The core purpose of technology and/or innovation is to make things easier for people. For instance, technology redefines the way we relax, makes communication easier, and even simplifies business and IT processes.

One of the ways through which technology has made business and IT processes simpler is SaaS. An acronym for Software as a Service, SaaS plays the important role of ensuring the software applications can be accessed, used, and managed on the internet. This means that organizations do not have to worry about the huge expenses that come with the traditional mode of developing software and applications.

Due to the numerous advantages associated with the use of SaaS, businesses and IT companies are migrating to it. This has created a demand and a thriving market for the sale of SaaS. In this article, we will discuss the concept of SaaS sales, how to go about it, the benefits involved, and also the possible downsides.

This article is important for almost everyone in the cloud computing business. Whether you are a developer, building a SaaS product or you hold a position as the salesperson in a company that builds SaaS solutions, you will find this article very useful.

The Concept of SaaS Sales

Before explaining the concept of SaaS Sales, lets us do a brief introduction to the world of Cloud computing and SaaS.

SaaS is an acronym for software as a service. What this means is that a provider hosts and manages software on the internet. This software is then sold to a client who accesses and customizes the software to suit its taste and needs. Examples of SaaS include Google Workspace, HubSpot, and Adobe Creative Cloud.

The client needs not to worry about the servicing, management, and maintenance of the software as the provider takes care of this aspect. Also, the software enjoys faster upgrades and easier integrations among other benefits.

These benefits which also include a lesser entry cost than traditional software models are the reasons why the demand for SaaS products has increased and leads us to the concept of SaaS Sales.

The concept of SaaS sales simply refers to the process through which you market and sell software hosted on the internet to clients. Your clients may be individuals, businesses (regardless of their sizes), and large corporations.

Your goal as a salesperson for a SaaS company is to increase your client base and acquire more clients as fast as possible. Also, you will need to retain existing customers while attempting to upsell to them. To achieve these goals, you need two skills, namely; attention and service. We will discuss these two skills in detail during the article.

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SaaS Sales: A Different Ball Game

If you have ever worked in a sales department before, then you know what selling, customer acquisition, and retention entail. This means that you have a hang of the sales process and this will help you in SaaS sales.

However, there is a catch. And this is the fact that SaaS sales are quite different from other types of sales. When marketing a physical product, you are expected to deliver the product almost immediately after the buyer purchases the product.

For SaaS products, the difference is glaring. First off, the product is not physical. You cannot simply deliver it after purchase because it was built, managed, and supported by an external body. Secondly, there is a longer sales cycle than the traditional selling model. This means that there is a lot of nurturing to do before the client is ready to buy the software.

Before clients buy a SaaS product, they are referred to as leads or prospects. Nurturing a lead entails communicating the benefits and advantages of using a SaaS product. It involves taking them through a basic breakdown of the SaaS concept and how it helps their business scale and perform more efficiently.

After doing all of these religiously, the lead is termed as sales qualified. However, this term doesn’t imply that the lead is ready to buy the software. As a SaaS salesperson, you need to access the next couple of steps carefully, to prepare them for the final stage where they get to buy the product.

With SaaS products, the key thing is to ensure that clients understand the benefits of the product as it applies to their business. This is an aspect that SaaS salespeople must look into. You don’t need to state all the advantages of using SaaS.

Rather, what you should do is identify the benefits of SaaS that helps your prospects achieve their goals and scale up their business. This way, you will be able to touch the pain points of your prospects through your presentation and enable them to realize reasons why they should buy the SaaS product.

Finally, selling SaaS products is different because it often requires bringing engineers, designers, product marketers, and other professionals in the tech space into presentation meetings. The reason for this is that SaaS is a bit complex and you may require the technical knowledge of these experts to make the client understand certain aspects of the product.

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Selling SaaS: The Process

We have established that there are lots of differences between selling SaaS and other types of products. In this section, we will take you through the process of selling SaaS for businesses and individuals alike. The following are steps involves in selling SaaS;

#1 Be Creative with Trial Periods

Trial periods are an important sales strategy in the IT business. The trial period is a way to introduce new users to the product and allow them to have a feel of the product. The idea is that, by the end of the trial period, users will have realized the importance and benefits of the product and then proceed to buy the product.

This approach can also be used in selling SaaS products. While you already know that trial periods help convince users about the advantages of the SaaS product, you need to utilize it creatively to get the best results.

One of the creative ways of using trial periods is to include time constraints. This involves setting a time limit for the trial period. The purpose of the time constraint is to pique the interest of the prospect so that they will purchase the software immediately after the trial period.

To do this, you need to select a perfect time limit. As different businesses use SaaS products and there are no rules for determining the perfect time limit for trial periods, we have many types of trial periods. These include;

A 7-Day Trial Option: This is also described as the short-term trial period. This type of trial option works perfectly when you have a simple SaaS product to market. Also, if the cost of the SaaS product isn’t that much, you need not offer a long trial option. Thus, the 7-day trial option is also perfect for that situation.

14-day Trial Option: This is the most popular option in the tech industry, especially when it comes to SaaS products. This trial period works perfectly when the SaaS product has lots of features or is a bit complex.

With the two weeks free usage period, the user will be able to explore all of the features, appreciate the benefits, and also have time to note queries about the complexity of the product without holding up the sales process and cycle.

30-Day Trial Option: This option works well for companies that have a complex SaaS product to market or those whose products are designed for enterprises and large corporations. The one-month free usage period avails the corporation the opportunity to carefully check out the product. It also allows all the stakeholders who would have a say on the purchase of the product to explore the different complexities and set them in the right mood for an eventual purchase.

These are the three types of trial period options that you can use to allow prospects to have a taste of the product and set them in the direction to buy the software. However, to get the best of these trial period options, you need to understand the type of SaaS product you are marketing and the right clients for them.

#2 Maintain Communication with Prospects during the Free Usage Period

Remember the saying “Out of sight is out of mind”? It applies in the SaaS sales process. You don’t want to lose touch with your prospects, especially during the free trial period.

You may wonder that why do I have to keep in touch seeing as the prospect is currently using the product?

The truth is that prospects left to explore SaaS products on their end up losing momentum and do not purchase the software at the end of the day.

The free trial period is the perfect time to fire up your prospect’s interest in the software. You can only do this by checking in on them while they use the product, listen to their questions and complaints about the products.

This feedback gotten in real-time helps you understand the position of the prospect on the product, and also helps you determine the next step in the sales process. Also, by maintaining contact with the prospect during the trial period, you can easily point the prospects to the features of the product that greatly benefits their business, thereby increasing the possibility of a purchase after the free usage period.

#3 Get the Demos Right

Another important aspect of the SaaS sales process is the demo or presentation stage. This is the part where you provide a demonstration of the SaaS product to your prospects highlighting the features of the product.

The problem, however, is that many SaaS salesperson gets this part wrong. What you need here is not an information overload on the features of the product. Regardless of the type of clients, you are trying to get, most companies and individuals do not care about the features of the SaaS product.

What they are concerned about is the ability of the product to solve their problem. And this is what you should focus on if you are serious about converting a lead into a client. You need to make sure that your presentation or demonstration highlights the pain points of the company and shows ways through which the software solves their problems and helps them achieve their goals.

Aligning your presentation to reflect the ability of the product to solve the company’s problem requires that you do due diligence in understanding the company you are presenting to. You need to research the company and identify their goals, objectives, and the problems they face while trying to achieve these goals.

After establishing these points, you can then find a way to link the features of the product to these problems and explain how the features proffer an effective, economical and efficient solution to the problem.

Also, while establishing the value of the product, remember to keep it concise and straightforward. A 15-minute demo on how the software solves problems peculiar to your prospects is better than an hour of overstating features and figures that do not benefit the prospect in any way.

In summary, rather than focus on the features of the SaaS product during the demo, you should pay more attention to the pain points and establish how the features of the products help solve the company’s problems. And remember to keep it simple and concise while at it.

#4 Retain Clients with Annual Subscriptions

After converting the prospect to a client, the next stage you want to focus on is retaining the client for as long as possible. One of the most effective methods of retaining customers after purchasing the SaaS product is to leverage the annual subscription option.

There are usually two types of subscriptions available to clients signing up for a SaaS product. These include Monthly subscriptions and Annual subscriptions. Many SaaS providers prefer the monthly subscription as it is a means of recurring income and usually higher (in amount).

However, the annual subscription works well for customer retention. This is because, first off, the annual subscription comes at a discounted price. This means that clients will find it cheaper and opt for it.

Secondly, the annual subscription model decreases the possibility of a client stopping to use the product. Who would stop using a product they paid a full year for? Lastly, the annual subscription model helps provide upfront cash for the SaaS provider and makes it easier to plan for the future and maintain the software effectively.

#5 Upselling and Cross-Selling is Part of the Game

After acquiring and retaining clients, there is a need to upsell or cross-sell to them. These strategies, seen by some sales experts as sleazy and unethical, are perfectly normal and acceptable, especially in the SaaS B2b sales practice. You get to provide more value for extra money while they get to enjoy the product better with more beneficial features and upgrades.

Upselling means that you try to sell a better or upgraded version of the product, with better features to the client. If the SaaS product is tier-based and each tier has different features and subscription models, upselling is a perfect tool for increasing your income or revenue from clients.

Before you attempt upselling, you can need to ensure that your client requires more features. This takes us back to the “getting the demo right” process. As your client’s business grows and evolves, there are new frontiers to discover and new problems may arise from the process.

You need to check if your products have enough features and upgrades to help solve these new problems. If yes, reach out to your client and let them know that you can continue to help them solve their new problems.

The difference between this process and the previous “getting the demo right” process is that you don’t have to do a lot of talking. The client has already used the product and can confirm its ability to solve problems. With this upgraded version, you only need to do a little talking to get the client on board.

#6 Use Feedbacks from Clients

For you to successfully upsell to your clients, you need to ensure that your products can continually solve their problems. That is one of the defining factors that determine if your attempt at upselling will be successful or not.

However, one primary means of developing a SaaS product that can continually solve client’s problems is to collect and use feedback from clients. Even if you don’t have plans to upsell your SaaS products, the software cannot remain static, you need to improve and upgrade many of its features.

You cannot know what features to improve upon or the type of improvement that each feature needs unless you talk to people who use the products; the clients. Clients use these products regularly exploring different features at the same time in a quest to solve business problems and create value.

The ability of these features to solve these problems creates a continuous use case for the product. Once the product stops solving problems or does not offer effective solutions like before, the relevance of the product starts to decline, and you may start losing clients.

Therefore, if you want to retain and upsell existing customers while acquiring new clients, the best way to go about it is to collect feedback from clients, use this feedback and comments to improve the features of the SaaS product.

#7 Use a CRM

If you have paid attention to the SaaS sales cycle, you will notice that the processes and cycle are a bit long. Therefore, there is the possibility of salespeople forgetting certain details and conversations. However, when you forget some details about the sales process, you may end up losing clients. This is because clients spending a sizable amount of money on SaaS products expect a certain level of attention. Failure to effectively provide the support (due to forgotten details) may lead to a bad customer experience for these clients.

This is the reason why you need a CRM. A CRM helps you keep track and store even the minutest details about your clients. The system allows you to know your clients better and ensures that you serve them as well as they want to.

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SaaS Sales Strategy

To get the best SaaS sales results, there is a need to combine the sales process with an effective sales strategy. While the sales process is more of an individual thing that the salesperson needs to work on, the sales strategy is dependent on the high echelon of the SaaS provider’s management.

The following are tested and trusted SaaS sales strategies that have worked for many SaaS B2B organizations and providers.

#1 Selecting a Befitting SaaS Model

The first thing a SaaS provider needs to do is choose the SaaS model that best reflects its products. The model selected will determine a lot when it comes to the operation of the SaaS business and the sales aspects.

The model selected determines the number of sales professionals the company needs, the type of clients you target, and how you relate with them. The model selected also affects the way you serve your clients and how to close business deals with them.

There are three types of SaaS models. These models include transactional sales, enterprise sales, and customer self-service sales. You need to understand your organization before choosing any of these models, but ultimately, you need to know when to switch from one model to another depending on the evolution of the business.

Transactional sales

In this model, you are selling the SaaS to small and medium businesses over the phone or through business meetings and contracts. This model is very popular as it offers an incredible amount of scalability that you may not get with other models.

In this model, there is a need for a sales team, rather than a salesperson. This is because the client requires a more customized and specialized offering and the cost of the SaaS, in this case, is usually huge. The members of the sales team are usually picked from the marketing team, and they must have undergone pieces of training, possess the ability to meet monthly and quarterly set quotas, and have the power to offer discounts or tiered subscription models to clients.

Customer Self Service Model

This model works with the price of the SaaS product is low, but you are serving a wide range of clients. An example of SaaS products that use this model is Medium or Spotify. Because the ASP (average selling price) is low in this case, the model places more emphasis on making more sales and raking in more revenue.

The major strategy used by this model is the free trial period. Customers (who are most likely individuals and small businesses) are encouraged to check out the product through the free trial period. After the free trial ends, the provider urges clients to subscribe to the paid option to continue enjoying the software.

This model doesn’t require a sales team or salesperson. It usually relies on the website to communicate with clients and have them make their choices.

Enterprise Sales

This is the last SaaS model and it works for SaaS products that are costly and sold in low volumes. This means that the model is not targeted at making huge sales volume. The SaaS providers that adopt this model usually offer state–of–the–art solutions with fully specialized functions and features.

Due to these features, the salespeople usually spend a long time with prospects, explaining how the software works, the ability of the software to solve problems, and the features of the software that allows it to fit perfectly into the company’s offerings.

The sales process for this model usually entails having a question and answer session with prospects, proving a demo presentation, and meeting with executive stakeholders in the prospect company.

As the name suggests, this type of SaaS model is used for large corporations and enterprises that use special, complex, and niche SaaS products. These types of clients usually have the wherewithal to afford the cost of this SaaS solution, therefore sales teams are not worried about their finances, all they have to do is establish that the enterprise needs the SaaS product and convert them from prospects to clients.

As expected, the sales team will require the presence and expertise of other professionals such as product managers, engineers, and executives to successfully answer all the questions posed by the prospect.

These three are the available models for SaaS providers to choose from. To help providers choose the right model, the provider must establish its ASP (average selling price). This price helps the SaaS provider identify the type of clients that uses its product and by extension the befitting SaaS model to actualize the sales goal of the business.

#2 Identify your Target Audience

You should bear in mind that the SaaS model selected will only help you identify the best sales process to use. For this sales process to work, you need to understand your target audience and work with their expectations and aspirations.

One of the key ways to work with your target audience’s expectations is to create a persona for them. a persona is a brief description of your target audience while highlighting their goals and possible problems that could affect the achievement of these goals.

The creation of the persona helps to understand the problems facing your target audience. After establishing the problems, you need to create a value proposition. What this means is that you need to identify how the SaaS product helps the target audience solve their problem.

#3 Create Criteria for Qualified Prospects

You need to understand that the target audience is a pool of prospective clients. You may not be able to serve all the prospects within the target audience. However, what you can do is select the ones you can easily serve with your SaaS product.

Also, a lot of time and financial resources go into the sales and marketing process. Therefore, salespeople need to have a limited list of prospects they have to work on.

This is why you need to set qualification criteria for prospects within the target audience. These criteria will be in form of questions drafted and answered by the sales team. The answers to these questions help you identify the ideal prospects with high chances of conversion.

#4 Have a Sales Playbook

SaaS sales are like a football match, you need to go into the field with clear and effective tactics. One of the mistakes that salespeople make is that they go out to meet prospects without a detailed and well-thought plan. Every serious sales team or department should have a playbook that contains marketing techniques such as call scripts, email templates, techniques for closing deals, and many more.

Not only should these techniques be tested and trusted, but there should also be a form of peculiarity or originality to it. This means that it should be original enough that prospects can easily attribute each approach to your business only.

#5 Set Targets for your Sales Team or Salesperson

Because the human mind can achieve a lot when there is motivation and the best way to motivate people is to set goals and objectives for them, your sales team needs goals to perform excellently. The sales process explained earlier will only work when the salespeople have a goal they are working towards.

The target or goals set for your sales team could be in terms of the number of new clients acquired or the total amount of revenue raked in. You should also set a system for measuring the achievement of the goals.

You can opt for a weekly, monthly, or quarterly system. However, you should ensure that the system selected is realistic for your SaaS model and the type of clients you work with. For instance, it would be absurd to choose a weekly system when you are dealing with large corporations or using the Enterprise Sales model.

#6 You need a Good Customer Support Program

One of the things that will do your SaaS sales process and strategy a world of good is to have a functional and responsive customer support system. While this in itself isn’t a sales strategy per se, it has the potential to increase sales considerably.

This is because a good customer support system ensures that you can help out your existing clients whenever they have any problem operating your SaaS product. This makes a good impression on them and makes it easier for you to upsell upgraded versions of the product to them.

Also, you get a free PR on your products, as the word of mouth goes around about how good your products are and the level of support you provide clients with. You are in huge luck if this client has a lot of influence in the industry or their niche.

Lastly, many clients consider the availability and responsive nature of a provider’s customer support system before deciding to purchase a SaaS product. Therefore, a vibrant customer support system could make or break a deal, especially with large corporations and big businesses.

#7 Use Metrics

It is important to continually keep track of the progress made with your sales and marketing effort. This is how you know the rate at which you have achieved the goal set, and helps you create a viable plan for the coming weeks or months.

One of the best ways of going about this is to use key sales metrics. These key metrics are pointers and trackers of the progress made. You can use automated systems to measure these metrics. However, if you cannot afford them, there are manual metrics that you can use. We will discuss more them in the next section.

These are the tested and trusted sales strategies that SaaS providers across many industries have used to curate an effective sales process for their products. You need to enact these strategies at the management level as they will combine with the sales process effort of the salesperson.

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SaaS Sales Metrics

The following are a few important metrics that every serious SaaS provider must use to measure its progress in the sales department. They include;

#1 Churn

Churn or Churn rate is a metric for calculating the number and the rate at which you lose customers every year. To get your churn rate, all you need to do is divide the number of customers you have lost by those you started with at the beginning of the year. The result could either be positive, negative, or zero.

The positive result means that you have lost more customers than you have gained. Zero means that you have not lost any client throughout the year and negative means you have gained more customers during the year than you lost.

#2 Monthly Recurring Revenue

Also shortened as MRR, the monthly recurring revenue is the total amount of money that the SaaS provider expects as income at the end of every month. This is calculated by adding all the fees paid on the monthly subscription model.

Another one that looks like MRR is the ARR which stands for the Annual Recurring Revenue. This is the total amount of income that the SaaS provider expects at the end of the year, and it comprises the income generated through annual subscriptions.

#3 Net Promoter Score

This is another metric that deals with customer experience. The NPS measures the rate at which your clients enjoy your SaaS products and will help you market them through word of mouth.

To calculate NPS, you need to ask a set of questions bordering on the usage of your SaaS product and how clients enjoy using it. These questions are answered on a 0 to 10 rating scale.

Customers that give answers ranging from 0 to 6 are termed detractors. These are clients who are not satisfied with your product’s offering and would not provide a positive review when asked. Answers ranging from 7 to 8 shows passive clients. These clients enjoy using your product but they might go with another SaaS product if it offers better features.

Clients with answers between 9 and 10 are tagged promoters. This set of customers enjoy your product to the extent that they are loyal and would offer to introduce the product to other people.

To have a total overview of your NPS, you need to subtract the total percentage of detractors from the total percentage of promoters. The result can be either -100 or 100. If the result is low, it means that you are losing more customers than you are gaining.

Regardless of the amount of MRR and ARR generated, a low NPS is a problem that must be solved as fast as possible. On the other hand, a high NPS shows that the SaaS provider offers a great SaaS product to its clients and is ready for sustainable and consolidated growth.

#4 Sales Qualified Leads (SQL)

This refers to the number of leads that are ready to talk to a salesperson. This doesn’t mean that they are ready to buy the SaaS product. They have heard about the product and taken certain steps to indicate their interest in talking to a salesperson about the product.

There are many ways of measuring the SQL of a SaaS product. However, the most popular option is IBM’s BANT system. This system considers certain factors when determining the sales qualified leads.

Some of the factors considered are the availability of a budget for the product, a purchasing timeline, authority to make purchases, and the need for the product. If all of these factors are present, then it is time for a salesperson to meet with the lead.

Other SaaS sales metrics that you can use include lead velocity rate, customer acquisition cost, revenue per lead, and demo to trial ratio, among others.

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Conclusion

As we have discussed, the sales process in SaaS is different, but the essence remains similar to that of other sales processes; to provide value. The tips and strategies shared are sure ways to optimize your SaaS sales effort to provide optimal value to your clients while raking in huge profits and revenue.

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