SaaS Sales Process
The majority of SaaS companies depend on subscriptions. Although with PLG, the trend is self-service, 96% of product-led companies have a sales team, according to PeerSignal.
This article will outline what a SaaS sales process looks like, tools to use, strategies to employ, and more.
What is SaaS Sales?
The practice of providing subscription access to cloud-hosted software products to enterprises, prosumers, or consumers is known as SaaS sales. Solutions developed for business clients are intended to address numerous pain points and increase the customer’s firm’s success. The main aim in SaaS Sales, similarly to any B2B sales, is to make your clients more successful, whether that means saving them time, money, or boosting their capacity to earn more revenue. Even though products with B2C business models, such as Spotify and Netflix, are also included in SaaS sales, customers in the B2C market often have lesser budgets and want to pay on a monthly basis. However, customers in both B2B and B2C SaaS often access the product via an online portal or dashboard and pay a monthly or yearly subscription fee. In most cases, the SaaS sales process begins with the requirement to provide customer assistance. It continues with new user onboarding and concludes with a range of renewal alternatives for consumers to select from, based on their specific circumstances.
To put it another way, SaaS sales are the intricate process of selling full-featured software as a service that is licensed for usage via the internet. Having an attractive sales process, on the other hand, is not easy, and you should be aware of the fact that many things may go wrong along the way to persuading your prospective client to sign up for your product.
SaaS Sales Cycles
The sales cycle is the process of moving from prospect to concluded contract. To create reliable revenue estimates, you must first understand the whole SaaS sales cycle. There are various important considerations to make.
The length of a SaaS sales cycle is influenced by many factors including the next five:
- Customer type: Small firms often have a shorter sales cycle since they make buying choices rapidly. Enterprise-level clients, on the other hand, have more established systems for authorizing purchases, which typically require approval from several decision-makers. This slows down the sales process.
- Breaking into new markets: Breaking into new markets might cause sales staff to spend more time presenting your brand and discussing product benefits to new clients, which can lengthen the sales cycle. It is, nevertheless, an inescapable requirement for success in new markets.
- Product kind or complexity: If your product has a lot of features, prospects may need a lot of education and advice before deciding to buy. This can also contribute to longer negotiating sessions, lengthening the cycle.
- Product pricing: The longer the SaaS sales cycle means the higher the product price. The consent of various decision-makers, as well as significant budgetary space, is frequently required for more expensive items, which might create delays.
- Trial periods: Prospects frequently prefer to take advantage of the free trial time before making a purchase decision. If your product has a lengthy trial period, it might considerably lengthen your sales cycle. Furthermore, if the trial time is too long, your prospects may become complacent, therefore it’s critical to remain in touch with them in order to sustain engagement and interest.
The six stages in the sales process:
The generation of leads is the first step in every sales process. The majority of your leads for your SaaS product will come from the internet since anyone looking for a SaaS solution would go there first. The following are some of the finest strategies to create leads online: Social media, blogs, online advertisements, SEM, SEO content, and YouTube videos are just a few examples. Starting a blog on your SaaS website allows you to publish content that promotes your brand while also offering useful information to potential clients. Your search engine results will increase as a result of implementing a SaaS SEO approach, resulting in more inbound organic traffic. You may also advertise your blog on social media to increase its visibility and attract more visitors. And more visitors to your site equals more leads.
Prospecting is similar to lead generation in that it includes a salesman reaching out to a company one-on-one. A sales pitch piques the curiosity of consumers who may not be familiar with your SaaS firm but might benefit from your product. Prospecting, for example, is when a salesperson sends a cold sales presentation to a prospect on LinkedIn via direct messaging. Another sort of prospecting is outbound emailing. Your marketing activities will increase at this time. Content marketing, social media, and online advertisements may all help you get on the radar of your potential client.
When you have a steady stream of leads, go through them to find the ones who are most likely to buy your SaaS product. This is where qualification comes into play. You want your salespeople to focus their efforts on prospects who are more likely to become paying clients. A qualifying activity may be a salesperson calling leads who have signed up for additional information. This type of marketing might aid your sales staff in weeding out leads who aren’t interested in the goods. You might try employing a lead scoring program to collect data on your visitors and score them based on their chance of converting.
After you’ve validated your leads and set up a one-on-one meeting, you’ll need to show how your SaaS solution will address a specific problem. Your salespeople will get the opportunity to discuss the product in greater depth. Furthermore, this stage will aid in the identification of the prospect’s challenges, allowing you to better position your SaaS product to give a solution. Because SaaS goods are rarely offered face to face, a framework for addressing sales strategies over the phone will be required. To address any hesitations that a client may not be articulating, your sales staff will need to pick up on every nuance and intonation of their speech.
At this point, salespeople will need to have a thorough understanding of the product. They’ll have to respond to any questions a prospect may have by providing answers. If a client doesn’t believe the SaaS product is worth the price or the time it takes to adopt it, you’ll need to show them how valuable it is. Any obstacles may be overcome by understanding the prospect’s workflow pain points. Your sales agent must first listen and comprehend any issues your prospect may have regarding product fit or cost. Reps must delve deeper to identify the issues if the concern is regarding product fit. If the issue is one of pricing, sales representatives should explain how the value of your product surpasses the cost.
Your sales staff will provide papers and final offers at this stage, re-negotiate any last specifics, and sign off on a fruitful future with a new customer. While this step may vary depending on the industry, it is critical for all SaaS organizations to establish a strong connection with their customers so that they feel they are receiving more than just a product but a business relationship. In an ideal world, you’d have done it without giving the consumer a discount, as this might lead to problematic and disloyal customers. You may always offer them a free month if they agree to pay annually.
Customer retention is the final stage of the SaaS sales process, and it is critical for every SaaS firm. The customer’s interaction with you does not cease when you close the sale. Customers are retained by the greatest SaaS firms by providing them with next-level customer service, extensive training, and a variety of beneficial upsells. This keeps clients interested in your product and aboard for a longer period of time. For post-sale requirements and inquiries, make sure you give exceptional customer support and, if feasible, success coaching. You may also provide new users with training, solicit comments, reviews, and referrals, or upsell existing clients to enhance their subscriptions.
SaaS Sales Models
Customer self-service is a SaaS sales model in which customers must be willing and capable of serving themselves. This approach works best when offering SaaS at a low price point and in large quantities. Netflix, Spotify, and Medium can be given as examples. Self-service SaaS sales models cannot sustain a complete sales crew, and customer service is frequently inadequate. Self-service works well with software that is simple to use and does not require sophisticated business procedures. In order to attract clients, the self-service model frequently employs free trials or a freemium model. Individuals who sign up for services online are more likely to be users. The sales pipeline can still exist in the absence of sales communication.
Customer self-service models include the following characteristics:
- Sales: There will be minimal or no sales.
- Marketing: It promotes awareness by providing conveniently available instructional information and driving the entire purchasing process through automation.
- Support: Automation and tools for simple onboarding and upgrading are included. Try to empower consumers to address problems on their own.
This model’s SaaS items are offered in low quantities at high prices. This sales approach necessitates the establishment of a specialized sales department to locate, nurture, close, and support customers. Reps will offer product demos, meet with key stakeholders, and answer a broad range of inquiries, many of which are technical in nature, over this lengthy sales cycle. Enterprise SaaS sales representatives must be well-versed in the product’s technical specifications. To obtain the knowledge required to close such high-value sales, they often collaborate closely with engineers and product marketers. Target customers for business sales are often huge corporations with the financial resources to acquire high-priced, specialized SaaS products. One key problem is the lengthy sales cycle, which can result in huge opportunity costs if the deal is lost. To convert and maintain high-value customers, enterprise organizations frequently employ numerous sales teams that are supported by product marketing and other resources. Offerings are typically quite complicated, with a feature-rich portfolio of solutions addressing critical, core company activities. The biggest issue of selling SaaS at the enterprise level is ensuring that you can ensure the deployment of every component of the customized SaaS for such a large customer. When selling SaaS to a large corporation, multiple teams must be involved in the selection and implementation process. When you believed you’d sold the decision-maker, another team finds out and scuttles the sale. To avoid issues and similar obstacles, it is critical to request that any stakeholders be included early in the sales process so that the transaction may be adapted to each team engaged before it breaks apart.
Enterprise Sales Model include the following characteristics:
- Sales: Representatives concentrate on a small number of target prospects who are directly supported.
- Marketing: High-end marketing addresses relationship-building, trust, education, and brand recognition. More advanced sales tools are utilized to target and acquire new clients more efficiently.
- Support: Priority technical and sales assistance suited to the customer’s individual needs.
The majority of B2B SaaS revenues are driven by a sales-led approach. Transactional sales is the most frequent sales-led strategy. The primary focus in this strategy is on lead generation and creating the pipeline for new prospects, as well as supporting the SaaS sales process with content marketing. As their businesses develop and expand, many self-service SaaS enterprises opt to transition to the transactional model. Because software at this level is more expensive, purchasers will need more customized attention, which means you’ll need a sales crew. Sales representatives typically have some autonomy. It may provide certain obstacles, such as the requirement to focus on the highest quality leads in order to enhance salesperson efficiency.
This sales model has a higher price point. As a result, there are increased expectations for commercial connections, such as signed contracts or the capacity to communicate with a human when an issue arises. Model is also distinguished by high-volume, efficient sales and support operations, short sales cycles, and quick onboarding. resulting in customers who expect more from you. Signing contracts, receiving periodic updates, detailed documentation, and having access to support agents are examples of these expectations. With a larger number of transactions, transactional sales strategies are high-risk and high-reward.
Transactional Sales Model include the following characteristics:
- Sales: Online content and automation help inside sales staff succeed. Additional tools, training, incentives, and KPIs help sales reps be more efficient and close more deals.
- Marketing: In order to establish a pipeline and boost efficiency, highly qualified leads are supplied to the sales team. The buying is simplified thanks to educational material and automation.
- Support: Customers have access to customer support people as required, in addition to self-help tools, templates, and instructional information.
SaaS Sales Metrics
Analyzing important sales indicators after going through the sales process can tell you regardless of whether your efforts were effective. Many sales KPIs are used in the SaaS sector, however, the ones listed below are usually the most important.
Customer acquisition cost
This metric, often known as CAC, measures the cost of acquiring a new customer. Divide the cost of sales and marketing by the number of clients acquired during the same time period to calculate this metric.
Monthly recurring revenue
MRR is the monthly revenue that your company may expect from client subscriptions.
Customer lifetime value
This measure, often known as LTV, depicts the expected amount of revenue a client will generate over the course of the relationship.
Lead velocity rate
This measure indicates whether leads are arriving faster than income. If you’re looking to expand in the future, this is a useful metric to look at.
This metric tracks how many product demos lead to product trials and how many trials lead to closed sales.
The churn rate is an excellent indication of customer retention since it reflects the percentage of customers that leave each year. Divide the number of consumers you started with by the number of customers you’ve lost to arrive at a figure.
Sales qualified leads
An SQL is a potential leader who has indicated that they are ready to speak with a salesperson based on data.
The win rate is a metric that indicates how many leads your sales force has closed in a specific time frame.
Important SaaS Sales Statistics
- By 2021, the global SaaS workload is poised to reach 380 million.
- For 89% of SaaS businesses, new customer acquisition is the top growth activity.
- According to the SaaS sales benchmarks, software development companies with an annual growth rate of 20% have only an 8% chance of surviving.
- SaaS adoption in the healthcare industry grows at a rate of 20% per year.
- The corporate mobile SaaS market is predicted to reach $7.4 billion by 2021.
- SaaS organizations operate in over 100 countries.
- The forecast compound annual growth rate of the SaaS market is 18%.
- The average startup spends 92% of first-year revenue on customer acquisition.
- SaaS companies in the $7.5MM-$15MM range are among the fastest growers.
- The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn.
- The top growth activity for SaaS businesses is the acquisition of new customers at 89%, with renewals by customers in second place at 59% and upselling and add-on sales in third place at 46%. When the numerator of your quick ratio is growing that means your revenue is growing. It’s very important important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn.
Tools To Use for SaaS Sales
Businesses cannot exist, develop, or attract investment if they do not produce enough revenue. The quantity of admin and data management for sales teams has increased rapidly since more businesses generate sales online. Many salespeople, on the other hand, spend far more time building up and monitoring their sales funnels and procedures than they do actually working on completing transactions. Fortunately, there are a number of excellent tools and platforms available to assist in automating, improving, or simplifying the sales process.
HockeyStack is an end-to-end analytics tool for SaaS companies. With HockeyStack, you can track and analyze data from the product, sales, subscription revenue, and marketing in one tool and get access to hidden insights, such as the LTV of a piece of content, or the churn rate of each marketing channel along with users’ reasons for churn.
HockeyStack allows you to build dashboards with no code using any metric you need from any department!
Step-by-step user journey
HockeyStack allows you to access every single users’ whole journey without spending your valuable time on video replays. You can filter your users with every single session and user property, including LTV, job title, goals, segments, clicks, etc.
You can build custom dashboards using every revenue, product, sales, and marketing data you have using HockeyStack. We also have a template gallery inside our dashboard to inspire you.
Funnels and goals
An analytics tool cannot be complete without funnels and goals. What makes HockeyStack special is you don’t need any coding knowledge to set up your funnels & goals.
With HockeyStack you can use multi-touch attribution models to better measure each touchpoints’ effect on your overall revenue.
HockeyStack is really the complete package for your SaaS. You can create visually appealing surveys to get honest feedback from your customers, including churn, NPS, and pricing surveys.
We also have a wide variety of questions types that you can choose from, and surveys are completely free for everyone!
By connecting your Paddle/Stripe account with one click, you can use HockeyStack as a revenue analytics tool for free! Setup every single revenue analytics dashboard you need + better understand what affects your revenue.
HockeyStack has a free forever plan and 3 paid plans. Paid plans have a 14-day trial with a 30-day refund guarantee.
You can check out the pricing page here.
- Crisp Chat
- Salesforce (coming soon)
- Zapier (coming soon)
HockeyStack Pros and Cons
The unique benefit of HockeyStack is its ability to unify your marketing, revenue, sales, and product data using no code. This allows you to uncover unique insights that you wouldn’t be able to by using multiple tools as they cause you to have fragmented data.
- You can integrate with Stripe, Paddle, and Hubspot and build every single dashboard that you can think of, using all sales, marketing, revenue, and product metrics.
- You can create funnels, goals, and surveys, which are rare to get with other tools on this list.
- You don’t need any developers, tracking is cookieless, and the script is small, so it doesn’t increase your site loading time.
- Has a free plan.
HockeyStack generally lacks reporting features as it’s not focused on agencies and other reporting-based businesses.
- The tool lacks some integrations, such as Salesforce and Zapier. (on the roadmap)
Lusha is a sophisticated data enrichment tool for finding contact information such as email addresses and phone numbers. You may get contact information from social network accounts with the Lusha Chrome addon.
For modern sales teams, Mailshake is a sales interaction software. All in one sequence, on one dashboard, you can send tailored cold emails at scale and establish tasks to interact with prospects through phone and social media.
Lemlist is the first email outreach tool that can produce tailored graphics and videos automatically. Make your cold emails very tailored and personable from the outset to kickstart client connections. It can automate and streamline your follow-ups, as well as put monotonous chores on autopilot so you don’t miss a beat.
Hunter is a cloud-based email search engine that assists organizations in locating and verifying professional email addresses from domains, firms, or a specific professional on the internet, among other things. Hunter scans the internet for publicly available professional email addresses and indexes them. With simple but powerful capabilities, Hunter makes it exceedingly easy for sales, recruiters, and marketers to reach out to other professionals.
The sales process for your SaaS product is critical to a founder’s and startup’s success. You’ll be in charge of the majority of business development if you can handle sales. Sales abilities, of course, do not take the place of high-quality development or decrease client expectations. It’s also crucial to investigate the sales cycle for SaaS businesses. There are several SaaS sales cycle stages, and organizations must personalize their activities to each prospect’s precise place. It is feasible to increase conversion rates by properly managing the sales process. Remember that the SaaS sales cycle might take a long time since organizations take their time making decisions.
The SaaS sales process is described as a potential customer’s journey from the time sales talks begin to the time they sign up for the service and eventually become a client. Your SaaS sales process is a series of steps you take to convert website visitors into paying customers.
While many B2B organizations have lengthy sales cycles and large deal values, SaaS solutions often sell in 14 to 30 days and have lower deal values. Even in B2B, they are frequently self-serve for the majority of the purchasing process.
According to the most recent research conducted in the United States, the average compensation of a salesperson at a SaaS firm is more than $60,000.