This guide will explain the fundamentals of SaaS sales to anyone who is either starting a new sales job in a SaaS organization or is making a SaaS product. You will be informed about the various strategies of marketing this specialized software, including commission fees, revenue periods, approaches and standards, and what you can anticipate from the work.
What is SaaS sales?
Offering web-based software to customers is the activity of SaaS sales. Salespeople focus on bringing in new clients as well as trying to increase sales with existing customers. Prompt and attentive care are essential for convincing the customer to complete the sale, particularly for Software as a Service salespeople who usually have higher priced offerings.
If you are new to selling SaaS products or just considering entering into this field, you may not be familiar with what a SaaS product is. However, it’s highly likely that you’ve already taken advantage of a Software as a Service product without actually realizing it.
What is SaaS?
SaaS stands for software as a service. This is a form of software that is hosted, protected, and maintained by a single provider. It can be found on the internet, quickly adjusted, and is provided with assistance from the brand’s own product technicians and customer satisfaction crew.
Do you recall the times when you took off the wrapping on the CD-ROM, put it on your computer, and you were only able to use that program with that computer? Those days are gone. An external provider hosts, safeguards, and keeps SaaS updated.
SaaS is often more economical to get started with than standard software programs, simpler to upgrade, and can be better incorporated with other applications. The end result is a sophisticated, easy to use, and ever-changing product.
Basic SaaS Sales Strategy
No, there is no consistent approach to selling software-as-a-service since each product is designed to address different challenges. Nevertheless, every SaaS rep model should abide by certain strategic principles.
1. Creating a customer avatar
In other words, the customer avatar you create represents the ideal people that you are aiming to attract as customers. Unlike traditional marketing approaches, creating a SaaS marketing sales plan requires a more specific approach.
SaaS offerings such as SalesForce, Dropbox, Slack, and Rake are mainly geared towards businesses, rather than individual buyers. In order to provide the best service, you will have to ask a series of pertinent queries.
These questions can be:
- What problems are you solving?
- Can your product decrease your customer’s expenses?
- Can your product increase your customer’s profits?
- How can your product streamline your customer’s operation?
- Who makes the financial decision in the company?
- How can your product help with the growth of your customer’s business?
Marking down these queries can aid you in attaining a precise description of the demographic you aim to reach. In that manner, it should be simpler for your software-as-a-service sales representative to devise an in-depth plan for obtaining them.
The questionnaire mentioned that you should aim your approach at the individual who has ultimate authority over the company’s funds. Take into account psychological data when you assess the situation.
Before you are able to create a complex persona of your customers, you must first acquire an extensive understanding of who you are targeting. Do thorough investigations, questioning, and collecting of information to be as precise as achievable.
2. SaaS Sales Funnel
Now that you have your desired customer in mind, it is time to plan out your approach to selling your software as a service. In comparison, running an e-commerce business and a software as a service (SaaS) company have similarities but there are also distinct variations.
You might’ve heard of AIDA, which stands for Awareness-Interest-Desire-Action. Consider this like a pyramid that is turned upside down, with Attention positioned at its highest point, and Action placed at the very bottom.
With every stage, the funnel gets narrower and narrower. The challenge lies in getting the customer to progress from one step to the next until the ultimate purchase is made.
So let’s break AIDA down.
- Awareness – this is where your customer becomes aware of the service you’re offering. This awareness could’ve come from ads, blogs, social media, or word of mouth.
- Interest – here, the customer evaluates your product and compares it to other similar services. They’re trying to determine whether the software is the best for their particular business.
- Desire – the prospect has moved down the funnel and is one step away from acquiring your service. They’ll visit your sales page, evaluate customer satisfaction, or would even reach out to your SaaS sales rep.
- Action – this is where your customer decides to acquire or decline your service. Your BDM will need to be on top of their game to close out the deal.
In e-commerce, the majority of people reach the Action stage since they have succeeded in selling an item. Certainly, they would still take care of their customer in order to get them to purchase again. The process normally only includes the four steps listed.
The procedure for selling software-as-a-service (SaaS) requires a few more steps than other strategies. Let’s look at them.
Trial or Demo
Many SaaS businesses offer a restricted demo of their product to demonstrate the program’s capacities. Experts disagree on how long this will take.
Some advocate a 30-day period of free trial, while others maintain that it should be shortened to two weeks. Close CEO Steli Efti heavily advocates the latter point. He argued that the shorter the testing period, the less likely the user will become disoriented in the SaaS purchasing cycle.
Once a transaction with a consumer is complete, the next move should be to cultivate loyalty. This is achieved by connecting with people, building relationships, facilitating neighborhoods, hearing out what people have to say, and making modifications to the interface.
The significance of faithful clients is immense for a SaaS company, as that guarantees their customers will keep coming back.
As well, when a customer is dedicated to your product, it is simpler to encourage them to promote it to their colleagues in the workplace. Spreading the word about your business through others can be a powerful way to find new customers, which could help to expand your clientele.
3. Upselling to your customer through added value
This section of the SaaS sales process is complex as the buyer is already knowledgeable about your product. Remember, they know exactly its capabilities. They may not be willing to pay more due to their satisfaction with the subscription model that is already established.
Yet, when performed correctly, upselling is tremendously lucrative for a SaaS business. It is far more difficult to gain new customers than it is to market products to existing ones.
How can you encourage customers to upgrade their current plan even though they are already content? An effective tactic to increase SaaS sales is to make use of the data already present in the product.
Check and track how they’re exploiting the amenities provided in their membership, and contemplate if advancing to a more expensive membership could be advantageous in their particular situation. It is possible that some of the features only have a validity period that lasts for 15 days. It appears their present plan doesn’t suffice to handle the recurring monthly duties.
An alternative approach is to show customers that selecting the premium option can provide them with additional financial gain. Tell them in detail the advantages of switching from their current plan to the premium one. Point out the worth of the advanced feature to validate the cost.
Foundations of an Effective SaaS Sales Rep
It can be surmised that the success of a SaaS sales cycle plan is reliant on how well the SaaS sales personnel do their jobs. Your Sales Development Representatives and Business Development Managers should be working together all along the SaaS sales model, helping the customer to progress in an organized way at every step.
Despite their separate obligations, the two roles are founded on the same principles. Here are three of them.
1. The best SaaS sales rep understand it’s a number’s game
A person in the sales sector of software as a service must demonstrate endurance in order to be successful. WideAngle has declared that a SaaS sales representative should conduct at least 50 conversations per day. It typically requires about 18 attempts to make contact with a potential customer. Moreover, call-back rates are typically around one percent.
Once a link has been created, you are almost in. Advise your software as a service sales employees to be repetitive and expand their amount in accord with the previously mentioned phone average.
2. Identifying the right customer for your SaaS product
It is critical to think about the correct customer in addition to the amount of customers when developing your clientele. It’s not enough to close a deal. Remember, the SaaS sales model is subscription-based.
What occurs when the individual you finalized the deal with does not extend their membership? You will see a higher rate of customers canceling their subscriptions. This could be a death sentence for a software as a service company if not taken care of.
Make sure your SaaS product is providing the correct services for the commercial industry to counter this. The significance of initially constructing an exhaustive customer profile is the reason for this. The SaaS sales representative team can easily recognize who is a suitable choice.
If the business and you are well suited for one another, then it’s likely that you will be working together for a long time. It would be advantageous for you to make an additional sale to them, thus increasing your monthly income.
3. Scheduling and performing demos
If your SaaS sales representative has surmounted the first hurdle, it is time to set up and give a demonstration. What is the appropriate time to give a demonstration of a software as a service (SaaS) product?
Here are a few tips to follow:
- A general rule of thumb is within five business days after the call. Do not exceed 10 days as your prospect might’ve lost interest, found other services, or completely forgotten about your product.
- Keep the demo short, around 30 minutes or 45 minutes. Highlight the best features that will help your customer. Do not overwhelm them with features.
- Send an email reminder for the demo to decrease the no-show rate.
- Ensure you’re performing to vital decision-makers.
- Connect the product with the business. SaaS sales rep tends to put the product on a pedestal and not much else. Always make it about their business. For instance, identify a problem of the client then use the product to solve that problem
Why is SaaS sales different from other types of sales?
When functioning in direct or channel selling, one can be expected to offer a physical item or a service that is provided shortly after the buying process is finished.
SaaS does not work that way. Since SaaS is backed, managed, and designed by an outside firm, typically it is costly, necessitating a more extensive sales cycle and additional contact points from Sales and Marketing earlier than the consumer is prepared to purchase.
Marketing looks after each possible customer until they are ready to make a purchase. Then, a sales representative contacts them to decide the next move. Although a lead may have been identified as being ready for sales, this does not necessarily mean that they are prepared to make a purchase or to receive a demonstration.
SaaS sales staff have to make it unmistakable what advantages and components their programming offers. It is essential to customize each speech to fit the requirements of each potential customer. Representatives must also be knowledgeable in the operations of the software to show and solve problems with the product when giving presentations.
It is not uncommon to have engineers, executives, or product marketers present in meetings to facilitate the sale of a complex SaaS product. Realizing when it is appropriate to request assistance is an indication of an experienced SaaS representative.
SaaS Sales Salary
Due to the fact that SaaS reps need an in-depth knowledge of the software, its development plan, and any common queries, their compensation package typically includes a higher base salary and commission than reps in other areas of the industry.
Here are three benchmark studies to illustrate the average salary for SaaS sales reps:
- Job aggregator ZipRecruiter calculated the national average base salary to be $78,898 for a SaaS account executive.
- Workplace hub Glassdoor calculated the average base salary for a SaaS specialist to be between $24,000 and $96,000.
- And The Bridge Group, an inside sales consulting firm, calculated the average base salary for a SaaS account executive to be $79,000 — with on-target earnings of $158,000.
The basis of a triumphant SaaS firm lies in having an accomplished SaaS merchant. You should always reward someone from your team adequately if you have one.
The findings in the report indicated that 43% of SaaS sales reps expressed that they would be open to resigning from their current job for a 10% pay rise. But compensation isn’t enough. You should also acknowledge the work of your team.
By taking this action, it will have a positive effect on their motivation while also aiding in improving your sales numbers. That’s hitting two birds with one stone right there. The role that SaaS companies have in their growth, expansion, and standing over time is immense.
THE PROBLEM: YOUR BUSINESS ISN’T GROWING AS FAST AS IT SHOULD!
Your sales have stagnated or decreased, and you cannot figure out why. Discover what is holding you back from achieving predictable sales growth in your business.
If you want to grow your business, you need a proven plan and framework. That is what you get with the 2X Your Sales Discovery Session.
Want to learn about a formula for Predictable Growth that will put your business on a 90-day path to 2X Your Sales?