In the past, businesses relied on software installed directly on their systems. But today, many are swapping on-premise solutions for the convenience and scalability of SaaS.
The SaaS sales market is expected to reach $299.07 billion this year.
The potential for SaaS sales is significant. But selling SaaS is no easy feat. B2B customers have increasingly high expectations. And they have no shortage of options for solving their challenges. While the exact number of SaaS companies is hard to pin down, some estimates suggest there are as many as 20,000 vying for buyers’ attention.
To succeed in B2B SaaS, reps must be ready to deliver outstanding buying experiences that meet customer expectations and drive bottom-line results.
If you want to boost your success, you’re in the right place. In this post, we’ll dive into everything you need to know about SaaS sales, including:
- What it is
- How it differs from selling other types of products
- What the process looks like
- Best practices for improving buyer experiences and driving more sales
What is SaaS?
Chances are, you’ve seen the term “SaaS” a time or two. But what exactly is SaaS?
SaaS is an acronym for software as a service. It’s a web-based type of software typically accessed through an online portal or mobile app. SaaS differs from on-premise software, installed and maintained locally on an organization’s computers or servers.
Today, most SaaS vendors use subscription-based pricing. In other words, customers pay a recurring fee in order to use the SaaS solution for a specific time, typically monthly or annually. Sometimes, SaaS vendors offer free trials that allow prospects to test the solution before purchasing.
What are the types of SaaS?
Some SaaS is used directly by consumers. Typically, no sales rep is involved, and a consumer can access the software for free or purchase it online via credit card. Some examples of popular SaaS solutions consumers use include Netflix, Spotify, and Headspace.
However, for this post, we’re focusing on B2B SaaS sales. Some examples of popular B2B SaaS software include:
- Video conferencing software, like Zoom
- Customer relationship management (CRM) software, like Salesforce
- Revenue enablement software, like Mindtickle
- Office suite software, like Microsoft Office or Google Workspace
What is SaaS sales?
Now that we know what SaaS is, what is it?
It’s selling B2B, web-based solutions to customers to help them overcome their challenges and achieve their goals. Typically, the process is focused on signing up a customer for a subscription. The customer makes regularly recurring payments (for example, monthly or weekly) in exchange for using the software.
How does SaaS sales differ from selling other types of products or services?
If a rep is skilled at selling other types of products or services, you may assume they’ll excel in SaaS sales. But that’s not always the case.
Why? Because SaaS sales differ from other types of sales in some significant ways.
The type of product
SaaS is fundamentally different from other types of products and services. It’s not tangible, like certain B2B products. And it’s vastly different from traditional, on-premise software. That means the approach you use for other types of B2B sales may not work in SaaS.
The pricing model
Some B2B deals involve a one-time purchase. For example, if a business purchases new computers, it pays for the machines once.
SaaS typically uses a subscription-based pricing model. Customers pay a recurring subscription fee in exchange for using the solution for a specified period, which allows for a more predictable cash flow.
Because they use subscription-based pricing, SaaS businesses track metrics like:
- Monthly recurring revenue (MRR): How much recurring revenue is generated from customers each month.
- Annual recurring revenue: How much recurring revenue is generated from customers annually.
The complexity
Many SaaS products are highly complex. In addition, as businesses evolve and innovate, product offerings change.
In SaaS sales, reps must know their products inside and out. They must also receive ongoing sales training and coaching to ensure they stay up-to-date with any changes to the product or the market.
Furthermore, enterprise-level customers often expect higher levels of customization. Those in SaaS sales must understand what is (and isn’t) possible in terms of product customization and integrations.
The length of the sales cycle
Some SaaS sales are quite fast. That’s often the case for software that has a lower price point.
However, long sales cycles are quite common in enterprise SaaS sales. That’s because deals are larger and more stakeholders are involved.
Sellers must be skilled at keeping sellers engaged throughout the entire cycle – no matter how long it may be.
The importance of building customer relationships
Building relationships with customers is important for any type of B2B sales. After all, people are more willing to purchase if they trust the seller.
But customer relationship management is especially important for SaaS sales.
SaaS is a subscription service, which means it regularly comes up for renewal. Building strong relationships is key to increasing satisfaction and decreasing churn rates. Furthermore, relationship building also influences the likelihood of upsells and cross-sales, impacting customer lifetime value (CLV).
The 3 SaaS sales models
Typically, there are three different models, each with a unique way of selling SaaS.
The three common SaaS sales models are:
#1 Self-service SaaS sales
Also referred to as self-service, this is a model in which the customer navigates the purchase journey on their own – without the involvement of a sales rep. The buyer often signs up for a free trial using a credit card, and then a paid subscription starts once the free trial is up.
The self-service model is good for vendors selling a relatively simple, low-cost solution. Marketing is active in self-service, from creating lead generation campaigns to optimizing the sales process.
One example of the self-service SaaS model is an employee signing up for a free trial of a low-cost SaaS solution like Canva. Or, the marketing team at a startup organization might sign up for a trial of a marketing automation platform. After the trial is up, the employee’s or team’s credit card is charged, and they submit the charge for reimbursement.
One example of the self-service SaaS model is an employee signing up for a free trial of a low-cost SaaS solution like Canva. Or, the marketing team at a startup organization might sign up for a trial of a marketing automation platform. After the trial is up, the employee’s or team’s credit card is charged, and they submit the charge for reimbursement.
#2 Transactional SaaS sales
The transactional model is the most common approach. Typically, the marketing team is focused on developing lead-generation campaigns and initiatives to attract prospective customers and get them started on the buyer journey. Then, reps focus on guiding buyers to conversion.
The transactional model is common when products are more expensive, and buying committees are larger. Many B2B buyers aren’t willing to make a significant purchase without some level of involvement from a rep.
Consider a team that needs a way to organize its projects better. The team learned about a specific project management SaaS solution through a paid LinkedIn post. The team engages with different marketing-developed resources, including webinars and eBooks. Eventually, the team submits a request for a live demo. A B2B rep then takes things from there.
#3 Enterprise SaaS sales
The enterprise model is common for vendors selling relatively expensive or complex solutions to enterprise-level companies with large buying committees. These larger deals require a tailored, customer-centric approach where all go-to-market teams are aligned.
In this model, sellers are involved in the entire process – from identifying and qualifying leads to nurturing them and closing deals.
The enterprise model is common for SaaS vendors that sell products widely used across the organization. Some examples include office suites like Google Workspace or CRMS like Salesforce.
The SaaS sales process
The sales process consists of the steps involved in closing a deal. But what does the process involve?
It varies based on many factors, including your organization’s model.
However, several steps are involved in the process.
1. Generating leads
This step involves generating interest in your SaaS solution. A steady stream of leads helps keep your funnel full.
Organizations may employ a wide variety of tactics to generate leads, including:
- Webinars
- Live events
- Paid advertising
- Email campaigns
- Live chat on websites
- Demo request forms
2. Prospecting
Some models involve outbound prospecting. In other words, sales sales reps connect with prospects via channels including:
- Phone
3. Lead qualification
Lead qualification is the process of identifying whether a prospect is a good fit for your SaaS solution. This involves determining whether a prospect aligns with your ideal customer profile. Reps must also work to understand a prospect’s pain points quickly so they can determine whether they have a solution.
Many organizations use a lead qualification framework like BANT (Budget, Authority, Need, Timing) or MEDDIC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion) to quickly qualify leads. That way, sellers can prioritize good-fit prospects.
4. Product demonstrations
Once a rep has identified a prospect’s needs and pain points, it’s time to create and present a solution. Product demonstrations are a great way for leads to see firsthand how a SaaS solution can help them overcome challenges and meet their goals.
Some SaaS providers also offer a free trial period, during which prospects can try out a product for a certain period before committing.
5. Negotiations
Sales negotiations are the back-and-forth discussions between a buyer and seller before a deal is struck. They are common in B2B sales, especially when using the enterprise sales model. It can take time for a buyer and seller to reach a mutually beneficial agreement.
6. Closing the deal
Sales closing involves bringing the deal to the finish line and securing a commitment from the prospect.
7. Retention
Most SaaS is subscription-based. Organizations must make it a priority to delight customers after they’ve closed the deal. Doing so is key to reducing churn and increasing customer lifetime value.
Tips for building a winning sales process
SaaS sales aren’t exactly easy. But with some proven best practices, you can build a winning process that yields predictable, sustainable growth.
Let’s look at 10 tips for a better process.
#1. Determine your model
One of the first, foundational steps is to determine which model you’ll use: self-service, transaction, or enterprise.
There’s no right answer for every business. Instead, the right model for your company depends on several factors, including cost and the size of the companies you sell to.
It’s important to note that combining different models is possible. For example, you might have a self-service offering for small businesses. These businesses can complete the entire journey without interacting with a sales rep. However, you might also have a more robust option for offering for large businesses. For this offering, you may use the enterprise model.
2. Adopt a sales methodology
It’s inefficient for reps to reinvent the wheel for every deal. Instead, it’s best practice to adopt a sales methodology.
Essentially, a sales methodology provides a standard way of engaging with prospects. Some popular sales methodologies include:
Be sure to choose the sales methodology that aligns best with your business.
3. Develop your ideal customer profile
Any rep needs to reach out to good-fit prospects. But first, you must take a step back to determine what a good-fit prospect looks like.
Be sure to develop ideal customer profiles (ICP), which outline the characteristics of a business that fits your SaaS product well. IRPs might include information like:
- Company size
- Industry
- Geographic location
- Pain points
4. Align on lead generation
A steady stream of leads can help keep your funnel full. But when it comes to leads, quality is more important than quantity.
Sales and marketing teams need to be aligned on lead generation. That way, marketing understands the best type of leads – and can work to generate more of them. And, SaaS sellers won’t waste their time on dead-end leads.
5. Qualify leads quickly
Lead qualification is a key step in the process. Consider leveraging a sales qualification framework like BANT to help reps quickly identify which prospects are worth their time.
In addition, be sure to provide training, sales enablement, and coaching to ensure your reps master the key skills needed to become experts at lead qualification.
6. Develop sales content that’s aligned with the purchase journey
B2B buyers rely on content to make informed purchase decisions. SaaS buyers are no exception.
Be sure to provide your B2B sellers with sales content to engage and inform buyers – no matter where they are in the B2B sales cycle. Use a sales content management system to centralize all content. That way, sellers can easily find relevant sales content to use with any lead.
7. Centralize customer engagement
Often, several stakeholders are involved with a SaaS purchase. Each stakeholder has its own needs and preferences, making it challenging for reps to keep everyone aligned.
Digital sales rooms provide a central hub for all engagement between buying and selling groups. With a digital sales room, SaaS buyers and sellers can share content and information, ask and answer questions, and collaborate on mutual action plans.
In addition, digital sales rooms enable reps to see how different buying committee members engage with content and information. Sellers can use these insights to adapt their approach – and improve outcomes.
8. Deliver tailored training and sales enablement
Sales reps must master certain skills to excel. The first step is to determine what those must-have skills are. You can document them in an Ideal Rep Profile.
Then, focus on creating training and sales enablement that help your reps build those skills.
It’s important to remember that learning opportunities must be personalized to be effective. Measure each rep against your IRP regularly so you can understand their unique strengths and weaknesses. Then, deliver targeted enablement and learning paths that help your sellers bolster weaker skills – and boost their performance.
9. Provide targeted coaching
Ongoing coaching helps reps build the skills they need for success. Research shows that top-performing sellers receive significantly more coaching than their lower-performing peers.
Manager-led coaching is an important part of the puzzle. But today, innovative organizations also tap into artificial intelligence to deliver real-time feedback at scale.
For example, an organization may use conversation intelligence software, which records and analyzes sales calls and provides the seller with immediate feedback. Other organizations use AI role-plays, which enable their reps to practice their selling skills with an adaptive AI bot. Sellers get real-time coaching and feedback, which they can use to perfect their skills before putting them to the test in the field.
10. Measure and optimize continuously
Ongoing measurement is key to understanding what parts of your SaaS sales process are working well and where there are opportunities for improvement. In the world of SaaS sales, some metrics that are particularly important to track include:
- Customer lifetime value
- Monthly (or annually) recurring revenue
- Churn rate
- Customer acquisition cost
It’s also important to track metrics related to seller performance. Some examples include:
- Overall conversion rate
- Conversion rate at each stage of the SaaS sales cycle
- Sales cycle length
- Quota attainment
Look for trends and dig deeper to understand the why behind the numbers. Then, deliver targeted coaching to help each SaaS sales rep improve their skills and performance.
Get ready to master SaaS sales with Mindtickle
Increasingly, businesses are embracing the convenience and scalability of SaaS solutions. But that doesn’t mean SaaS sales are a walk in the park.
Every SaaS sales rep needs the right training, tools, and resources to engage buyers and close deals. With Mindtickle’s all-in-one revenue enablement platform, your sellers will have everything they need to be prepared to conquer any deal – all in one place.
With Mindtickle, you can create ideal rep profiles to define the skills and competencies Saas sales reps need to be successful. Then, you can deliver tailored training, enablement, AI role-plays, coaching, and more to ensure each seller can master the skills that matter. Mindtickle also equips sellers with tools they need to effectively engage SaaS buyers throughout the purchase journey, including sales content and digital sales rooms.
Crush SaaS sales with Mindtickle
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By Christian Pieper
By Rahul Mathew