SaaS, or software-as-a-service, is a popular niche to get into and has quickly become one of the most fast-paced, rapidly growing, and exciting industries. In this article, you will learn about what SaaS sales are, who conducts them, the difference between selling SaaS and other products or services, and much more.
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What Is SaaS Sales?
SaaS stands for software-as-a-service. SaaS sales is the process of selling web-based software that customers can access through an online portal. These products are used to solve a business problem. It is a B2B sale and the end goal is to make the customer more successful. The product in SaaS sales usually has a subscription-based pricing model, so customers effectively become repeat customers every month, quarter, or year. The software is managed by its customer success team and supported by the provider’s product engineers and allows users to connect to and use cloud-based apps over the internet.
Who Conducts SaaS Sales?
SaaS sales are conducted by Sales Development Reps (SDRs) and Business Development Managers (BDMs). SDRs focus on outbound sales and qualifying leads, while BDMs focus on conducting product demos and closing deals. A SaaS sales team has one main objective: to move qualified leads through the pipeline and generate new revenue for the company.
What Is the Difference Between Selling SaaS and Other Products or Services?
SaaS products tend to be expensive, in part because they’re usually engineered by an external company that also supports and maintains the system. This means that sales representatives approach selling differently to permeate the entire sales cycle with added value. Consultative selling is a favorite approach among salespeople in the space. Companies will invest more time and money into each qualified lead in order to allow the representatives to add value at every step. This often occurs to more travel and face-to-face meetings than sales in other industries.
While other products and services are often bought in bulk, this is not the case with SaaS. However, relationship management is still just as important, if not even more so, because SaaS contracts often need renewing at regular intervals. This could be every quarter, six months, or year, depending on the contract. While it may feel like a one off sale, in reality the process is ongoing. For this reason, it’s critical that sales representatives maintain their strong relationships with clients and don’t disappear once they make a sale. This is an element of account management to the role of a SaaS sales representative, meaning that salespeople in this industry must cultivate additional skills.
Due to the relatively high cost of SaaS products, there is typically a longer sales cycle. It often includes many more touchpoints from both sales and marketing than the average process. Sales products also tend to be complex, so sales representatives need a solid understanding of the specifications and technology behind the product that they are selling. Some sales representatives in the space come from tech-focused roles related to the product. It’s also common to bring other roles of engineers or designers into client meetings in order to answer any complex questions that come up.
SaaS Sales Strategy
A SaaS sales strategy uses a variety of sales techniques, with the end goal of closing deals or upselling current clients. With SaaS sales strategies, there is no “one size fits all.” It is a matter of figuring out what works best for your business. Deciding on the SaaS sales strategy that will work best for your business depends on where your company is in its SaaS adoption and development. A SaaS sales strategy plays an extremely important role in your ability to grow and set up your company for long-term success. To reach the ultimate goal of generating revenue, your strategy should focus on:
- B2B Lead Generation: Generating customer interest in a product with the goal of turning that interest into a sale.
- B2B Prospecting: Directly reach out to your target customers to introduce your company, product, and services.
- Closing Deals: The final stage of the transaction, where agreements are signed and the sale is made.
The SaaS Sales Process
The SaaS sales process refers to the stages a company goes through to close a deal with a potential customer. There are five stages in the SaaS sales process:
- Lead generation – generating customer interest in your product
- Outbound prospecting – reaching out to prospects via phone/email/social media
- Qualification – evaluating if the prospect is the right fit for your company
- Demonstrating – conducting a live demo for the prospect
- Closing – negotiating terms with the prospect and making a sale
How to Sell SaaS
Selling a SaaS product is different from selling other products. Since the sales cycle is longer, it gives you more chances to find prospects. Here are some ways that you or your sales reps can sell your SaaS offering.
Create Strategic Trial Periods
Many SaaS providers have a free trial offering as a part of their sales process. A free trial is a great way to get new users. However, in order for it to be worthwhile, your approach has to be strategic. When a customer has the opportunity to do a trial, they are able to see the true value of your offering. While there is no one size fits all rule for how long a trial should be, here are some common trial lengths to consider.
Seven Day Trial Period
If you offer a simple straightforward product that a new user could pick up and adopt quickly, having a short trial could be a good option. Additionally, if you offer a lower cost product and don’t want to add unnecessary length to your sales process for a modest sale, you may also want to consider having a brief trial run.
Fourteen Day Trial Period
A two-week trial period is a common practice for many companies that sell SaaS products. While 14 days is still relatively short, it is enough time for a user to explore various features and benefits of the product while being brief enough to not hold up the sales process.
Thirty Day Trial Period
For companies that have more complex offerings, or who take an enterprise approach to selling, an extended month-long trial could be a better option. Additionally, if there are various stakeholders who decide on the implementation of a product, having a longer trial can be useful.
Stay in Contact With Your Prospects
Regardless of how long your offer period is, it is important to maintain regular communication with your prospects. By checking in with them during the trial period, you can hear their feedback in real-time. For any trial offers, buyers are left on their own to explore, making it easy to lose momentum. In addition to staying in contact with your trial users, the trial period can provide valuable insight into their usage and behavior patterns, which can give you a good indication of how likely they are to buy, and how they would use the software after purchasing.
Provide Valuable Demonstrations
The last thing you want to do is create an information overload situation for your prospects. For SaaS providers, the ability to conduct an effective demonstration is incredibly important. A good demo should demonstrate the value of your product, not overwhelm prospects with redundant information about the different features. One of the best ways you can prepare for demos is by researching the buyer. With this information, you can understand what problem they want your software to solve. When you know what they’re looking for, you can walk your prospect through hypothetical scenarios that are relevant to them, clearly demonstrating the value of your software and how using it will make their life easier. It is also important to make your demos as straightforward as possible. You should walk the prospect through simple ways they can receive the most benefit from using your product. You should also make sure to leave plenty of time for any questions that they may have.
Up-Sell and Cross-Sell Existing Customers
Up-selling and cross-selling your existing customers is one of the best ways to boost annual recurring revenue. This practice helps to provide more value to the customers as they require additional features, bandwidth, and services. This method typically works best for B2B SaaS businesses that offer different subscription tiers or levels. Just be sure that you or your sales reps tailor the up-selling pitch to each prospect.
Gather Feedback
To increase software adoption in your target market, you’ll need to understand how to improve the product. If you’re a representative in SaaS sales, ask your current customers how they are enjoying the product. You can do so with a quick check-in email. Following up can help you cement your relationship with them as well, making it easier to upsell later. If you’re the owner of a SaaS company, implement a company-wide customer satisfaction survey initiative. Have either your team send them out to customers who have been using your product for a while. Based on the findings, you’ll want to act quickly and rule out the improvements. Don’t forget to check in with customers once the improvements have been implemented.
FAQ:
- What does SaaS stand for?
- Who conducts SaaS sales?
- What are good trial periods for SaaS products?
- How do you come up with a SaaS sales strategy?
- What is up-selling?
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