While the idea of centralized hosting of software products dates back to the 1960s, it started gaining traction only a decade ago or so. Nowadays, more and more vendors are switching to the SaaS sales model and bill their clients on a subscription basis instead of charging a one-off payment.<\/p>\n\n\n\n
So, what does this SaaS sales definition mean? And how is SaaS different from any other industry?<\/p>\n\n\n\n
For one thing, selling SaaS is still more challenging than selling physical goods or even locally run software. Customers often have trouble understanding the true value of a product if they can\u2019t get full possession of it. It\u2019s easier to see what you\u2019re paying for once you actually touch it. With SaaS products, you can only use software as long as you\u2019re making your regular monthly, quarterly, or yearly payments. <\/p>\n\n\n\n
Other than that, selling software as a service may include such unusual elements as free trials or different pricing tiers and, therefore, different versions of one product. This can stretch the sales cycles by weeks or even months, while sales reps need to do more qualification work to better understand clients\u2019 needs. <\/p>\n\n\n\n
Due to the complexity of products, clients might require more training and educational work before they understand how everything works in your product. And how it will benefit them.<\/p>\n\n\n\n
At last, SaaS sales processes usually involve more decision-makers, all of which require at least some personalized touch. Your goal is to communicate the advantages of your product and how it\u2019s going to solve the client\u2019s needs as clearly as possible.<\/p>\n\n\n\n
All in all, SaaS sales teams might often find themselves performing way more selling tasks than their colleagues. So, is the game worth the candle here?<\/p>\n\n\n\n
Once you catch at least one client, your company will be generating a constant steady revenue month after month. You\u2019re not just closing a one-time deal. You\u2019re bringing in a client that will be staying with your company for many years to come.<\/p>\n\n\n\n
A short disclaimer before we proceed to the next section though. If you\u2019re (rightfully) wondering what gives us the right to talk about selling software as a service, I\u2019ve got a perfect explanation for you. Being a part of the HelpCrunch marketing team gives me some unique insights into the SaaS industry in general and how we sell the products here in particular.<\/p>\n\n\n\n
You see, HelpCrunch<\/a> is all-in-one customer communication software designed to provide all the necessary tools for customer service, marketing, and sales. You can use our product to generate more inbound leads<\/a> and close more deals on the go. So basically, sales are at the core of our product and also what we do on a daily basis. Now, what did we learn over the past few years? I\u2019m proceeding to it now.<\/p>\n\n\n\n A sales model<\/a> is a general framework that defines an organization\u2019s high-level approach to selling. The notion is quite blurred and might cover everything from inbound<\/a> and outbound sales to account-based selling. This model is usually used by simpler and lower-priced products. Basically, you don\u2019t need any complex sales processes if your product is intuitive and easy to understand. Most of the work falls on the shoulders of the marketing departments.<\/p>\n\n\n\n If you\u2019re employing a self-service SaaS sales model, your website should communicate the benefits and value of your product so clearly that customers won\u2019t need any additional persuasion. The pricing page must demonstrate all the available subscription packages with detailed descriptions of what\u2019s included in them.<\/p>\n\n\n\n Free trials or freemium models are highly encouraged, too.<\/p>\n\n\n\n All in all, people should come to your website, see your product\u2019s value proposition, and choose an agreeable subscription plan for them right away. No sales work required.<\/p>\n\n\n\n This model is more suitable for mid-sized companies that are ready to undergo higher costs for more complex software as a service. Thus, they require a more personalized approach from your sales team.<\/p>\n\n\n\n While trials are also common for the transactional model, sales representatives must do a lot of work here. This may include personal or group demos, custom targeted emails throughout the trial, follow-ups, etc.<\/p>\n\n\n\n This is the most traditional sales model that requires all the basic tactics. Marketing teams will fuel the pipeline with relevant leads, and sales reps will proceed to nurture them from stage to stage until the deal is sealed.<\/p>\n\n\n\n You can probably guess what the Enterprise SaaS sales model means by its name. Such deals usually include working with huge high profile clients who are more likely to spend thousands of dollars every month on some piece of software as a service.<\/p>\n\n\n\n The products, in their turn, usually offer extremely personalized sets of features to each customer and can be customized to everyone\u2019s needs. They often don\u2019t have any pricing page whatsoever disclosing their prices only by request during personal demos.<\/p>\n\n\n\n Sales representatives spend months working on closing the deal with enterprise clients. The SaaS sales process includes numerous conversations with different decision-makers, preparing tons of documentation, and even personal meetings.<\/p>\n\n\n\n SaaS companies dealing with enterprises usually close exponentially fewer deals per month. However, their average order value covers the shortfall in full.<\/p>\n\n\n\n There\u2019s no one-size-fits-all formula that will allow you to calculate your SaaS sales cycle<\/a> precisely to hours. You should take too many factors into account. <\/p>\n\n\n\n So, what\u2019s influencing how many days your sales reps will have to nurture each lead? The length of your SaaS sales cycle depends on several factors:<\/p>\n\n\n\n You see, there\u2019s just too much to take into account before you can make any conclusions as to how long each deal will take. For instance, Jason M. Lemkin, founder of SaaStr<\/a>, gives his rough estimation<\/a> of SaaS sales cycles in close correlation with products\u2019 ACV (annual contract value) metrics:<\/p>\n\n\n\n These are sales cycles from High Probability Opportunities: i.e. prospective customer has said there is a high likelihood he\/she will buy, says it is budgeted (if deal size is big enough to matter), and the sales rep believes this is true.<\/p>\n\n\n\n It may take one call to get you a High Probability Opp. It may take you 2 years. So I’m not counting that time, though you may be\u2026<\/p>\n\n\n\n Once you are there:<\/p>\n\n\n\n – Deals < $2,000 in ACV should close on average within 14 days.<\/p>\n\n\n\n – Deals < $5,000 in ACV should close on average within 30 days.<\/p>\n\n\n\n – Deals < $25,000 in ACV should close on average within 90 days.<\/p>\n\n\n\n – Deals < $100,000 in ACV should close on average within 90-180 days depending on # of stakeholders and gates.<\/p>\n\n\n\n – Deals > $100,000 in ACV will take on average 3\u20139 months to close. They can take the better part of a year, as these purchases are budgets on Annual cycles. Some deals will be faster, some shorter.<\/p>\n<\/blockquote>\n\n\n\n All in all, the length of your SaaS sales cycle is almost an intimate process that is very unique for each company. Just start selling your SaaS and you\u2019ll see how it goes.<\/p>\n\n\n\n Even though any sales strategy is a never-ending creative process, there\u2019s no need to reinvent the wheel when it comes to well-tried SaaS sales techniques. Classic strategies like persistent follow-ups and annual discounts can never fail you.<\/p>\n\n\n\n At the same time, the SaaS industry presents some unique challenges that can be used by sales reps as additional selling points. For example, free trials, as snail-paced as they are, can present a great chance to demonstrate your willingness to onboard, train, and help at all times. Customers will appreciate your thoughtfulness if you manage to demonstrate it.<\/p>\n\n\n\n So, what are some battle-tested SaaS sales techniques you can use to increase your sales and revenue? Let\u2019s delve right into it.<\/p>\n\n\n\n Personal demos is one of the most effective ways to showcase a SaaS product in the most flattering way while also showing its functionality to new customers. Your sales team can offer them as part of a client onboarding process<\/a> or as a secondary CTA on your website for attracting more inbound leads<\/a>. <\/p>\n\n\n\n We at HelpCrunch provide two types of demos — technical and sales-oriented. Depending on their needs, customers can choose to talk with a sales representative about our products\u2019 main use cases and benefits or proceed right to its functionality. Many companies use such live conversations to provide custom help with setup and advanced features. Either way, customers will appreciate your personalized touch.<\/p>\n\n\n\n If the interest in your live demos is too high to provide personal demos for each client, you can try group webinars. Once you\u2019ve done all the pre-qualification work you can, it\u2019s easy to divide leads into groups by their needs and pain points. You can then provide personalized presentations to each of the groups.<\/p>\n\n\n\n Annual discounts are the oldest software sales technique in the book. Many companies even highlight their annual prices on pricing pages before they show any monthly subscription options. <\/p>\n\n\n\n The psychology behind this SaaS sales technique is quite simple. Customers see it as an advantageous offer: they pay for one year and save 20-30% on each month. The company, in its turn, gets a big addition to their revenue right away and a loyal customer who won\u2019t churn in the foreseeable future.<\/p>\n\n\n\n Sales reps should also feel at ease offering some additional discounts when proper. Even though it\u2019s a dangerous game you shouldn\u2019t rely too heavily upon, occasional discounts can become a knockout punch at the critical moment.<\/p>\n\n\n\n Marketers like to use this technique to generate leads<\/a> that already use some similar SaaS solution from one of the competitors but aren\u2019t fully satisfied with it. Sales reps can take it to the next level and prepare dazzling answers to all the common questions regarding your competitors.<\/p>\n\n\n\n You know how it goes. People come and ask all the same questions over and over again. How is your product different from your competitors? Do you have some features that your competitor does? Are you really more affordable than other companies? That\u2019s why it\u2019s always a good idea to pre-save some helpful answers to these questions and use them when necessary.<\/p>\n\n\n\n No matter how long your free trials are, they\u2019re the best opportunities for building strong relationships with your customers<\/a>. Your sales reps should be constantly in touch with all users during their trial periods. Providing personalized help and giving timely recommendations can be your winning strategy and give you a competitive advantage.<\/p>\n\n\n\n Moreover, you should always have an automated sequence of emails that provide all the necessary information about your product. These emails can be triggered by certain actions customers perform inside your product – whether or not they\u2019ve completed the key activation steps, whether they\u2019ve added their credit card, etc. Thus, you can put numerous sales activities on autopilot and give your sales reps time to work with the most intricate or promising deals. <\/p>\n\n\n\n Communication channels also play a crucial role in your SaaS sales processes. We\u2019re used to thinking that emails and phone calls are the most effective ways to get in touch with leads. In 2020, it\u2019s an unforgivable mistake to omit such modern channels as messengers, social media, and live chats.<\/p>\n\n\n\n Your team should absolutely use live chat for selling<\/a> your SaaS product on the go. They can utilize different chat forms to capture inbound leads\u2019 email addresses. Proactive chat messages are a great way to reach out to website visitors with personalized timely assistance. And the real-time friendly conversation will seal the deal right away. Ensure smooth SaaS customer support<\/a> and establish website conversions using a customer service automation tool.<\/p>\n\n\n\n One of the best options to try for all of the above is HelpCrunch. Just install its live chat on your website, customize it according to your needs and brand vision, and use it for reaching out to inbound leads proactively.\u00a0<\/p>\n\n\n\n Follow-ups are bread and butter of any SaaS sales representative. Sad statistics show that only 2% of deals<\/a> are closed at a first meeting. And such miracles only happen when leads already know their goals, use cases, and available options.<\/p>\n\n\n\n In all the other cases, you must always follow up – after the first demo, after a trial period ends, until people specifically unsubscribe from your emails. Naturally, the first few weeks are crucial for any SaaS sales process. Your product is still fresh in memory and leads are still in the middle of the evaluating process. <\/p>\n\n\n\n However, it might sometimes take a year or more<\/a> before you get an answer. As I\u2019ve mentioned before, your SaaS sales cycle is never a settled period. Moreover, you can always automate the whole process by setting up an email sequence based on how many days have passed since the last contact.<\/p>\n\n\n\n According to venture capitalist Tomasz Ginguz, the top 50% of growers<\/a> generate more upsell business than their slower growing competitors. Customer retention<\/a> is the new sales. This expression has never been truer as the strongest side of any SaaS sales process is in its existing customer base.<\/p>\n\n\n\n You see, companies that sell some one-time software or goods, always have trouble upselling the same thing to their customers again. But if you\u2019re selling SaaS, your product is so versatile that you can offer some additional features or value to your existing customers.<\/p>\n\n\n\n Your team can always feel the exact moment they can pitch something extra to a user. However, it should be a genuine attempt to help rather than a bold pitch for the sake of higher sales. Customers feel these things. Use the data you have available: which features customers use the most, what they\u2019re omitting, and how this new functionality will bring them additional perks.<\/p>\n\n\n\n If you ask me, I\u2019d say that Monthly Recurring Revenue (MRR)<\/strong> and Annual Recurring Revenue (ARR)<\/strong> are the two most important metrics<\/a> not just for SaaS sales reps but for the entire industry. Sales teams can directly influence these SaaS metrics by increasing average purchase value via upselling and cross-selling. And it\u2019s not just that. In general, the more deals they close, the higher MRR and ARR rates grow. It\u2019s just as simple as that.<\/p>\n\n\n\n Another important SaaS sales metric is Customer Acquisition Cost (CAC)<\/strong> which shows how much it costs for your business to attract a new customer. You can calculate it by dividing your total marketing and sales costs by the total number of acquired customers for a certain period. If this number is negative, your business is on the safe side. However, if you\u2019re spending more money than you earn, it\u2019s time to reevaluate some processes for sure.<\/p>\n\n\n\n Customer Lifetime Value (LTV)<\/strong> helps you understand how much<\/a> net profit each customer generates for your business over the duration of their relationship with your business. It\u2019s often measured in relation to the CAC metric to better understand how soon your initial investment is going to pay off. <\/p>\n\n\n\n Other than that, your SaaS sales reps should absolutely be tracking such metrics as retention<\/strong> and churn rate, demo-to-trial ratio, and overall conversion rate<\/strong>. This way, they\u2019ll always know how things are going in general and where they can improve their campaigns.<\/p>\n\n\n\n Sales reps usually receive some fixed payment and additional bonuses for each successful deal. Moreover, many companies may encourage their sales departments by paying something extra for achieving monthly KPIs<\/a>. However, the bread and butter of every representative are their SaaS sales commission rates.<\/p>\n\n\n\n Basically, you can use one of the two most common ways to arrange your SaaS sales compensation plans:<\/p>\n\n\n\n Fixed payment + fixed bonuses for each qualified lead<\/strong><\/p>\n\n\n\n There are two types of qualified leads that can be considered eligible for bonus plans. Companies can pay something extra for either SQL (sales qualified leads) or SAL (sales accepted leads).<\/p>\n\n\n\n So, what\u2019s the difference between them? Sales accepted lead is someone who has already scheduled the meeting with your sales department, but the qualifying part is yet to be done. Sales qualified leads become ones when they fit perfectly into your buyer persona<\/a> profiles and are very likely to make a purchase.<\/p>\n\n\n\n The line here is so blurred that many companies don’t even distinguish between these notions. Anyway, companies can pay some bonuses for hot leads that went through your entire SaaS sales process guided by your salespeople.<\/p>\n\n\n\n However, this system is rather rare as businesses prefer the second, more straightforward way.<\/p>\n\n\n\n Fixed payment + percentage from closed deals<\/strong><\/p>\n\n\n\n This SaaS commission plan is quite obvious. If a sales representative has walked the lead through the entire sales process and closed the deal, they should receive some fixed percentage from it.<\/p>\n\n\n\n This makes more sense from a business’ perspective as you only pay for successful deals. Sales reps should also feel more motivated to work with high potential customers more thoughtfully.<\/p>\n\n\n\n The choice of a favorite solution for managing sales can be quite subjective. Some representatives prefer free or affordable CRMs and don\u2019t need anything extra while others like automating and optimizing every single process. <\/p>\n\n\n\n Tastes differ, but there are some must-have tools that any team can\u2019t do without. At the very least, you always need a way to communicate with leads, to send them follow-up emails, and to keep your contacts in one place.<\/p>\n\n\n\n I may be a little biased here, but if you want to manage all your communications with leads and customers from one unified dashboard, HelpCrunch can become a great choice for your company. It offers a live chat widget that you can install on your website and catch inbound leads proactively on autopilot.<\/p>\n\n\n\n Features like chat forms, department selector and built-in knowledge base will allow you to identify the most high potential leads and attend to their needs right away.<\/p>\n\n\n\n Once you\u2019ve discussed all the details via chat, sales reps can set up an automated sequence of follow-ups. Emails will be sent based on time since the last conversation or any other attributes you choose.<\/p>\n\n\n\nCommon SaaS sales models<\/h2>\n\n\n\n
In a nutshell, it\u2019s just a more general way to describe HOW you sell. There are three generally accepted<\/a> types of SaaS sales models:<\/p>\n\n\n\n![\"\"](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/10\/3-blog_illustrations-01-03-1.png\")
Self-service SaaS sales model<\/h3>\n\n\n\n
Transactional SaaS sales model<\/h3>\n\n\n\n
Enterprise SaaS sales model<\/h3>\n\n\n\n
![\"\"](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/10\/1.png\")
SaaS sales cycle<\/h2>\n\n\n\n
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![\"\"](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/10\/the-saas-sales-method.png\")
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Useful SaaS sales techniques<\/h2>\n\n\n\n
1. Personal or group demos<\/h3>\n\n\n\n
![\"\"](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/10\/image2.png\")
2. Annual discounts<\/h3>\n\n\n\n
3. Competitor comparisons<\/h3>\n\n\n\n
4. High-touch trial accompanying<\/h3>\n\n\n\n
5. Selling via live chat<\/h3>\n\n\n\n
![\"\"](\"https:\/\/helpcrunch.com\/blog\/wp-content\/uploads\/2020\/10\/Installation-wizard-with-chat-proactive-message-1024x531.png\")
6. Persistent follow-ups<\/h3>\n\n\n\n
7. Upselling your existing customers<\/h3>\n\n\n\n
Essential SaaS sales metrics <\/h2>\n\n\n\n
SaaS sales compensation<\/h2>\n\n\n\n
Must-have software for SaaS sales<\/h2>\n\n\n\n
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