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Software as a Service (SaaS) is everywhere. More and more businesses are switching over to SaaS models in their day-to-day operations. In fact, recent statistics show that the SaaS market has reached an estimated market north of $145.5 billion.
But despite its widespread appeal, SaaS isn’t just selling software like you’d once have sold a loaf of bread. According to recent data published by McKinsey, only a small share of SaaS companies are able to sustain growth rates above 30 percent to 40 percent.
Behind these impressive figures lie a range of highly methodical, highly strategic SaaS sales processes. Today, we’ll be walking you through a comprehensive guide to the SaaS sales process, before rounding up with some best practices to help you get off to the best start possible.
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SaaS Market Size Worldwide
What are SaaS sales all about?
SaaS products are subscription-based software services hosted by cloud-based service providers.
As such, the SaaS sales process is very different from traditional sales. Instead of selling a standalone product or service, SaaS sales teams sell subscription access to individual customers (think the likes of Netflix and Spotify) and to businesses (who might require a SaaS telephony, payment, or CRM solution, for example).
Selling SaaS is a longitudinal process. It’s not just about selling something upfront. SaaS sales teams sell long-term, rolling subscriptions, rather than making one-off transactions. For this reason, it’s even more important for SaaS companies to prove to their customers that they can help save resources and boost performance.
To do this, the SaaS sales process is multistep, involving consumer education through presentations, tutorials, SaaS events and trials.
The SaaS sales process unpacked
So what does the SaaS sales process actually entail? The process will be different for every product, but in general, we can whittle it down to five key stages: prospecting, qualifying and presenting, negotiation, closing, and nurturing.
Let’s unpack each of these in more detail below.
Step 1 – Prospecting: Get yourself out there! Prospecting is all about identifying who to market your SaaS product to and targeting those prospects with marketing materials across a range of channels (e.g. blogs, social media and ads).
At this stage, you might opt to partner with a specialist agency. SaaS SEO agencies use content, SEO and link-building best practices to generate as much engagement in your product as possible.
Step 2 – Qualify & present: Be selective! Figure out who your highest quality leads are and follow up with a sales call to cement their interest and keep them in the sales cycle. This is your opportunity to sell the solution. Tell your prospects directly how your SaaS product will help them overcome their current operational roadblocks.
Step 3 – Negotiation: Not all of your prospects will jump on board immediately. They might have some questions or concerns. It’s time to alleviate the concerns and push the benefits.
Step 4 – Close the deal: It’s what every sales process is leading up to. Once your prospect is on board, seal the deal and sign them up for their chosen subscription package. If necessary, throw in an incentive to make it happen.
Step 5 – Nurturing: Don’t let your customer service drop off after a sale. Customers need nurturing if they are to remain loyal to your SaaS service. Keep in touch with offers, promotions and upsells, and make sure you’re offering customers high-quality, 24/7 customer support.
Remember, not every SaaS product will have an identical sales cycle. The length of your sales cycle will vary depending on a range of factors. Everything from the type of customer you’re targeting to the price point of your product will come into play. For example, in general, small businesses tend to convert faster than larger enterprises with multiple decision-makers involved.
SaaS sales best practices
Software as a service might be exploding right now, but that’s not to say selling SaaS doesn’t come with its own set of challenges. Selling SaaS is oftentimes more complicated than traditional sales due to the amount of education and demonstration required to help prospects fully understand what’s on offer.
SaaS software comes with lots of features, and customers must get their heads around a fairly new concept in the shape of subscription-based investment. But don’t let that put you off. With the right strategy and resources, sales teams can enjoy great success. So, without further ado, let’s discuss some essential SaaS sales best practices.
1. Pick your sales model
First thing’s first, you’ll need to select an appropriate sales model for your product. Typically, SaaS sales fall into one of four models.
- Customer self-service → Best for products with a lower price point
- Transactional → Best for over-the-phone B2B sales
- Enterprise → Best for high price-point B2B sales
- Trials & demos → Best for educating prospects
2. Identify your key metrics
Try to consistently optimize your sales process by building up targeted sales metrics. This data will tell you what’s working and what could be improved for next time.
Top SaaS sales metrics include:
- Monthly Recurring Revenue (MRR)
- Net Revenue Retention Rate (NRR)
- Annual Recurring Revenue (ARR)
- Net Promoter Score (NPS)
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (LTV)
- Sales Qualified Leads (SQL)
- Lead velocity/deal velocity
- Win rate/churn rate
3. Build your SaaS sales team
Finally, it’s time to put together your team. Your SaaS sales team may consist of a business development representative, accounts lead and customer success specialists. SaaS companies will require specialized sales teams with niche, technical expertise.
Your team should be knowledgeable about technology and know both your product and your target customer inside out. That way, agents can demonstrate how the product works in the context of business operations.
SaaS sales in a nutshell
So there we have it. The SaaS sales process is one consisting of five essential stages: Prospecting, qualifying and presenting, negotiation, closing the deal and nurturing. While every product’s sales process will vary, these five fundamentals are always present.
Paired with the perfect sales model, targeted metrics and a great team, your SaaS service will soon be flying off the metaphorical shelves.
Nick Brown is the founder & CEO of accelerate. Brown has launched several successful online businesses, written and published a book and grown accelerate from a U.K.-based agency that now operates across the U.S., APAC and EMEA.
