The Software as a Service (SaaS) industry has grown from 500 products in 2012 to 8,500 in 2017 to 15,000 in the US alone this year. In fact, the global SaaS industry is expected to be worth $60.36 billion by 2023, bolstered by the need for digital transformation and remote working during the pandemic. Thriving in such a competitive landscape means honing the sales process and creating systems that automate the SaaS sales cycle and scale growth. 

So how do you get started?

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What is SaaS sales?

 

SaaS is all about selling internet-based or web-based software, sometimes requiring a one-off payment and sometimes through a subscription model. It requires a good understanding of the product and customer requirement, since the product is created to solve a specific problem.

SaaS sales are slightly different from sales in other industries because they rely on customers continuing to pay a monthly fee over a long period of time. It’s not a one-and-done purchase; instead, it’s an ongoing subscription that needs constant nurturing and engagement.

Users tend to carry out their own research and when they’re ready to invest, they reach out to a sales team or sign up online. If they get stuck or have a question, they will usually reach out to customer support for fast answers. On top of this, free trials and freemium models are often the gateway to landing long-term users, which means that brands have to hook and retain the attention of users throughout the trial and beyond. 
 

Monday.com SaaS tiered pricing Monday.com SaaS tiered pricing

Monday.com offers several tiered subscriptions as well as an option to try the tool for free for 14 days.

 

Freshsales SaaS sales pricing Freshsales SaaS sales pricing

Freshsales has three-tiered options as well as a free subscription model.

Evolution of SaaS sales

 

The SaaS sales process goes through a number of different stages as time passes, and there’s not just one moment to sell for SaaS brands. In the past, SaaS products were predominantly bulky software that was cumbersome. Now, tools are very much plug-and-play and can integrate with other software quickly and easily.  

In order to grow sustainably, SaaS brands need to focus on two levels of sales: selling to new users and selling renewals to existing users. This usually comes in the form of upselling and cross-selling. The former is upgrading a customer’s subscription, while the latter means promoting relevant or related products at the point of sale. 
 

What are the biggest challenges in SaaS sales?

Option overload

Prospects have plenty of options today, and it’s difficult for brands to explain what their product offers and why it’s different from competitors. 

Qualifying leads

It can be tricky to identify leads that will go on to purchase, especially if your software can be used by many different audience segments.

Understand existing product stacks

Knowing what other products your customers are using in tandem can be hard, which makes it difficult to determine how your product fits in. 

Converting free trial customers

It’s no secret that consumers like free things, so taking them from a free account to a paid one can feel like a huge uphill struggle. 

Aligning sales and marketing

Marketing brings in new leads, but it’s sales reps that tend to close the deal. As such, both departments need to be aligned on their goals and objectives. 

Important SaaS sales metrics to track 

Identifying how well your SaaS sales process is working means digging into your analytics and tracking certain metrics. Here are some of the most common SaaS sales metrics to track.

1. MRR

Monthly Recurring Revenue is the amount of revenue you have consistently coming in each month from your user base. 

 

SaaS Sales Metric SaaS Sales Metric

2. ARR

Annual Recurring Revenue is the same as MRR but tracks how much revenue you have coming in each year. 

ARR Formula SaaS sales metric ARR Formula SaaS sales metric


3. CAC

Customer Acquisition Cost tracks how much on average it costs you to acquire a new customer. This is usually worked out by adding up your total sales and marketing costs and dividing them by the total number of customers you acquired over a certain timeframe. For example, if you spend $5,000 on a campaign that brings in 230 new customers, your CAC is $21 per customer.

SaaS sales metric cac formula SaaS sales metric cac formula

4. Win rate

Win rate is a sales term that’s not specifically related to the SaaS industry but can be applied anyway. It refers to the rate you turn opportunities into customers and is calculated by dividing the number of opportunities (or leads) you’ve won by the total number of opportunities (or leads) that have been generated over a certain timeframe. 

saas sales win rate sales metric saas sales win rate sales metric

5. Churn 

Churn refers to the rate at which users cancel their subscriptions. It can be worked out by dividing the number of customers who have canceled their subscription over a certain timeframe by the number of customers you had at the start of that timeframe. 

 

6. Deal velocity

Deal velocity refers to the speed with which you negotiate and sign a new customer. The last part of the conversion process is always the most important, but it’s easy to slack off here and fail to optimize the final hurdle. 
 

sales velocity saas sales sales velocity saas sales

7. NPS

Net Promoter Score is used to measure customer loyalty - something that’s crucial for SaaS brands. It is measured by asking a single-question survey once a customer has been with you for a certain period of time and is ranked with a number from -100 to +100 (the higher the better). 
 

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What are SaaS sales models?

There are several different kinds of SaaS sales models that are common in the industry. Each one has its own set of benefits, and which one you choose ultimately depends on your product and audience.

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1. Customer self-service

This is where customers research solutions by themselves with the help of informative content, FAQs, automated customer support, and a knowledge base that helps customers make the right subscription selection and get their questions answered before they invest. 

Gorgias has an extensive knowledge base that answers many of the questions prospects might have before they sign up. 

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2. Enterprise sales

An enterprise sales model focuses on large, high-value accounts. It’s a far more complex process than selling to individuals and smaller teams since there are often more stakeholders to impress and convince. On top of this, the approval process can take a long time if there are multiple gatekeepers that need to have their say. This model identifies, nurtures, and builds relationships with enterprise companies that are interested in investing in hefty annual subscriptions. The process usually involves a sales team, product marketing, and plenty of resources that engage enterprise companies at different stages of growth.

 

 

3. Monthly vs annual contracts

Recurring subscriptions are the main premise of a SaaS brand, but different brands choose to opt for different contract lengths. Some will only allow new users to pay yearly, while others offer a monthly subscription model that gives customers 12 different chances to leave every year. 

SaaS sales process

While the SaaS sales process looks slightly different for every brand, there are a series of steps that are crucial for turning potential users into paying customers. Ultimately, the length of the process will depend on the price and complexity of your product and your target audience.

A simple product that costs $20 a month will have a much quicker sales cycle than a complex piece of software that is priced at $599 a month. 

Prospecting 

Once you have a good idea of your target audience, you can start to prospect potential leads. This can either be done actively or passively depending on the size of your team and the resources you have available. 

Here’s what this might look like in action: 

  • Passive prospecting: content marketing through blog posts, signup forms, and email marketing that leads to demos and free trials. You essentially attract leads through engaging content and providing the right information for them to self-service 

  • Active prospecting: if you have a particularly high-ticket product or a very niche audience, active prospecting might be a better way to go. It involves identifying potential prospects and reaching out to them to offer a demo or more information about your product 

Qualifying 

Not everyone who visits your blog or reaches out to your customer support team will be a qualified prospect. It could be a waste of time and resources to follow up with. Instead, qualify prospects with lead scoring tactics to determine whether they’re a good fit and likely to sign up to use your product. 

Demo 

Getting prospects to book a demo is a key goal of SaaS brands. Pointing your content marketing efforts and sales team scripts to this is a great way to understand the wants and needs of different users and help carve a unique customer experience for them.

During the demo, you can showcase the features that will benefit them the most and show them what’s possible with your product. 

Objection handling 

It’s highly likely that your prospects will have a couple of questions they want answers to before they go all in and invest in your product. At this point, they will have completed the demo and understand how your product can work for them, but it’s important that you quickly respond to any queries they have.

If you take too long at this point, there’s a risk they might jump ship and go with a competitor who can answer their objections in a timely manner. You can address objections via customer support, with an expansive knowledge base, and through detailed FAQs.

Closing 

Closing the deal is the most important stage of the SaaS sales process. It’s easy to think you have a done deal when prospects get to this point, but there’s still some work to do to get them over the finish line. However, at this point, you should be focused on delivering the final proposal, making any last-minute negotiations, and getting the contract signed. 

Nurturing 

For SaaS brands, the hard work isn’t over when a user signs up. Because of the recurring subscription model, it’s crucial that you continue to nurture existing customers so they renew when their contract is up. For example, if this is every month, it’s important to put measures in place that remind them why they need your product in their life every month. You can nurture prospects through segmented email marketing campaigns, ongoing customer support, and sharing regular updates to the product. 

Tips to set up your SaaS sales team for success 

Setting your sales team up for success will put you in a good position to close more deals and attract users. Here are some ways you can do that. 
 

1. Keep a shorter trial period

Trial periods offer a great opportunity for prospective users to get a feel for your product, but if they go on for too long they can often lose their initial charm. Instead, keep trial periods short to keep the momentum going and maintain that original interest. 

 

SaaS Sales CakeHR example SaaS Sales CakeHR example

 

2. Be a friend to the prospect

Human relationships are still key even though SaaS is an inherently digital industry. Encourage your sales team to forge meaningful connections with prospects and get to know their individual wants and needs. This increases loyalty and enhances the customer experience.

 

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3. Detailed product demos 

Product demos are one of the first moments you have a prospect’s undivided attention. Your sales team should tailor demos to suit the individual needs of prospects and provide as much information as necessary so they know how the product can best help them. 

Podia has a comprehensive demo video for interested prospects, but also offers the opportunity to have a personalized demo with the sales team.

 

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4. Research the prospect

It helps to know as much as possible about a prospect before reaching out to them or jumping on a demo. Get to know their wants, needs, challenges, and goals to determine how your product might suit them. 
 

5. Benefit-led selling 

SaaS products can often be complex with a huge suite of powerful features. But prospects rarely want to know what your product does; instead, they want to know how it can help them. As a result, your sales team should lead with the benefits of a product. 

Intercom makes a point of highlighting the benefits of using its product. 

saas sales saas sales

 

6. Stay in contact during the trial

Instead of leaving prospects to wade through the trial on their own, help them out. Stay in touch with useful emails, tips, and features they can use to help them solve their specific needs. 

Hootsuite gives users tips they can use during their trial. 

 

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Important software tools for SaaS sales

Success in sales often means implementing a suite of tools to automate and streamline the process. Here are some key ones to add to your stack.

1.  CRM

A CRM is a tool for every occasion. Not only does it help you manage your prospects’ contact information, but it can automate sales emails to keep leads interested, track your leads through the sales cycle, and track data. Nurturing leads is crucial, but so is staying in touch with existing customers to ensure they renew every month or year. 

A CRM that lets you get a 360-degree view of the prospect or customer is a great way to join all the dots in the customer journey.

You can also use AI scoring, automate mundane manual tasks, like scheduling emails and follow-ups and manage deals all from one central place. 

Get your SaaS CRM software now
 

crm freshsales crm freshsales

2. Video conferencing tool

You’ll need a video conferencing tool to speak to prospects and run your demos. Being able to see your customers face to face will help build a personal connection and establish stronger relationships. 
 

3. Email address finders

Prospecting is hard when you can’t reach the people you want to. An email address finder will help you unlock email addresses from the websites you visit. 

 

4. LinkedIn sales navigator 

This LinkedIn feature helps you find prospects to reach out to. The tool lets you use powerful search and filter features to find the right contacts and allows you to take it one step further and nurture relationships directly through the platform. 

 

5. Customer support tool

Prospects are likely to have questions as they move through the sales cycle. Having a customer support tool on hand to help them out can stop them from getting frustrated and going to a competitor. An automated chatbot might be enough here, or you might want a more powerful ticket system that can send automated responses to commonly asked questions but that provides a personalized experience for more unique objections and queries. 

Learn how you can set up your helpdesk

 

6. E-signature tool 

It’s very easy to integrate an e-signature tool with a CRM. Giving customers the opportunity to digitally sign their name creates a faster approvals process and eliminates much of the back-and-forth involved in signing new and onboarding new customers.

Manage your e-signatures efficiently

 

7. Live chat tool

Customers today want an easy and effortless customer service experience. Integrating a live chatbot like Freshdesk Messaging into your CRM can tackle objections and hesitations as soon as they crop up. The conversations can be stored in your CRM to provide a big-picture view of a prospect’s pain points and overall experience with your brand. 

Set up your AI chatbot now

 

8. Marketing automation tool

Automating the marketing process with a tool like Freshmarketer creates a slick journey for each customer. You can quickly see how they found you, their next steps, and where they engage with you the most. On top of this, you can segment them based on their unique interests and needs to send relevant personalized messages. 

Do A/B testing, set up heatmaps and more

 

9. Customer success tool

Live chat works as a digital storefront and can provide real-time information to all visitors. When you land a customer, you want to provide them with the best experience and a customer success tool can do this. It lets you create personalized sales campaigns based on a user’s previous behavior and interactions with your brands. 

Set up customer success integration now
 

 

Supercharge your SaaS sales process 

Creating a SaaS sales strategy requires a deep understanding of your product, its unique selling point, and your customers.

You can speed up the process and remove any friction by using a powerful SaaS CRM software that lets you manage contacts and create personalized communication based on how prospects interact with your brand and their past purchase behavior.

Use it to segment different audience types and send automated sales emails and resources to tackle objections and push prospects through the sales cycle. 

saas sales saas sales