How to create a sales strategy plan for SaaS
The SaaS sales model isn’t brand new to the software industry, but many customers aren’t well-versed in what they’re getting with a SaaS solution. As a result, planning a sales strategy for SaaS offerings must consider the benefits of hosting, convenience, reliability, and security. Yet, the basic tenets of planning a sales strategy still hold true, regardless of the product or service delivery model.
Not so very long ago, the primary business model for purchasing software involved downloading the software of interest to the customer’s personal computer or the company’s server for larger organizations. The software code was stored on that computer (or server), and updates, if any, was provided by giving the customer access to additional downloads.
Readers of a certain age likely remember the process of installing Windows or other operating systems using a CD. (Or for a really big throwback…remember the old AOL CDs?) And when it was time to upgrade your software, customers had to ensure that their own servers and data centers met applicable performance, security, and/or redundancy requirements. Weren’t those days fun? (not!)
Now, with the glory days of CDs behind us, we move on to cloud-based models and greater software sophistication. And so too, our sales strategies must shift to the new model. This post covers the sales strategy principles needed to help your SaaS business grow and thrive.
How Software as a Service (SaaS) works
Today, software is typically provided as a service, AKA “software-as-a-service” or “SaaS.” Of course, unlike the old CD model, SaaS solutions live on servers owned and maintained by an entity other than the customer, making it much easier for the customer to access and use.
In the SaaS model, customers pay for a right to access the software but generally don’t purchase a license to the software. The customer’s use of the system may be separated from that of other customers by setting up a distinct “instance” of the software. Typically, but not always, the vendor will operate the data centers from which the customer accesses the software. Sometimes, vendors lease server space from major hosting providers, like Amazon AWS, Microsoft Azure, IBM Cloud, or Oracle Cloud.
Though the transition from the old CD model to the cloud hasn’t been easy, it’s been profitable. Since transitioning the Creative Suite from licensed software to cloud-based subscriptions, Adobe’s revenue has increased 44% and is still climbing. Clearly, the market has adapted to the new model, and in the US, there are an estimated 15,000 SaaS companies. With the SaaS market growing by 18% year over year, what should new entrepreneurs know about developing a sales strategy?
8 tips for planning an SaaS sales strategy
Planning a SaaS sales strategy isn’t different from any other product or service; basic sales principles apply, regardless of industry. For example, all sales strategies require understanding the customer’s functional needs and educating them on how the proposed solution can meet those demands. But what’s different about SaaS sales is it also requires a strong emphasis on the vendor’s infrastructure from which the software will be hosted, including that infrastructure’s performance, reliability, security— and even conformity to various rules and regulations. If you’re just getting started in your SaaS business, we offer 8 tips to get your sales strategy underway.
1. Develop and communicate a strong value proposition
A strong value proposition is Sales 101: Why should a customer be interested in your product in the first place?
When it comes to software, functionality is obviously a key focus. Still, too many software companies focus too heavily on the bells and whistles of their revolutionary product and not enough time on the customer’s specific needs.
Besides communicating the software’s functionality and benefits, a SaaS sales plan also addresses how the hosting infrastructure provides value. Quite simply, this means emphasizing elements like availability, performance, redundancy, security, etc., to the customer.
2. Create a sense of urgency
Purchasing new software is not a decision to be taken lightly, especially if the price tag is high. Unfortunately, many buyers get overwhelmed by the options, or the purchasing process slows as the buyer doesn’t have time to sort through all the information. As a seller, it’s your job to simplify and streamline the buying process to prevent buyer cold feet or make no decision at all. Thus, a solid sales strategy needs to create a sense of urgency to spur action.
3. Tell a compelling story
Simply put, humans love stories. Planning a sales strategy that incorporates personal experiences, relatable anecdotes, uncomplicated analogies, and other story-telling techniques helps connect with an audience. Be human and authentic in your approach— you’ll go further.
4. Be customer-focused, not vendor-focused
Every company has processes, and they’re in place for a reason. Processes help ensure consistency and avoid costly missteps. But processes must contain an element of flexibility in the sales function. For example, 79% of buyers are frustrated with the purchasing process; SaaS vendors can’t assume all sales prospects fit nicely into their internal procedures. Sales is first and foremost about meeting the customer where they are and understanding their needs.
5. Get to know your potential customer
Many SaaS offerings are enterprise-wide, meaning the customer is purchasing a SaaS solution for use by the entire organization. That means each sale is potentially a big source of revenue and that each customer is unique. A one-size-fits-all approach to a sales strategy is rarely effective in the B2B context. Therefore, getting to know each customer and their unique situations, challenges, and aspirations is critical before making a sales pitch.
6. Emphasize value-adds and unconsidered needs
Software is often an afterthought for businesses. Most decision-makers are focused on their own industry and corporate objectives but understand that they need a software solution to accomplish certain ancillary tasks. Every SaaS vendor will make a pitch for how their solution checks all the boxes for your customer. When planning a sales strategy, a successful SaaS vendor demonstrates their expertise in the industry and points to value-adds that elevate their offering above a mere commodity, pointing out the unconsidered needs of the customer.
7. Align sales and marketing
Whether because of poor planning or “big personalities” at the top of each function, sales and marketing are often not nearly as integrated as they need to be in many organizations. These two departments need to coordinate with a shared vision and goals when planning a sales strategy. Invest in building the relationship between sales and marketing!
8. Remember repeat business is your friend
Vendors rightly celebrate landing a big customer, but that shouldn’t be the end of your efforts. Continue cultivating the relationship by helping your customer address their needs beyond the initial sale. In turn, you’ll not only increase your business but develop brand advocates too.
The SaaS sales model isn’t brand new to the software industry, but many customers aren’t well-versed in what they’re getting with a SaaS solution. As a result, planning a sales strategy for SaaS offerings must consider the benefits of hosting, convenience, reliability, and security. But at the same time, the basic tenets of planning a sales strategy hold true, regardless of the product or service delivery model.
Launching your SaaS model is just the start. As customers request more information about your offering, be confident that your sales proposals mirror the innovation of your product. Qwilr will help you create amazing proposals that make you stand out, get noticed, and prompt buyers to action. Request a demo now.