SaaS (software as a service) products include applications hosted, managed, and used on the Internet. SaaS solutions require a different selling method than physical products and services. This guide will cover the different SaaS models, metrics, and strategies for successful selling in this fast-paced environment.
What is SaaS sales?
SaaS sales involve the process of selling software that helps customers and businesses solve a certain problem via an online portal, application, or website.
1. How is it different from selling other products?
SaaS solutions tend to have highly customizable features. This requires SaaS sales teams to give their customers a rather tailor-made experience when purchasing. Given the technical nature of SaaS products, potential clients need sales representatives to provide ample training to feel ready to buy.
2. What are the different SaaS sales models?
Depending on their unique price and complexity balance, SaaS businesses format revenue generation strategies on the following:
This model heavily relies on the customer’s will to service themselves and works better for straightforward products. This is typical amongst SaaS startups as it lets them achieve higher revenue while keeping their average selling price (ASP) low. Great user experience and abundant documentation fuel the success of this model.
This model is geared towards larger SaaS companies where sales and support teams are made available to assist the customer throughout the buying process. The cost this process represents is higher, but it makes the best sense for products that are a bit too complex for self-servicing.
This sales model is more appealing to niche SaaS companies that sell software at a lower volume yet higher prices. These businesses have industry-trained salespeople who work closely with customers to meet their particular needs, perform software demos, and even meet executive stakeholders.
What is the SaaS sales process like?
Most SaaS companies thrive on a repeatable sales process their team can iterate and track every cycle. Having a well-structured pipeline streamlines the process and allows managers to train their teams more efficiently. The usual flow covers:
1. Lead Generation
Opposite to those companies that heavily rely on calls and emails, some others resort to outbound strategies like trade shows, conferences, and other events that allow face-to-face contact with potential buyers. However, it’s important to complement this approach by incorporating inbound strategies such as:
- Content marketing
- Direct mail and email
- Social media
- Pay-per-click (PPC) ads
- Affiliate programs
SaaS sales teams will see better results when they prioritize follow-ups with prospects that are more likely to convert. Calling or emailing potential customers can help determine if a potential client is interested in moving forward with the purchase. During this stage, the sales team should determine the customer’s level of engagement, their need for the SaaS product being sold, and if they can afford it.
The ultimate goal of this stage is getting salespeople to meet with qualified customers to learn more about their pain points and expand on how their software can help solve them. This includes offering clients a demonstration of the product so that they can delve into the experience of using it. It’s common for companies to also offer a free trial to hook prospects in, at which point, the sales team can participate in creating an outstanding onboarding experience.
In this stage, qualified customers would be ready to make a decision. The salesperson would have to ensure that the customer gets all the support they need to use the platform properly and regularly. That typically includes technical configurations, educational materials, and sometimes team training. The goal for the salesperson would be to set up the billing portion to make sure that a recurring subscription is placed.
What strategies should SaaS sales teams employ?
SaaS sales teams must always look for ways to captivate and retain customers for the company to survive. Some known strategies to achieve these goals in SaaS selling are:
1. Cold Calling
SaaS salespeople also use this technique to contact potential customers via phone call to offer them the company’s software. It allows prospects who have never reached out to learn about the product. Reports actually indicate that at least 47% of decision-makers prefer taking sales calls over other channels. With this, SaaS companies tend to build a team of business development representatives (BDRs) who can set up appointments through cold calling.
2. Email Campaigning
Emails can be used in different ways across different parts of the sales process. From cold outreach to onboarding sequences, email campaigns are useful in engaging with prospective and current customers alike. It allows the marketing team to:
- Segment subscribers
- Nurture leads
- Convert prospects
- Ask for feedback
3. Social Selling
With all kinds of consumers flocking on social media, this should be an obvious opportunity. Amongst high-performing sales professionals, it is. 90% of them already leverage this strategy, proving its effectiveness in earning valuable attention, trust and loyalty. Establishing thought-leadership on LinkedIn is recommended especially for B2B with potential buyers also networking there. Nonetheless, places like Facebook, Twitter, Instagram, Quora, and even newcomers like Tiktok can’t be easily dismissed.
4. Business Texting
While some mainly use business texting for transactional messages, salespeople should start looking into SMS/MMS for converting SaaS leads. It’s perfect for quickly following up, providing support, and scaling outbound messages. Take note, it has way higher open rates than emails.
How to build a SaaS sales engine
Building an efficient salesforce is vital to achieving the company’s goals. For the SaaS sales engine to work properly, managers must perform the following tasks:
1. Hire For SaaS Sales
SaaS sales representatives and solution engineers must have excellent interpersonal skills, know-how on modern selling strategies, er as well as technical-savviness to strongly advocate for SaaS solutions widely and deeply. Networking, prospecting, and presentation skills are to be expected by default. However, the SaaS sales process differs greatly from other businesses, so a clear understanding of this specific funnel needs to be there along with enthusiasm to work closely with product members.
2. Identify and Monitor KPIs
Sales managers need to stay on top of performance indicators to measure how their SaaS sales team is doing in each cycle. Calculating customer acquisition cost, lifetime value, sales velocity, and conversion rates help reveal a healthy sales process. KPIs like call volumes, email sends, and open rates should also be monitored to effectively optimize day-to-day operations and playbooks.
3. Set Up the Right Technologies
It’s been found that only ⅓ of an agent’s time is spent talking to prospects. The rest is arguably wasted on things that can actually be automated such as data entry, follow-up tasks, and leaving voicemails. With a reliable CRM system and an integrated contact center solution, SaaS businesses can remedy this and easily get a clear overview of open deals to focus energy on over busy work.
The Secrets to SaaS sales success
There’s no magic formula to skyrocket a company’s SaaS sales. However, some factors can help improve the process and reel in more clients.
1. Optimize for Conversions
Several factors can influence conversion including messaging, response times, quality of demos, and even the number of follow-ups. Identifying where in the funnel leads drop-off can help define training programs and procedural adjustments that would improve overall sales performance. Run experiments where you compare different emails, different channels, and different offers to learn what sticks.
2. Create Personalized Experiences
SaaS customers expect higher levels of care and attention especially when they are making long-term decisions. To entice prospects to sign up for a subscription, the sales team must provide personalized experiences. Making the buyer’s journey feel tailor-made will boost the chances of closing a deal. Provide sales representatives with customer avatars and buyer profiles as the foundation of their relationship-building process.
3. Work to Reduce Churn
A company’s churn rate is its annual lost customer percentage. To reduce it, some have their sales teams keep a close eye on new customers to ensure that they fully adopt the SaaS product within the first few months. Some also have account executives who stay on top of specific customer needs (typically, enterprise deals) to keep satisfaction levels high. For this, it is recommended that sales work closely with customer marketing and success.
3. Aim for Customer Referrals
Taking feedback is a terrific way to make clients feel heard and valued. It allows SaaS companies to identify improvement opportunities that would increase customer satisfaction which can then lead to productive referral relationships. It’s been said that referrals make good quality leads for SaaS businesses. Plus, it’s cheaper to generate and has high conversion rates. Run a quick NPS survey to identify promoters from detractors.
Get the help you need
Successfully selling SaaS products is all about providing high value to prospects and customers. In order to do that, educating and empowering the SaaS sales team itself is critical. Share this guide away, and hopefully, it provides ample context to establish the next steps. For help setting up systems to scale outbound efforts, automate nurture campaigns, and monitor remote sales representatives, reach out to Aloware for turn-key solutions.