How to Choose the Best Sales Method for Your SaaS Business

You’ve spent a lot of time and effort building your software-as-a-service (SaaS) company. You know everything there is to know about your SaaS product’s features and benefits, but the sales process is still difficult. You want your customers to get the most out of what you’ve created, which means they need to buy into what you’re selling.

In today’s market, it is more important than ever to have an effective sales process. However, many sales representatives are not utilizing the right sales model to generate leads and close deals. Meaning, the problem is that the sales model they’re using is not a great fit for their type of business. It’s a very casual approach which generally involves approaching someone in person with a product. 

Sales can be difficult at times, but if you follow our tips on how to sell SaaS products, you’ll find that closing sales becomes easier than ever before. But before going through the sales methodology tips, let’s have a better understanding first of the different SaaS sales methods.

Types of SaaS Sales Model

While the different types of SaaS sales model may seem similar on the surface, they can vary quite a bit from one to another. Here are some of the most popular types of SaaS sales models:

Direct sales

Direct Sales is the most common type of SaaS sales model. It’s used to sell software and other digital products, but it can also be used for physical goods. The vendor provides a product or service directly to customers via in-person meetings, online chats or phone calls. In this model:

• The customer pays the vendor directly for the products or services they receive (e.g., monthly subscriptions).
• Vendors provide products and services directly to their existing customers without any intermediaries (e.g., distributors).

Outbound sales

One popular sales model that is often unsuccessful is outbound sales. This is because customers do not view SaaS as a necessary product. Customers only see the benefits of using the product and do not consider the cost. Sales people must convince customers that the product is worth its price. They must also show how the product will benefit their work or their organization.

Outbound sales consists of selling products or services to customers who have not contacted you first. This method can be successful when used in conjunction with other marketing channels, such as email marketing and social media advertising. 

When done properly, outbound sales can help you identify interested buyers before they even contact you and build trust with potential customers. However, if your outbound sales process is ineffective, prospects may become frustrated and eventually stop contacting you altogether.

Transactional sales

Transactional sales involve selling software through a sales process that typically includes demos, talking to potential customers, and closing deals. Unlike direct sales that involves directly contacting customers and selling them the software, in transactional sales you have to go through a middleman. 

There are pros and cons to each approach. Transactional sales can be more efficient because the seller can track progress throughout the sale. This method is also better suited for larger companies that have a larger customer base. Direct sales can be more personal because the seller can connect with potential customers one-on-one. However, this method is less efficient because it requires more time and effort to sell the product. 

Affiliate

Affiliate is a sales model where an affiliate sells a product or service and receives a commission for each sale. In the affiliate model, the affiliate does not own the product or service and does not develop it themselves. Affiliates are typically found on websites that offer products or services for sale, such as eBay and Amazon. The affiliate program allows websites to generate revenue by placing links on their website to the merchant’s website. When a visitor clicks on the link, they are taken to the merchant’s website where they can purchase the product or service.

The benefits of using affiliates to market and sell SaaS products are clear: affiliates drive traffic to the product, which can lead to more sales. However, there are several factors that can affect how effective an affiliate sales model is in selling a particular SaaS product.

First, it’s important to consider the size and scope of the affiliate program. If an affiliate program is small, it might not be effective in driving traffic and consequently sales. Conversely, if an affiliate program is large, it could inundate customers with links and ads, making it difficult to find what they’re looking for.

It’s also important to consider the quality of the product being marketed through an affiliate program. A product that’s not well suited to driving sales or even being part of the affiliate program could put a damper on the affiliate program. For example, a product that’s difficult to understand or purchase could be detrimental to the affiliate program. The last thing an affiliate program needs is to be associated with products or services that aren’t aligned with the brand image of the company.

Then, there’s the cost factor. An affiliate program that’s not properly set up or managed could be costing the company money. For example, if a program is poorly managed, then it could end up costing the company money in lost sales and missed revenue opportunities.

Reseller

SaaS resellers are independent companies that can sell your SaaS products. They do not have direct access to the customer data and must rely on third-party information, such as CRM providers or marketing automation platforms to keep track of their sales and customer base.

Reselling involves buying a subscription from the vendor and then selling or renting that subscription to their customers. This is an effective sales model for both the saas company and the SaaS reseller, as it allows both of them to build a large customer base quickly. 

A great example of a reseller program is Sell SaaS. This service gives you the ability to launch one of their software as your own, and customize it with your own branding, logo, colors, and so forth. You only have to pay their subscription fee to be able to do this. The reseller makes profit through split revenue from the licensee based on the percentage of sales.

However, resellers have several disadvantages. First, they must devote a significant amount of time to selling subscriptions, and they may not make as much money per sale as affiliates do. Second, resellers are typically not allowed to promote their own products in their customer’s accounts. This limits their ability to generate leads and increase revenue.

Unlike affiliates, resellers are not paid a commission or percentage of sales. Rather, they receive a fixed amount per sale from a revenue sharing business model. There is also a fee for storing customer data, and some resellers have contracts requiring them to pay fees for exceeding certain limits on the number of accounts.

Marketplace

In this model, buyers are customers of the sellers and the sellers are typically SaaS providers or technology service providers. The marketplace is a platform that connects buyers and sellers through an online interface to facilitate transactions between these two parties. This means that there is no direct relationship between them; instead, they rely on their mutual relationship with the marketplace.

The benefits of using an online marketplace to sell a SaaS product are numerous. First, an online marketplace makes it easy for potential customers to find and research the available SaaS products. Second, an online marketplace provides buyers with a wide range of options for purchasing the product. Finally, an online marketplace can help increase sales by providing sellers with increased visibility and exposure. However, selling in a marketplace is more like a situational strategy, which can be effective for some SaaS, but not others. 

For example, a SaaS product that is well-known among potential customers can be a great candidate for a marketplace like Appsumo, but a SaaS product that is relatively unknown may not be a good fit for a marketplace. 

Moreover, the timing of when to use the marketplace can be just as important as the product being sold. For example, if a company is just getting started with their SaaS business and doesn’t have the capital to purchase a server, they may not want to sell on a marketplace with a huge customer base as the sales may potentially skyrocket. Nonetheless, there are also SaaS startups striking a deal with Appsumo for a certain period (say 3 months) to introduce their app to Appsumo’s users and gain quick revenues by selling lifetime deals on their apps.

Trial & Error

In the trial and error model, companies offer a free trial of their product to potential customers. Customers can then decide whether they want to continue using the software or not. This is a good model for products that are still in development or have yet to be widely adopted and tested by users.

The downside of this sales model is that it can be difficult for companies with relatively unknown brands and products to generate enough interest from potential customers during their free trials without investing heavily in marketing efforts. However, even if they do find success through paid advertising on social networking sites like Facebook or Twitter, there is no guarantee that those leads will convert into paying customers-and thus cost-effective marketing campaigns might be necessary just as often as they’re successful when it comes time for renewal periods or upgrades (or if new versions require new purchases).

Streaming

Streaming is a subscription model in which the customer pays a monthly fee to access software that is hosted on the vendor’s servers. The vendor provides the software and hosts it on its servers, so all you have to do is sign up and log into your account from any computer connected to the internet. As long as you continue paying your fees, you can use whatever features are included within your plan. 

This type of SaaS model can be used for both enterprise and small business customers because streaming requires less upfront investment than traditional desktop software purchases; however, there will be an ongoing cost associated with maintaining your subscription (typically around $10/month).

Licensing

Licensing is a software licensing model in which the software is licensed on a per-seat basis. This means that users pay for each user of the software, like renting instead of owning it. It’s also known as “pay-per-use” (PPU). When you buy SaaS licenses, you are purchasing access to a service that allows your employees to use certain features within the platform. 

For example, if you have five employees in your company and need to use Salesforce’s Sales Cloud product for sales automation, then you will need five licenses from Salesforce at $200 per month each ($10k annually) with additional costs for add-ons (e.g., custom reports or integrations).

The Reason for the Failure of SaaS Models

You may have wondered why there are so many SaaS companies out there but only a few of them are doing well. Well, that’s because not all SaaS models are created equal. In fact, some are more likely to fail than others. So what makes one SaaS model more successful than the others? Let’s dive into this topic!

You may have wondered why there are so many SaaS companies out there but only a few of them are doing well. Well, that’s because not all SaaS models are created equal. In fact, some are more likely to fail than others. So what makes one SaaS model more successful than the others? Let’s dive into this topic!

Below are the five main reasons for failure of enterprise sales models in the SaaS industry and how they can be avoided.

The SaaS sales team is not ready for the changes

The team of sales reps is the first line of contact for your customers, so it’s important that they are trained and comfortable with the new technology. They need to understand how this will impact their workflows and be able to demonstrate its value to clients. If you don’t have a good grasp on what these changes will look like at all levels, you’re going to have trouble getting everyone on board with SaaS adoption in your company.

The company does not create a customer success team

This is one of the most common reasons why SaaS sales models fail. The customer success team is a group of people who work with customers to help them use the product and achieve their business goals through it. It usually consists of engineers, customer service reps, and account managers. A good CS team will:

• Solve problems for users quickly when they arise.
• Answer questions about how to use your product more effectively.
• Provide support when you need it.

The company does not filter out bad customers

One of the most important steps in building a successful SaaS business is to identify and eliminate bad customers. A company needs to define the right criteria for customer selection, have a clear vision of what type of customer it wants to work with, and know how to identify a bad customer. 

A good approach can be described as “Good-to-great”, while a bad one is “Fill my funnel at any cost!” This approach will lead you nowhere in the long run, because your customers will quickly leave and never come back again, which leads us to our next point…

Lack of data and analytics

Many executives and sales leaders believe that data and analytics are critical to improving their B2B SaaS sales process, yet their teams aren’t equipped with the tools they need to get the job done. The problem isn’t a lack of data; it stems from a lack of access to that data.

Here are ways your team can overcome this obstacle:

• Create a centralized data repository that’s accessible across the organization.
• Define a data governance framework that specifies how data is collected and used, who has access to it, how long it can be stored and when it should be deleted. 
• Identify the highest value sources of data for sales-whether those are internal or external-and establish a process for collecting this information.
• Hire data scientists or other professionals who can help you make sense of the data and use it to improve your sales process and speed up your SaaS sales cycle.
• Build a team of B2B SaaS sales reps responsible for collecting, analyzing and reporting on key metrics that indicate the health of your sales organization.
• Create a culture where people feel comfortable sharing their ideas, even if they are different from yours.
• Train every SaaS sales rep on the team in data science concepts so they can take advantage of the information at their fingertips.
• Create a structure for collecting and using data that’s accessible to everyone in the organization.
• Develop a process for identifying, collecting and storing data that’s consistent across your organization. 
• Build out a dashboard that provides real-time access to key metrics and performance data so you can make quick decisions based on what’s happening in the market right now.

Some of the most important SaaS metrics to track are customer acquisition cost

• monthly recurring revenue
• annual recurring revenue
• net promoter score

Low speed of decision making

The main reason for the failure of SaaS sales models is that the company does not create a customer success team. This is why they don’t succeed in their work, and what leads to the failure of their business model.

The second reason is that companies do not filter out bad customers; instead, they focus on new customers only. Another thing that slows down the speed of decision-making at startups is lack of data and analytics, which leads to incorrect or unclear information being given by sales managers about potential deals.

Another reason for this type of failure could be low speed of decision making-it takes too long for someone to make a decision about purchasing a service from you! And finally changing professional skills in sales managers might also prevent them from succeeding with this kind of project-their professional experience may not fit within such an innovative approach

Mismatch in the professional skills of the sales manager

Sales managers need to have strong professional skills in order to succeed with SaaS sales models. Sales managers at traditionally-owned companies typically have a mix of professional and sales management skills. However, most SaaS sales models require a different set of skills. For example, sales managers at software companies need to be experts in SaaS product development and marketing.

In contrast, sales managers at internet companies need to be good at customer service and lead generation. The mismatch between the skills required for success with SaaS sales models and the skills possessed by most traditional sales managers has resulted in the failure of many SaaS companies.

So as you’re hiring your sales managers, look for people who have experience working in these areas-and remember: it’s not just about their resume; it’s about how well they do the job once they start working for you!

Tips on Choosing the Right SaaS Sales Method

When it comes to choosing the best SaaS sales method for your business, there are a few things to keep in mind as follows:

Always consider the customer

It’s important to remember that your customer is king. Your customers are the reason you have a business, and they are your lifeblood. Ultimately, if you have no customers or prospects who need what you’re selling, then there will be no money coming in.

If you want to grow your SaaS company as fast as possible with almost no risk whatsoever and make more money than ever before in your entire career-this is how it can happen!

It’s called the art of selling, and it’s not just about getting your prospects to buy whatever it is you’re selling. It’s also about making sure they get value from what they buy-and that means helping them solve their problems.

If your potential customer is struggling with something and you can help them solve that problem, then they will be much more likely to buy from you.

Here are some tips for customer-centric selling SaaS:

• Focus on value, not price. Make sure your prospect understands the value of what you’re offering.
• Don’t just sell; educate first! The best way to sell SaaS is not by simply trying to get your prospects to buy whatever it is you’re selling. Instead, focus on educating them about the problem they have and how your SaaS solution will help solve that problem. Once they understand the value of what you’re offering, then they will be much more likely to buy from you.

Be upfront about pricing

As a SaaS business owner, you need to be very careful about how you price your services. The first point of contact in most SaaS sales is through the website, and this is where customers will decide whether or not they want to stay on with your company. Therefore, it’s important that your pricing page clearly outlines what each package entails and what benefits come with them.

Make sure that all pricing tiers are easy to understand and compare between one another so that users can make an informed decision about which plan suits their needs best. And if there are any additional costs associated with using the software (for example: support costs), make sure these are clearly displayed too.

Another important thing to keep in mind is that the price you set for your software should be reasonable. If it’s too low then customers will assume you aren’t providing a good quality service and won’t be satisfied with what they receive. However, if it’s too high then customers may feel like it isn’t worth the money and will look elsewhere. In order to find the perfect balance between these two extremes, use competitor pricing as a benchmark for how much your products should cost.

The last thing to keep in mind when creating your pricing page is that it should be easy to use. Make sure all of the information on there is clearly displayed and organized so that users can easily find what they’re looking for.

Educate the customer on the product

The first step in the sales process is to educate the customer on what your product does and how it works. You’ll want to explain how the product benefits them and why they need it, as well as show them how they can use it in their everyday life. If you have any cool features that make your product unique, this is a great time to talk about them!

This will take some preparation on your part: you should be prepared with an elevator pitch explaining why your company exists (and why people should buy from you), as well as a more detailed explanation of how exactly customers will use/benefit from/be interested in buying from you.

Next, you want to talk about the product. This is where you’ll explain what your product does and how it works. If there are any cool features that make your product unique, this is a great time to talk about them!

This will take some preparation on your part: you should be prepared with an elevator pitch explaining why your company exists and why people should buy from you, as well as a more detailed explanation of how exactly customers will use/benefit from/be interested in buying from you.

Finally, you’ll want to talk about what makes your company different from the competition. This is where you can highlight any awards or recognition that your business has received, as well as explain why your product is better than other similar products on the market.

Focus on the benefits

In sales, you want to focus on the benefits of your product or service. You should be able to describe what makes your product unique and how it will help the customer. For example: “Our software is easy-to-use and saves you tons of time.” Or “Our software can help you increase your revenue by 20%.”

Your goal is to make the customer feel like their life will be better with your product. You want them to see how it can improve their business and make them more money. It’s important to focus on benefits because they are what drive customers’ decision-making.

For example, let’s say you are selling a product that can help your customer grow their business. You want to focus on the benefits of this product and how it will help them grow their business. A benefit is something that will make your customer’s life better in some way. For example: Our software helps increase revenue by 20%.”

You want to keep your pitch short and sweet. You should be able to tell the story of your product or service in a few sentences. If you’re struggling with this, then try writing down what makes it unique and how it benefits customers.

Final Thoughts

Having the right SaaS sales model is a great way to expand your SaaS business through closing more deals, acquiring new customers, and then scaling your business over time. It might take some time to set it up, but there are many tools available that can help you manage everything from onboarding new customers to reporting on your growth. While some types of sales models may be more suitable for certain types of SaaS businesses (depending on what product they sell), ultimately it’s up to you which one works best for your needs. 

Like in any other industry, in a SaaS company customers are the main value of your business. Therefore, as we mentioned earlier, it is crucial for you to maintain a good relationship with them.

With this in mind, it’s important to understand that customers will not be satisfied if they feel like they’ve been taken advantage of. If they feel like they paid too much money or received a poor SaaS product or customer service from your company (even though both may actually have been perfectly reasonable), then word will spread quickly and fewer people will want to buy your SaaS as time goes by.

We also talked about the main factors that can lead to the failure of SaaS sales models. It’s best to keep them in mind, so if ever the time comes that you experience a harder time closing sales, then at least you’ll be aware of what might be the problem.

Do you need more help in growing your SaaS business? Check out our blog for more marketing tips!