Following the success of Salesforce over 20 years ago, numerous companies have been offering SaaS solutions for various business functions. The market also readily responded to these new initiatives as software deployment time was reduced from several weeks to just a few minutes in the SaaS model. Apart from the reduced installation hassles, SaaS vendors can make feature updates, bug fixes and security updates on the fly.
With the entry of many new start-ups and established companies looking for newer ways how to increase SaaS revenue and capitalize on the growth of SaaS products, the application services market is now expected to reach $113.1 billion in 2021, up by almost twice from the 2017 revenues of $58.8 billion, according to a Gartner study.
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The number of SaaS products increased from 500 to 8500 between 2007 and 2017 and during the same period, every SaaS startup faced competition from nine other firms competing in the same segment. Given this competitive scenario, let’s see how, as a SaaS vendor, you can capitalize on the potential growth that the cloud industry is set to offer. The SaaS market is a tough nut to crack and it requires a different selling approach when compared with on-premises software solutions. You should be prepared for longer sales cycles and provide various buying options for your buyers.
When we talk about sales, we have to look at conversion rates. Research shows that the average conversion rate for the SaaS industry is around 7% and only 25% of free trial signups convert as paid customers. If your conversion rate is below these benchmark figures, don’t worry, you can follow these steps to improve your conversions significantly.
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Here are the six takeaways to boost your SaaS sales
1. Interact with customers during the trial period
For any SaaS product, the user would be interested in gaining firsthand experience on how the software works before committing long-term. Research shows that a 14-day trial period is ideal for the user to reach a decision. You should immediately follow up with your customer after the initial sign-up with a phone call to find out more about their needs and share information on product features to suit their requirements.
2. Email automation plays a major role in sales conversion
Low-cost SaaS products see a huge volume of sign-ups and it may be cost-prohibitive for the sales team to follow up with each customer over the phone. If your annual revenue per user is less than $5000, then your business needs to operate on a self-service model without touchpoints from your sales team. Seamless activity-based email drip automation holds the key to nurturing your prospect till they decide to stick with the software.
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3. Understand your customer and customize your demo
Make sure that you understand your customer needs before you organize the demo. The demo should be customized to show how the software meets their needs within the first 15 minutes. These days everybody has a short attention span. Focus your entire demo on how your product can save them money, improve their business operations and boost their revenues.
4. Understand your competitor's product well
Your sales team must be fully aware of your competitor’s products and their pricing strategies. To survive in a SaaS market, the prices have to be very competitive. Also, your sales team needs proper training to impress upon your customer the value of your solution by comparing your features with that of your competitors and highlighting the USP of your product. If needed, offer discounts to close the deal.
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5. Be persistent, but don’t annoy them
Ideally, you should be calling your customer only if the annual order value is more than $5,000. The margins should be high enough to justify in-person follow-ups. For these high-value products, the sales cycles are a bit longer and regular emails and follow-ups are required until the customer signs up. Whether you choose to send an email or call them, it should not exceed 2 or 3 in a month.
6. Keep the ‘context’ alive in customer interactions
In a customer journey, as a salesperson, you will have multiple interactions with each prospective customer over a period of time. You may send emails; share information through links and attachments; answer their queries in chat etc. It is this ‘context’ that equips you to act and engage with your prospect holistically till he becomes your customer.
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In the above example, as a salesperson, you can organize the Workspace (context) ‘customer-wise or ‘territory-wise’ based on your preference. The end result is that you are never lost! So whatever the mode of interaction with your customer, missed sales opportunities will become a thing of the past. It doesn’t just stop with that. Workspace gives you a single view of your customer journey, creating more opportunities for ‘up-selling and ‘cross-selling later.
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So, the key takeaways are:
- Keep your trials no more than 14 days to shorten your sales cycle.
- Contact prospects early to understand their needs and show how the product meets their requirements.
- Meet your customers only if the annual order value exceeds $5,000.
- Customize your activity-based email drip marketing or demos to be focused on benefits and not just features.
- Offer good value on annual plans.
- In all your interactions with the customer, never lose your ‘context’.
While these tips will give an idea of how to increase SaaS revenue and achieve your revenue targets, never forget that sales are all about relationship building. Ensure that every customer of yours is assigned a success manager who can handhold them till they derive all the benefits that your product offers.
Frequently Asked Questions
How do I increase my sales with SaaS?
SaaS tools can help you increase your sales in a number of ways. First, they can automate key sales processes, such as lead generation and follow-up. This can free up your time to focus on other activities, such as closing deals. Second, SaaS tools can provide you with valuable data that you can use to improve your sales strategy. For example, you can track which leads are most likely to convert and what times of day are most productive for making calls. Finally, SaaS tools can help you build and maintain relationships with your customers. For instance, you can use a CRM tool to keep track of customer interactions and send automated follow-up emails. By using SaaS tools effectively, you can boost your sales and grow your business.
What is a SaaS sales strategy?
A SaaS sales strategy is a plan for how a company will sell its software as a service. In order to be successful, a SaaS company must carefully consider its target market, pricing, and distribution channels. The sales strategy should also take into account the unique features of the software and the company’s competitive advantages. By taking the time to develop a comprehensive sales strategy, a SaaS company can increase its chances of success in the highly competitive software market.
Why is SaaS the future?
typically subscription-based, so businesses only pay for what they use. As a result, SaaS is a more cost-effective and flexible solution than traditional software.
But the benefits of SaaS don’t stop there. Because SaaS applications are delivered over the internet, they can be accessed from anywhere in the world. This gives businesses the ability to scale their operations quickly and efficiently. And because SaaS applications are updated automatically, businesses always have access to the latest features and security patches.
There’s no doubt that SaaS is the future of business software. The benefits of SaaS are simply too hard to ignore.
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