Small and medium businesses turn to SaaS offerings as they mature and expand. A projection indicates that SaaS will become a $482 billion market with a CAGR of 21.7% in 2022.
However, leveraging SaaS sales requires following a unique SaaS sales strategy. It is because the sales process for SaaS differs vastly from that of traditional products.
By 2025, 85% of enterprise-level software will be delivered by SaaS businesses. The growth of the SaaS market and the trends in this domain will shape future performance and impact these forecasts.
By 2023, the SaaS industry is expected to be worth $208.1 billion, an increase of 17.5% from 2022. SaaS has grown from a small business to a thriving industry.
Many SaaS firms spend millions on sales and marketing, yet their growth remains stagnant. This boosts the demand for innovation to push sales.
When building a SaaS business, it is crucial to frame a well-developed sales plan that drives success. Read on if you’re a SaaS company owner looking to build a solid sales strategy!
Understanding SaaS Sales
Understanding SaaS sales is necessary to make a difference. It differs from selling a physical product because users need to be conveyed value. This involves integrating multiple teams. Ideally, the sales team would feed information to the support team, provide feedback to the development team, and collect information. Training in product management software can help all these teams stay on the same page and ensure seamless collaboration.
Therefore, SaaS sales usually demand a salesperson to put forward the product into the hands of prospective customers. This works in tandem with the marketing team. Ensure that the product reaches the hands of customers and prospects via your SaaS marketing efforts.
For instance, data from the ideal customer profile (ICP) by the marketing team should feed the sales team. To increase software sales, thoroughly understanding the total addressable market is important. Boosting your SaaS sales in 2023 will therefore need a unique approach — an unmatched strategy that puts your product forward positively.
Let’s get started!
Include short demos that add value
Customers would love to see what your SaaS product offers. And this needs running product demos. A SaaS sales team may begin by researching the common bottlenecks a customer’s faces and show how the product offers an ideal, cost-effective solution.
Try demonstrating the benefits that customers reap from purchasing your product. They may use only some options and features. So, try highlighting the missing points in your product. That makes your demos less salesy and more realistic.
Also, limit demos to 20 minutes by keeping them relevant while holding customer interest. Remember, the goal is to close qualified leads rather than generate new ones because a new one will require a thorough product understanding that requires more time.
Successful product demonstrations should quickly get into the meat of the presentation. Come to the key points as early as possible by beginning on a small note and then expanding to a broad overview.
Provide customers with free trials and other lucrative buying offers. Keeping the trial time shorter may make customers act faster to push for purchase.
Optimize sales calls
Try gathering all the necessary customer details before connecting to customers. This helps tailor sales calls for teams who can use key customer information at their disposal to provide value over a call.
Customers connecting to business through an online medium (webinars, websites, etc.) anticipate a fast, productive conversation with a sales representative. They would not appreciate rehashing the same information they already provided.
Therefore, ensure familiarizing with the lead by reviewing the following—
- Demographics information: Know where the business is located, its size and industry, and your lead’s position. This will help offer customized offers that can lure them into buying faster.
- Usage information: See if they already use a free or a trial version. If so, know what progress they made and what features they use the most. Also, know the frequency of usage to help them with return on investment.
Driving SaaS sales productivity is possible when salespeople use the available data and lead sales calls to drive fast, simplified sales.
Try upselling
Reselling to an existing customer is easier than converting a newly acquired lead. A marketing metrics guide indicates that the chances of selling to a new prospect range from 5% to 20%, while the same rises to 60% — 70% for selling to an existing customer.
Therefore, it makes sense to capitalize on this situation.
Selling a more expensive upgrade to your base service is an important upselling tactic in SaaS sales. But how does one go about doing this?
Here are some of the key factors to consider when upselling SaaS.
Timing: This holds the key to successful upselling. Selling at the right time can show the value of your product to customers. Only try to upsell if the client is happy with the service you’re receiving.
Do not push: Sometimes, a “no” is no. If customers do not show any interest in knowing about new packages or products, do not push. Being too aggressive with upsells might harm your connection with the consumer, eventually losing out on existing business.
Show the worth: Upselling requires being well-versed in the service and product offerings while showing value to customers. This will convince the consumer of necessary upgrades or new purchases.
Upselling and cross-selling work effectively when the sales team targets satisfied customers. Gauge customer satisfaction by integrating the marketing team’s input for CSAT score, NPS, etc.
When you successfully implement a robust upselling strategy, the following gains are visible —
- Increase in the average order value and CLV
- Enhancing brand image with repeat buyers, making them loyalists
- Drive positive word of mouth that further simplifies sales
Offer a free trial period
The typical method of SaaS product sales involves signing up new customers via a free trial. Offer free signup post demonstration, offer registration, and provide them with all the features during the trial period. Once customers try the product for free, they will buy it if they find a real value.
Asking for credit card information when offering free tree trials may increase the likelihood of losing them as subscribers and customers. Alternatively, not doing so may lead to the creation of multiple accounts that exploit your SaaS servers. Instead, offer multiple payment options like Paypal, Skrill, etc., to smoother the signups for a free trial period.
Let’s take a quick look at it.
Track key metrics
You need to track several SaaS sales metrics to ensure that sales teams hit the right spots.
When tracking such efforts, it is best to consider the following —
1. Churn rate
This rate shows value in the percentage at which your SaaS brand loses customers yearly.
Formula to calculate churn rate:
Churn rate = [The total number of customers you lost / The initial number of customers] X 100
Your churn rate should be low. The best-case scenario is a churn rate in the negative. It simply indicates that your annual customer gain exceeded your annual customer loss.
2. Customer Acquisition Cost (CAC)
Calculate customer acquisition cost to plan the budget you need to bring in new customers.
Here’s the formula to calculate CAC —
CAC = Cost of sales and marketing/Total no. of new customers
Low CAC would mean you effectively use your sales and marketing resources. This number also helps gauge the potential to scale such initiatives and increase sales.
3. Win Rate
This KPI helps identify the pace with which your sales team drives conversion.
The formula to calculate win-rate KPI —
Win Rate = [ Closed sales opportunities / (Total opportunities + Closed deals) ]
Conclusion
A winning SaaS sales strategy will go beyond the factors mentioned above. It is best to analyze various SaaS sales phases in light of the above considerations.
Help your sales team create a workflow for the SaaS sales process by breaking it down to the smallest possible details. This help provides high-quality, customer-centric selling where the acquisition process remains short and to the point.
Consider providing your sales staff with extensive training that strengthens their skills and keeps product knowledge up-to-date. Offer them authority over discounts, freebies, and usage extensions to close leads faster.
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