The SaaS industry is already a multi-billion dollar industry, and it's continuing to expand. The industry has a compounded expected annual growth rate of 11% from 2022 through 2028, according to Grand View Research, and as such, this market is likely to be worth well over $344 million by that time. This isn’t just a U.S. service model either. When it comes to SaaS, countries around the world are active potential customers.
Taking a piece of that means learning how to sell SaaS B2B for today’s environment. Software-as-a-service (SaaS) is any type of cloud-based software delivery model, and it’s one of the most effective ways for companies to obtain the services they need over time while maintaining the latest innovations. Those companies, your customers, typically make payments annually to continue to access the service. I’ll tell you what I tell all of our SaaS Academy founders: the key is offering a fantastic SaaS product and then selling it consistently.
SaaS is very much a different business model than what’s typically found in your average product and goods sales service. The sales process, then, needs to be updated to meet the needs of the companies most likely to provide these services.
As noted, SaaS market projection is impressive, with some companies indicating that, by 2026, this industry will easily be valued at $307.3 billion. How can you take advantage of it within your organization? You absolutely need to improve your sales team skills and target the right potential clients.
We’re going to break down the differences between SaaS sales and other industries and then crack the code on how you can beat the competition to market with a killer presell pitch.
From early adopters until now, the B2B SaaS sales model has changed somewhat, but it’s also remained remarkably the same. Some of the most important differences that all SaaS companies need to realize is the difference in the sales cycle and the overall business model:
Developing a SaaS sales strategy is critical to success. While having a solid product that is substantially different or otherwise offers some value to the target market is the first step, once you have that product, consider the following five key steps.
The initial stage in most SaaS sales strategy models is to find potential customers who need and could benefit from the product and service. Ultimately, the product or service is created around a specific target audience, offering highly specific solutions to resolve their issues. Then, the goal is lead generation through one or more methods:
To be effective, the SaaS sales funnel must start by incorporating high value content, education, and a clear return on investment for the customer. Lead generation should focus on building credibility within the company and the product, becoming an industry leader within it.
The next component of the SaaS sales strategy is outbound prospecting, which is often much different than what is done in other business models. Sales teams head out to find potential customers within the target market. By utilizing various touchpoints, both online and in-person, sales teams are able to generate interest in the product and provide highly effective insights that develop relationships.
Outbound prospecting should incorporate a range of methods, including:
To maximize both SaaS marketing ROI and the overall success of customers, companies need to quickly qualify potential leads to ensure they are a good fit for the type of product and service, costs, and overall needs the company has. To do this, organizations should:
At this point, customer success is not yet assured. The sales team recognizes that the product or service is a good fit and that the customer profile aligns with the services available. The next stage, then, is to offer a demo to sell the product to the customer.
Sales demos are typically only offered to those who are qualified to ensure product features and funds are not wasted on those who may not be able to use these services. Demos are not all equal. For the best outcome, focus on providing the following:
The final step is transactional – close the deal. Get the customer to purchase the product or service at the tier that’s best suited for their needs. At this point, there may be requirements to negotiate contract terms or to assess any customer concerns. Once there’s an agreement in place, signing the contract is next.
There are a lot of advantages to selling your product before it's even built. Primarily, that these early adopters end up funding the development! Check out my tips on pre-selling in the video below:
This is a really fun way to pitch your product in the early stages of SaaS product development . Here is a list of 30 great SaaS pitch decks. These are some of the best we've seen.
Key to mastering the sales funnel in this industry is tracking core metrics. We've discussed a few before, but here are some of the most important metrics to track:
To scale your SaaS, invest heavily in an ongoing push forward. That means consistently monitoring growth, churn rate, and SaaS marketing to better align with your goals. Some tips for developing a strong strategy include:
The SaaS sales cycle will typically last 84 days (as an average). If the ACV of the company is under $5,000, then the sales cycle is shorter at about 40 days. Those with an ACV of over $100,000 can expect a sales cycle as long as 170 days.
Utilize the available metrics to consistently monitor the B2B SaaS sales cycle, including average purchase value, average purchase frequency, average customer lifetime spend, average customer value, and average customer lifespan.
Heavily focus your efforts on the problem-solution model. Who has a problem that your product resolves? Factors to consider in this could include the industry and location, as well as the company’s size and number of employees that may need to access the product. Sales, revenue, and business trends are also valuable here