What Is SaaS-Based Sales?
SaaS-based sales is the process of selling web-based software that clients may obtain through an online portal. SaaS, which stands for Software as a Service, is used by organizations to address their pain points or issues.
SaaS software is maintained and supported by a customer success team and product developers at the supplier. Typically, there is a subscription-based pricing plan. This means the sales team emphasizes upselling and maintaining current customers while acquiring new ones.
SaaS-based sales is a multi-step process for selling cloud-based products. Fundamentally, it involves recruiting new clients and upselling to existing ones. Why is this procedure so intricate? Software as a Service (SaaS) offerings provide the consumer with a sophisticated value to alleviate the main suffering. And therein lies the challenge.
How Is SaaS-Based Sales Different From Other Types Of Sales?
Selling Software as a Service is complicated since you are not immediately providing a product after a transaction. Instead, the product must be serviced and built, necessitating that SaaS sales representatives cultivate long-term client relationships to ensure future revenues.
Software-as-a-service (SaaS) salespeople must effectively describe the software’s advantages and functionalities. And it is essential to personalize each presentation to each prospect’s requirements. Representatives must also understand how the software operates to show and troubleshoot the product during presentations.
Because SaaS may be so sophisticated, it is usual to include engineers, executives, or product marketers in challenging sales discussions. A trained SaaS representative will also know when to seek assistance.
SaaS Selling Basics
All B2B organizations that develop software that sells have one thing in common: a well-planned sales procedure.
Marketing data acquired from your Ideal Customer Profile (ICP) should inform the SaaS-based sales process. The more knowledge you have of your entire addressable market, the more effectively you can sell software to that market.
The SaaS-Based Sales Process
The SaaS-based sales approach must always be based on client requirements research. This information is essential for marketing lead generation and sales.
However, it is essential to note that in 2019, the SaaS sales process is always virtually based on the relevance of the target audience. When clients are seeking a solution to their issue, they may misclassify it on occasion.
This is one of the primary reasons individuals do an average of 12 searches before realizing what they need to locate the pain/solution match.
Customer-centric data distinguishes one SaaS firm with a successful sales process from the other nine that fail.
There are five stages to selling SaaS that will make the process effective, repeatable, and scalable.
1. Define The Ideal Customer Profile
Defining your ideal client is a fundamental step in achieving sales success. You know where to find your audience, what suffering you can alleviate, and why your product is superior to your competitors. Here are some essential details:
- Short bio
- Defining personality traits
2. Create A Sales Pipeline
The sales pipeline is a graphical depiction of all marketing and sales stages that a client passes through. It is of the utmost importance to comprehend the current phase of the consumer and select the appropriate solution to advance them.
A pipeline is now a fundamental component of any CRM. Here are the primary justifications:
- To monitor sales win/loss statistics and identify weak phases that may be improved
- To get continuous reminders to follow up with leads at the appropriate moment
- To enhance the likelihood of closing the transaction
3. Fill The Pipeline
There are several ways to deploy lead-generating methods for SaaS. To start, combine your inbound marketing efforts with your social network outreach to get leads.
How to fill your pipeline with inbound and social:
Create a blog. Relevant and high-quality information is the key to establishing credibility and trust. The goal is to generate search engine optimized content so that Google knows what your blog and you are discussing. It is a tried-and-true method for increasing organic traffic, particularly if you want to utilize this material for social media activity.
Promote content on social media. Utilize your buyer persona study to determine which social media forums are popular with your target demographic. It enables you to attract clients through social media.
Establish a newsletter. As soon as you begin to generate traffic, you will want the data. Numerous data, including a newsletter subscription, is a great way to gather information about your target audience. Using a sign-up form, you may collect all the necessary details.
Share free supplementary stuff. Another effective method for collecting user data is to trade personal information for useful content. It may include ebooks, digital flipbooks, infographics, or pre-made templates.
4. Create A Qualifying Criterion
The distinction between MQL and SQL is apparent at first look, but here’s an example to clarify: Imagine that a new site visitor has subscribed to your site. You analyze their social networks and conclude that they are a member of your target demographic. However, after reviewing the subscriber’s website, you determine that their industry does not align with the difficulties you attempt to solve. You might choose important criteria and develop a qualifying framework for lead positions to prevent such minor but frustrating errors.
5. Examine Novel Theories
As soon as you discover a productive process, you should investigate ways to enhance it. To do this, you might use extra communication channels, alter your content strategy, or implement automated tools. Your objective is to enhance the client experience to the greatest extent feasible. The collection of consumer feedback is one of the easiest starting points. Try to develop a solution that improves clients’ lives, and they will happily give their opinions. Such a SaaS sales procedure may result in a substantial rise in leads. It also helps improve your SaaS product and sales representative abilities.
The SaaS-Based Sales Cycle
The duration of the SaaS-based sales cycle is determined by the product’s pricing and the volume of decision-makers participating in the transaction.
The association seems obvious. The lengthier the sales cycle, the greater the price. It is thus essential to create an effective approach for selecting the optimal SaaS pricing model. However, a few prevalent but not immediately apparent elements impact the time required to clinch the transaction or upsell.
The primary objective is to increase sales in the new market. This characteristic is unique to the blue ocean method. Before you can truly offer a consumer a new product, you will need to spend more time educating and persuading them.
Contracts at the company level are another cause for protracted sales cycles. Specific product needs and a complicated decision-making framework provide obstacles. Additionally, sophisticated software hinders sales. The rationale is self-evident. The longer the sales procedure, the more time consumers must take to comprehend all the advantages. To effectively demo, having the proper prospects in the room is crucial.
Additionally, the free trial time lengthens your SaaS sales cycle. If you provide a 14-day trial, be prepared to begin selling only after that period.
Getting Started Selling SaaS
You have mastered the basics, including a well-defined sales process and a natural sales cycle. What now?
You must choose a SaaS sales model.
A SaaS business model can help you determine how many employees to recruit, how to move clients through your sales funnel, and the necessary steps for your organization to develop.
There are 3 SaaS sales models you can choose from:
This concept can generate substantial income while maintaining modest expenses. In a self-service model, your clients understand the value of your product, how to purchase it, and how to use it without the assistance of a salesman or customer care representative.
The self-service strategy reduces cost and complexity since fewer developers and salespeople are required to produce and sell the product. However, your sales volume must be large to achieve your income objectives.
If you want to use the self-service approach, you will advertise your product and its value via B2B marketing.
Transactional Sales Model
This sales technique increases intricacy and cost. You may need to recruit more personnel to create and market the product, raising your expenses. As the price rises, so do your clients’ expectations. Before handing up their cash, they may want to establish a stronger commercial connection.
The transactional sales approach is distinguished by high-volume, efficient sales and support operations, short sales cycles, and quick onboarding. Customers should anticipate signing contracts, receiving frequent updates and thorough documentation, and having access to support representatives when issues occur.
Transactional sales models are often high-risk and high-reward, with a greater sales volume.
If you want to include a transactional model into your sales approach, you’ll need a united sales and marketing staff, extensive SaaS sales training, and discounts to convert more hot leads.
Enterprise Sales Model
The third and final paradigm is SaaS sales for enterprises. This model is costly and needs the greatest customization and sales assistance. There is more decision-making, resulting in a lengthier SaaS sales funnel, but the additional expense is well worth it.
This model is meant for B2B enterprise sales, as the name suggests. Typically, offerings are very complicated and feature-rich suites of solutions that target key company operations. Since they provide so much value, medium-to-large businesses are the natural audience for these goods and services.
SaaS Sales Metrics
SaaS sales metrics are essential to monitor because a single transaction is just the beginning of the customer journey from a sales perspective.
Why is it necessary to comprehend?
Because this component is significant, in contrast to creating new sales, a salesperson must produce recurring income - attracting new customers and convincing them to use an app for an extended period.
SaaS-Based Sales Commission Rates
As in any other sector, SaaS sales representatives are compensated with commission rates for meeting corporate targets. Typically, this payment is based on Monthly Recurring Revenue (MRR). A second alternative is the Annual Contract Value - ACV.
Typically, sales incentive plans are aligned with Key Performance Indicators and SaaS’s core business objectives. To grow sales as a salesman, you have two options: recruit new clients or focus on customer retention.
Thus, sales revenues are often deemed earned when a salesperson has completed their responsibilities per the acceptance criteria of a corporate development plan.
- Increase recurring income as much as possible
- Collect as much financials upfront as feasible
- Sign a long-term contract
- Drive the customer success rate in a short time, etc.
Sales Cycle vs. Sale Funnel: What’s The Difference?
As a rookie SaaS sales agent, you may find the term to be bewildering, particularly when it comes to sales cycles and sales funnels. The similarities between sales cycles and sales funnels are understandable. However, both notions are essential and unique. They provide a framework for comprehending where each consumer is in their buyer’s journey and what you must do next. They also reflect the likelihood of achieving monthly objectives.
To be successful in sales, you must speak the language. From the viewpoint of the sales agent, a sales cycle denotes all of the phases a certain client passes through throughout the sales process. A sales funnel displays the actions and procedures of your sales team, not simply the stages of a single customer’s journey.
The sales funnel depicts all phases of the buyer’s journey, including those that occur before the involvement of sales representatives. For example, the “Awareness” phase, which corresponds to the discovery of a firm or product, is often the consequence of marketing activities. In contrast, a sales cycle usually begins with the sales team already engaged.
The 7 Stages Of The SaaS-Based Sales Cycle
The phases of the SaaS-based sales cycle are comparable to those of conventional sales cycles; however, it may be longer, particularly for transactions with a greater value. According to Thierry Tremblay, CEO, and creator of Kohezion, their usual sales cycle lasts 80 days.
A sales representative goes through the following phases:
- Identify possible leads by doing a study.
- Connect: Make contact with the lead.
- Confirm if the lead is worth your time.
- Present: Demonstrate your product’s worth to the prospect.
- Utilize your sales abilities to overcome objections and go closer to a transaction.
- Close the deal: Obtain a “yes” and allow the ink on the contract to dry.
- Nurture: Check in with the new client as the beginning date approaches and supervise the transfer.
The 5 Stages Of The SaaS-Based Sales Funnel
In contrast to the sales cycle, which controls the actions of sales representatives, the sales funnel explains the processes purchasers must undergo before purchasing.
Due to the high cost of SaaS software, consumers often need substantial persuasion before converting. To lead a prospect, you must determine which stage of the buyer’s journey they are currently in and how to urge them to the next step.
When a consumer first learns about your product, the journey officially starts for them. Inbound marketing strategies, such as social media and protected content, are often used by SaaS firms to attract potential customers’ attention.
Contacting prospective prospects is another way for SaaS sales representatives to raise brand awareness. The use of cold calling, email marketing, and free trial offers are all standard strategies for making first contact with potential customers.
When a customer is at this stage, they are beginning to get interested in your goods. When a prospective customer engages with your advertising materials or visits your website, this demonstrates interest on their part. This can include downloading a PDF file from your website or going to a certain landing page on your site.
The lead can become a marketing-qualified lead (MQL) and then be passed on to a sales representative if the level of interest is high enough. For instance, if a person registers for a free trial of your product, they are often instantly qualified as an MQL.
At this point, it is up to you to pique a potential customer’s interest in your brand by providing them with information about it. You will need to have an in-depth understanding of your product and the products with which it competes, in addition to an excellent grasp of frequently asked questions.
When a potential customer is seriously contemplating making a purchase, they have moved on to the assessment stage of the sales funnel. Assist them in moving in the correct path by responding to their inquiries and resolving their specific challenges.
Through a one-on-one presentation or an applicable case study, illustrate how your solution may address their challenges to the potential customer. You need to be ready to reply to criticisms, whether they concern the product’s price or capabilities. Before beginning the negotiation, you need to know whether you are willing to provide a discount and what alternative possibilities, such as a lower membership tier, you may recommend first. You need to see if you are willing to offer a discount.
The potential customer is almost ready to make a buy, but they want a little bit more time to think about it beforehand. At this point, it is essential to maintain their interest level high.
Carry on the conversation with the prospect, and ask them questions. If they stop responding, write a follow-up email or phone them again as soon as possible rather than waiting too long. Due to the competitive nature of the SaaS business, there is a strong likelihood that they are considering offers from other companies.
Finally, you’ve arrived at the point in the negotiation process when the potential customer gives you the green light to close the sale. This may be the last step of the buyer’s journey, but that doesn’t mean it’s the end of the road for SaaS sales staff.
Customer retention is essential to the success of SaaS businesses. They need a recurring income that is somewhat stable (if not rising) since new SaaS sales take a long time to complete and might be difficult to find. Maintaining healthy ties with existing customers after a purchase reduces customer attrition.
How To Sell SaaS: 6 Sales Tips For Success
Know The Product Inside And Out
You should prepare to answer a lot of technical questions since there will be a lot of them. Talk to the product marketers at your organization and spend some time using the software so that you can get acquainted with the new features and capabilities being rolled out.
If a lead asks you extremely difficult questions, you shouldn’t be scared to ask for assistance from your team. It is not unusual for SaaS sales meetings to include the participation of engineers or product managers in closing a purchase.
Be highly persistent in your search for potential customers. According to research conducted by Gartner, making contact with a prospective customer might take up to 18 separate phone calls.
The majority of sales representatives for SaaS conduct hundreds of calls per day. The fewer responses you get, the more demoralizing the experience becomes. However, you shouldn’t let it deter you. If you stay in contact with leads regularly, you will ultimately see engagement from them.
Set Up An Email Drip Campaign
Consider using an email drip campaign to communicate with potential customers who have shown interest in your company as a method of nurturing leads. This kind of marketing tends to boost click-through rates and prevent potential customers from forgetting about you.
You might, for instance, set up a drip campaign for someone who has downloaded the ebook that your firm has published. Following the completion of the download, the potential purchaser will get weekly emails with informational content about your product for six weeks.
Alternatively, you could create a drip campaign that you will send to customers once they have signed up for a free trial. You should give prospects access to information via the campaigns that will assist them in getting the most out of your product and maximizing its value.
Call Prospects As soon As They Sign Up.
The most telling sign of interest is when a potential customer signs up for a free trial. In the first five minutes after a lead has signed up, give them a call to provide them with a warm welcome and introduce yourself. They have shown interest, so you should thank them for it and offer to answer any questions they have.
When you take action as soon as possible, you open up the possibility of offering a live setup call. Establishing a connection with a potential customer as quickly as possible and increasing the likelihood of that customer purchasing from you are both facilitated by providing that level of individualized care.
Offer Short Product Demos.
Before organizing a product presentation with a lead, it is important to research and qualify the lead. Before you can demonstrate the advantages of your product, you need to have a solid understanding of how it will directly benefit your customers. One-on-one demonstrations should be kept to a minimum, no more than fifteen minutes, out of respect for potential customers’ time, and plenty of space should be left for inquiries.
When a sales representative has several prospects actively interested in their product, they may provide “one-to-many” demonstrations. These are quite similar to webinars; however, they are held for a much smaller audience of buyers with comparable interests. One-to-many demonstrations benefit potential buyers who want an introduction to the product but don’t want to talk directly with a sales professional. This kind of presentation may be presented to a group of people simultaneously.
Identify Opportunities To Upsell
When it comes to software as a service (SaaS), a successful sale paves the way for further sales in the future. After a client has made a purchase, you should keep in touch to see whether and when they are ready for a product or service update.
Customers’ behaviors may be analyzed using SaaS technologies, allowing for the discovery of upselling prospects. For instance, you could want to check if a customer is approaching dangerously close to exceeding the use limitations of their account. If this is the case, you should contact them and inquire about their interest in a higher-tier package.
It is important to have patience since it takes some time for subscription services into becoming profitable. In the early phases of any SaaS firm, it is essential to place a primary emphasis on forming connections with clients.