A Complete Guide to SaaS Sales in 2024 | SaaS Academy

Of all the industries experiencing a boom, SaaS (Software-as-a-Service) is leading the pack. SaaS sales reps enjoy a highly lucrative career path, and any one of them can attest that this is one of the most rewarding, exciting, and well-paid fields you can get into right now.

Whether you’re an experienced SaaS founder looking for a new way to explore the industry or one of thousands of experienced sales reps who are ready to tackle a new niche, you’ve come to the right place. In this guide, I’m going to explain SaaS sales from top to bottom, and by the end, you’ll have the tools you need to succeed.

It’s important to know that even if you have an extensive background with years of sales experience, you’re going to need to have a very deliberate and specialized set of strategies to sell SaaS products. There are distinct qualities in the SaaS industry that are quite different from other industries you may have worked in, and some of those qualities present challenges that you may not have faced before.

On the other hand, you will find that SaaS brings with it unique opportunities for success, high earnings, and personal and professional growth that surpass other industries. If you’re willing to put in the time and effort to develop the right sales strategy, SaaS sales has the potential to be a life-changing career path.

What Makes Selling SaaS Different from Other Types of Sales

When you’re selling software, you’re approaching a potential customer with a very expensive product. While many salespeople have the task of selling a product and then walking away after closing deals, you will be focusing on cultivating and maintaining a customer relationship for the long term.

With each qualified lead, you will face (often in person) your target audience and your job is to sell more than just SaaS solutions. You’ll do plenty of product demos, but the SaaS sales process isn’t just about giving presentations and filling your sales pipeline. A large part of the draw of web-based software is that it simplifies your customer’s life, so you have to sell them on the value of ongoing customer support and the convenience of a subscription-based pricing model.

Your relationship with your customer will involve regular check-ins to make sure they’re happy with the product. You’ll contact them periodically to attempt upselling or cross-selling them on new features and services. You’ll address any pain points before they lead to churn. Your main focus will be customer success. Because of the unique nature of software sales, you’ll likely receive sales training that is specialized for the industry.

Challenges in Selling SaaS and How to Overcome Them

The SaaS sales cycle is longer than other industries because the products are complicated and costly, and sales professionals have to be ready to address any potential concerns immediately. Your response time needs to be unmatched — especially because the competition is endless and ready to outpace you if you slip up.

Startups are everywhere, and even if you’re offering an excellent product, you’re probably not the only one. You have to be on top of your game at all times if you want to compete, and that means knowing your product and your industry inside and out. It helps if you know what your competitors are offering, too, so that you can prove to potential customers that your solution is superior.

Selling SaaS is unique, so your sales techniques need to be, too. If you’re not a tech expert, it’s time to consider becoming one. Immerse yourself in the world of SaaS, learn the language, and understand what customers want and what they need. Doing so will help you develop proven lead generation strategies and maximize customer retention.

B2B SaaS is one of the most exciting spaces you could get into right now. But you need to be prepared for countless phone calls with decision-makers, perpetual availability, the perfect balance of follow ups without being overbearing, and brainstorming sessions with your marketing team. It won’t be easy, but it will be worth it.

Tips for Developing a Successful SaaS Sales Strategy

You can walk into a meeting with a potential customer, tell them all about your SaaS business and the product you offer, and hope they like you enough to onboard same-day.

Or you can take the time to strategize, figure out exactly what makes your target audience tick, and prove to them in one sitting how you can add value to their lives. I can promise you that this method is going to lead to better outcomes every time.

The following tips can help you get started.

Everyone loves a free trial. Look at Salesforce, for example. They offer a 30-day free trial of their CRM product that shows potential customers everything they need to know about whether this system will work for their needs. If you do offer this perk, consider using automation features that will allow a seamless transition from a free trial to a paid subcription. Don’t walk away, though; you need to be present, available, and engaged with your leads during their trials so that they have the guidance they need to understand all of your product features.

Speaking of CRMs, it’s a good idea to use one to make sure nothing falls through the cracks with your leads. You need to stay sharp, and it’s hard to do that if you don’t know where your relationships stand.

Congratulations, you’ve onboarded a new customer! While it’s fine to want to bring in new leads, you need to make sure to maintain the relationships you’ve already cultivated at all times. There will always be opportunities to upsell and cross-sell, and that will have a positive impact on MRR and ARR as well as your commission. Don’t assume that your work is done once a customer signs on the dotted line.

Your marketing efforts matter, and part of that should be meeting your customer where they’re at. Take advantage of the fact that Americans spend an average of over two hours a day on social media. Use platforms like LinkedIn to advertise, offer thought leadership pieces, and connect with stakeholders.

Basics of the SaaS Sales Process

The SaaS sales funnel is admittedly longer than those in other industries. That isn’t necessarily a bad thing; it just means there are unique considerations to keep in mind. Your sales funnel might look something like this:

1. You’ve identified new leads and told them all about your product.
2. You’ve pitched or demonstrated your product and garnered the interest of your prospects.
3. Your prospects have shown intent to move forward with a subscription.
4. You’ve used your training to sell them on the product, identified which plan works best for them, and secured a new customer.
5. The customer makes their purchase and is now on board.
6. You work to maintain a customer relationship by providing regular support.
7. You use the relationship to cross-sell and upsell when appropriate, increasing MRR and ARR.

There are dozens of ways to label the stages of a SaaS sales funnel, but the bottom line is that it’s a process that allows you to build a relationship from the ground up and maintain it long-term.

Ideally, from the time a prospect becomes aware of your product to the end of their first cycle with you, you will have cultivated an atmosphere of loyalty, and the customer will be happy to continue their use of your product with your support.

Understanding Different SaaS Sales Models

Let’s break down the SaaS sales models for a better understanding of the process. Ultimately, you have three options: self-service, transactional, and enterprise. Each has its own advantages and challenges and works best for specific scenarios. While theoretically, you could choose any to start, there is likely one model that will best serve you based on the size of your sales team.

Self-Service Model

In a customer self-service model, your potential customers can sign up for free trials without needing to maintain a relationship with a representative. As the name suggests, customers can handle the onboarding process themselves by signing up online. This inbound model is great for small sales teams and SaaS solutions on the less expensive side.

Transactional Sales

Transactional sales are used by more robust sales teams. In this outbound model, salespeople focus on outreach to bring in customers at a price that works for them. This method is personalized, scalable, and popular with highly trained SaaS sales teams who know exactly how to generate leads and follow through.

Enterprise Sales

Enterprise sales is complex and labor-intensive, but has the highest return when done right. This model requires a large team to keep all the moving parts running smoothly. Every department needs to be on the same page at all times to cater to a high level of customer support around the clock.

Key Metrics to Measure Your Success

KPIs are an important part of any sales job. These SaaS sales metrics simplify the measurement of progress and success in SaaS sales and can help you target areas of improvement when needed.

MRR (monthly recurring revenue) and ARR (annual recurring revenue) track the amount of revenue that SaaS companies receive from subscribers on a recurring basis. MRR and ARR are helpful in predicting future profits and can help you isolate the revenue you receive from subscriptions versus other sources.

CAC (customer acquisition cost) is the amount of money you spend onboarding new customers. This includes content marketing, advertisements, and anything else you spend to get potential customers in the door.

CLTV (customer lifetime value) is the amount you can expect to earn from a given customer throughout their entire relationship with you. This metric is critical for SaaS sales representatives who have a tendency to under- or over-spend on CAC. The CLTV can help you determine the most efficient strategies for making the most of a customer relationship.

SaaS churn is the metric that tells you how many of your existing customers are cancelling or downgrading their subscriptions. This has a direct impact on company success, and more directly, your commission rates. Maintaining a low churn rate is essential, and you can do so by emphasizing your customer service efforts.

SaaS Sales Compensation

You’ll find a pretty vast range in terms of compensation for SaaS sales reps. That’s because the amount you can earn largely depends on you — your experience, your personal sales strategies, and how well you’re meeting your metrics.

Regardless of industry, most salespeople can expect to earn a base salary commensurate with their experience and the market average. But what sets sales roles apart from other jobs is the commission that representatives earn for each sale.

Let’s look more closely at the ranges you might see in SaaS sales salaries.

(Sources: Aspireship, Glassdoor)

As you can see, there’s a great deal of variance here, but the most important takeaway is that the earning potential is quite high once you’ve committed to a career in SaaS sales.

How to Turn SaaS Sales into an Exit Strategy

Once you’ve mastered the art of SaaS sales and scaled your business, you might be ready to start thinking about your exit strategy. The truth is, you should start thinking about that as early as possible. There is a lot of preparation and planning, and you’ll want to be as detailed as you can.

Your exit strategy is just a scaled-up version of the sales strategies that have already proven successful. You know what you have and how it can benefit a potential buyer, so you just need to translate that knowledge into a well-prepared presentation, a hands-on transition, and a firm handshake as you walk away with the fruits of your labor.

Conclusion

In this guide, we’ve reviewed the concept of SaaS sales, from the need to develop unique sales strategies to the challenges presented by the industry. We looked at how SaaS sales differs from other types of sales.

You learned a few tips for building the perfect sales strategy, and we covered a breakdown of the entire SaaS sales process. You even have an idea of the kind of income you’ll be looking at in an SaaS sales role.

Now that you have an understanding of the different sales models, what metrics to watch for, and how you can take what you’ve learned and turn it into an exit, you’re ready to be on your way selling SaaS.

With no shortage of competition and struggle out there, I hope this information has now empowered you to move forward with this exciting stage in your career.