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 successfully selling SaaS. The product team and marketing has 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 successfully sell SaaS products to other businesses and government agencies.
Table of Contents
For a long time, software was a one-time purchase. People got a copy of the software 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 was 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 services. This has required a shift in selling software. 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 first call, commonly referred to as 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 process 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:
Step 1: Understand the customers challenges and needs.
Step 2: Seek information about the prospect’s decision process or help them create one.
Step 3: Provide information the customers need at each stage of their decision process.
Step 4: Map the solution to the desired outcomes and the decision process that the customer has in mind.
Step 5: Ensure that the solution can deliver value to the customer and address any concerns they have about the product or the sales process.
Note that the process above does not have a seller talk about their own solutions till 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 then moving on to map the solution to the client’s needs.
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.
There is a lot more that goes into selling SaaS effectively. The skills are not always intuitive so it is important to be prepared with the proper sales training. If you want to discuss your training goals in more detail, be sure to request a meeting with us today.
Request a free sales consultation to get started
Tyler Vance works closely with the participants and managers of Funnel Clarity’s training programs to ensure they achieve their expected results. Throughout Tyler’s career, he has experienced both a seller’s and buyer’s point of view bringing a unique perspective when working closely with Funnel Clarity clients. Whether Tyler is answering questions from participants, running a coaching session, webinar series, or working with managers to develop a reinforcement plan, he brings a unique and fun element into every part of his role.