Most people and businesses these days are already customers of some sort of software as a service, or SaaS. If you subscribe to services like Netflix at home or Salesforce at your workplace, you’re using SaaS. For a technical definition, SaaS is a cloud-based software service that is entirely managed by the software provider. The end user gets access to all of the software’s features and services by paying for a subscription. In this blog, we will be discussing how to sell SaaS B2B.
There are many elements to this. The product team and marketing have a lot to do with a SaaS company’s success. In this blog, we will focus on the sales skills and the sales process needed to sell SaaS products to other businesses and government agencies successfully.
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For a long time, software was a one-time purchase. Individuals got a copy to install on their home device or work computer. Then, that was it. No subscription, no updates. However, that selling model has completely changed over the last two decades. Companies realized that one-time sales of software were nearly not as profitable as selling software-as-a-service that users subscribe to.
Thanks to cloud computing, this model became extremely viable and easy to deliver to customers. Now, companies have control over who has access to their software service, and this has required a shift in selling. In the past, you only had to persuade customers to make a one-time purchase. SaaS selling, however, requires sales professionals to persuade companies to lock into a subscription model and continuously renew that subscription.
As mentioned above, the main difference between selling SaaS and traditional software sales is that SaaS is a subscription, not a one-time purchase. This means the client does not own the software in perpetuity. They are paying to access the platform where the software is hosted.
This can be a major shift in thinking for many business executives. The idea of not owning the software and having to pay a company continuously for a service can be a tough pill to swallow for a lot of business leaders. Therefore, during a SaaS sales cycle, a salesperson has to create value for the software itself and also create value for purchasing that as a subscription rather than as a one-time purchase. There are many benefits like the ability to access software anywhere and at any time. There is also less maintenance for the customer.
There are other benefits with SaaS but that has to be communicated by the salesperson on top of just the value of the software itself. Since SaaS is a subscription, the other major difference in the sales cycle is that the sales cycle never ends. Renewals will come up every year or quarter. Sales teams need to have a good account management process in place to successfully retain customers.
The SaaS sales process should start with a discovery call. The salesperson selling SaaS has to be a decision coach. As mentioned above, the seller has to create value for the software and for the idea that it should be purchased as a subscription. This is a lot to get across to a potential client. For many customers, this might be the first time they are making this sort of purchase.
The seller must take a consultative approach to selling and that starts with the very first call. The discovery call is an opportunity for the salesperson to learn about the customer's challenges and the problems they are trying to solve. It is not the time to talk about a product’s features. There will be time for that later. In the initial call, salespeople should take time to learn about the prospect. This is what makes a seller a decision coach that takes a consultative approach.
Far too often, teams selling SaaS try to jump straight into a demo without understanding a customer’s needs. This will not help a sales rep create value. In fact, it will most likely leave the potential buyer feeling unheard and disinterested in the solution. After the discovery call, the sales rep should have a good idea of the customer’s challenges and desired results. Then, it is a matter of figuring out the prospect’s decision methods and catering the sales meetings to what they need in their buying process.
A good SaaS sales process revolves around the actions of the customers, not a company’s internal workflow. Sellers can’t expect to show a demo, send a proposal then wait for the signatures to roll in. During the sales process, a seller has to actively create value during each call. The process needs to revolve around where the customer is in their decision stage and what they need at each stage of their process. A generalized version of the SaaS sales process could look something like this:
Note that the process above does not have a seller talk about their own solutions until Step 4. Of course, some elements of the company and product will probably be discussed in the initial stages, but it should not be the main focus. A successful SaaS salesperson always starts by seeking to understand the customer and then moving on to map the solution to the client’s needs.
Asking the right questions is a skill that can truly make or break a sale in the world of Software as a Service (SaaS).
Begin by getting a grasp of the prospect's pain points. What challenges are they facing in their business operations? Are they struggling with efficiency, data security, or scalability? By understanding their pain points, salespeople can position themselves as problem solvers.
Next, dive into their goals and aspirations. What do they aim to achieve in the short and long term? Do they have specific objectives, such as streamlining their workflow, reducing costs, or expanding their customer base? Knowing their goals enables a salesperson to align the SaaS solution with the prospect’s desired outcomes.
When a prospect raises an objection, it's a pivotal moment that should not be avoided but embraced. Effective objection handling requires a strategic approach.
Start by asking follow-up questions. Probe deeper to uncover the underlying issue behind the objection. For instance, if the objection is about the price, inquire with questions like, "Could you help me understand your budget constraints?" or "What specific value are you seeking from our solution?"
Sometimes, objections mask other issues, such as uncertainty about implementation, fears of disruption, or concerns about compatibility with existing systems. Addressing these underlying issues is key to building trust and credibility.
There are many things to get right when it comes to being effective at selling Software as a Service. We can’t cover all of it in this blog but here are a few tips to keep in mind.
The way that a person sells is a huge part of being effective at B2B SaaS sales. There is a lot of competition for the same market share. Competing on price and features will not get a seller very far. Sales people have to be a coach to their buyers and someone that the prospects trust. Salespeople have to pay attention to the customers needs and cater the sales process to those needs.
In SaaS sales, it is not enough to just communicate the value once. It is a subscription so the customer has to always experience the value and be reminded of it in order to continue with their renewal. Do not wait till the renewal comes up to contact the customers. Establish a well functioning Account Management team that is periodically reaching out to customers to ensure they are receiving the value they are expecting.
Salespeople at SaaS companies have a tendency to jump straight into demos. They also have a tendency to power through the demo without taking a moment to check in with the prospect and ask them questions. Questions are one of the most effective tools that salespeople have. Questions should be leveraged on sales calls at least every 10 minutes or so to arouse a customer’s curiosity or to test understanding. This will keep the customer engaged and also help sales reps build rapport with their clients.
Much like how SaaS sellers try to jump to a demo, they also have a tendency to jump into the proposal. A proposal should never be sent out unless a prospect has asked for one. This is an example of someone following their own workflow rather than providing guidance and information at the customer’s pace. The proposal should be a collaborative effort between the prospect and the salesperson. It should not be a one sided effort that is sent to a prospect without request. Take time to understand the customer’s needs and desired outcomes and work with the client to create a proposal that reflects the prospect’s viewpoint.
Adopting a one-size-fits-all approach simply won't cut it with SaaS. It's imperative that salespeople adapt and tailor sales strategies to cater to the diverse needs of different business models.
When we talk about SaaS, there's a world of difference between what startups and enterprises are looking for. Startups, typically at the beginning of their journey, look for cost-effective and scalable solutions that can grow with them. On the other hand, enterprises, being more established, prioritize aspects like seamless integration with their existing systems and advanced security. It's crucial to recognize these distinctions and customize the approach accordingly.
As you seek to uncover the important details of how to sell software as a service, it becomes apparent that a multifaceted approach that goes beyond the surface is key. Understanding the nuances of SaaS sales, such as personalizing your approach and mastering the art of effective questioning, requires dedicated training and knowledge.
At Funnel Clarity, we're here to help navigate this dynamic field. Our sales training programs are designed to empower salespeople with the expertise needed to excel in SaaS sales. Looking to dive deeper into your training goals and explore how our programs can benefit you?
Request a meeting today. Together, we can chart a path to sales success in the ever-evolving world of SaaS.
