Be friendly, but authoritative: There is an optimal tone to strike when communicating with customers. You have to come across as knowledgeable, but not overly technical – too much jargon will result in the customer not understanding the value of the product. On the other hand, being too flippant or casual can make you come across as not knowing enough about the product.
· Persistence is key: Do not be discouraged by a lack of initial interest; you have to be persistent. Often, customers will require more than 4-5 follow ups before they even agree to a demo, so make sure they do not fall off your radar. On the other hand, do not over-spam or be too pushy, or you risk pushing them further away from you.
· Make use of marketing metrics: Before initiating contact, see how much you can learn about the customer. Refer to marketing data to see where they came from, what they were searching for, what pages on your website they referred to, or any other information you can learn about them. This will help craft a value proposition that is targeted and meaningful for them.
· Focus on value in your demos: It can be tempting to list every cool feature of your product but remember – you have a limited amount of time with the customer. Focus on the macro – build a broad-level context for why the customer would need your product, before driving in to the key features that you think may be of use to them. This is more helpful than showcasing too many things that the customer may not even remember later.
· Do not be afraid to say no: Never over promise what you can do for customers, or you will end up losing both them, as well as your reputation. Feel confident in saying no to any hard-to-fulfil requests, and if you are unsure about any information, tell them you can get back to them later.
· Do not sell to unqualified leads: As tempting as it is to close every sale, your customers’ success should be at the top of your mind. If you really cannot see the customer making full use of your product, then they may not be the right customer for you. In this case, you need to do the difficult job of saying no to them. Remember - the cost of churn is always higher than the cost of acquiring someone else who could potentially become a long-term customer.
There are several resources, both online and offline, that can help you become a better SaaS sales rep. While these are just some helpful tips, you should always continue to read and keep up with the latest innovations that can help you nail down customers, and be the best salesperson you can be!