You’ve got a great self-serve SaaS product. Leads are coming through your funnel, signing up for a trial, and upgrading without you having to lift a finger.
You’ve had a taste of success, and you’re wondering whether now is the right time to hire salespeople, ramp up growth even more, and make more sales through all of these inbound leads you are generating.
This is an extremely important decision in the life of a SaaS business. Hiring too soon could kill the momentum of your self-serve business.
But hire too late, and you’ll miss out on the potentially massive revenue growth that comes from going upmarket into the enterprise. If your competitors have a sales team to take advantage of these large leads, they will be the market leaders.
To make this decision, you must think systematically about your business, not just go with your gut. Consider using our revenue growth calculator to get a quantifiable analysis of your potential growth trajectories under different scenarios.
Here’s the thorough decision framework you need to determine whether now’s the right time for your company to build a sales team.
Did you know CRM influences revenue growth? Find out how in our article.
The Decision Framework for Hiring a Sales Team
You need to do just three things to see whether you need to transition from a self-serve to a sales-supported SaaS:
- Decide whether you have a high CLTV business that can support a sales team
- Segment your large trial accounts and see if they are converting
- Reach out and identify their friction and challenges.
All along the way, you’re looking for places where a sales team can add value to trial accounts by making the buying process much easier.
1. Is Your CLTV High Enough?
The first question you must ask yourself is whether your business's economics can support a sales team.
Take a look at your customer base. Are the vast majority of them individuals or prosumers? If so, your customer lifetime value (CLTV) will likely be too low to acquire customers efficiently through sales. That’s because each additional sale won’t be worth the sales rep’s time it took to close the deal.
Use this as a rule of thumb: if your customers have a lifetime value of less than $1,000, then a sales team is most likely not a good fit for your business. You’ll need a frictionless way to acquire customers at scale, not a high-touch sales process.
If your CLTV is too low right now, you’re left with two options:
- Go upmarket, build a self-serve premium version of your product at 2x–5x the price, and then revisit this question after you’ve gotten some customers or
- Focus 100 percent on scalable, frictionless customer acquisition.
If your CLTV is over $1,000, you may have a segment of high-value customers for whom a sales process makes sense.
2. Are Your Bigger Customers Struggling to Convert?
The next step is to examine your high CLTV customer base more closely. Suppose bigger trial accounts convert from trial to paid at a lower rate than smaller ones. That indicates that bigger customers are encountering difficulties with your self-serve process that a sales rep could help fix.
Start by segmenting your trial accounts by size—small, medium, and large—and then evaluate their conversion rates. Here's how.
Lead Score Your Inventory
When a trial account signs up, they give you information about themselves and their company. At a minimum, you have their email address—and you can use that alone to generate a lead score for your customer.
For example, a regular Gmail or Yahoo email address is likely just from an individual customer, but a company email means you potentially have enterprise interest.
Pull up the name of the person who signed up on LinkedIn to learn more about their role and the company they work for. Suppose you're automatically adding your trial account signups as leads to Close. In that case, you can also use our Clearbit integration to enrich your lead data with their LinkedIn data and other social profiles.
Funnel Segmentation
Add this simple question to your current onboarding funnel that'll separate the business accounts from the individual sign-ups: How big is your team?
This number feeds into your lead score to determine the trial account's segment. It would be best to consider asking for the customer's role, company information, size, budget, and more.
You can do this quantitatively or with a SaaS tool that helps you create lead scores—or you can go through your trial list and make rough, qualitative judgments on each account.
Enterprise self-selection
The final way to segment your customers is to get them to self-select.
Have your regular 2- or 3-priced tiers, then start a 4th tier with all the regular enterprise offerings—multiple accounts, enterprise single sign-on, awesome support—and write “Contact Us” instead of the price.
Large companies are used to buying a certain way and will actively look for this type of sales channel. If you don’t have it, your big customers will try a regular account, but they'll turn around and leave when they hit an issue that an account manager would easily solve.
When you add a “Contact Us” plan, you give large accounts with difficult buying requirements a way to contact you directly. You'll know you need a dedicated sales team if you have enough companies coming through this channel.
Finally, Look at Your Conversion Rates
You’ve segmented the large trial accounts from the rest. Now, take a look at their conversion rates from trial to paid.
If your large accounts are converting at the same rates as the rest of your accounts, then there’s not much that a sales team could do to raise those conversion rates.
However, if large accounts convert at a lower rate than small ones, you need to transition to sales support. Low conversion rates mean these accounts need more support to decide on buying since self-serve isn't working for them.
3. Is There Complexity in the Sales Process for Your Bigger Accounts?
The last step in deciding whether to build your sales team is for you, the founder of your company, to run an experiment. You need to call your large accounts and walk through the buying process with them.
This isn’t a sales call. You’re not in sales mode yet.
All you want to do right now is learn. Gain insights into your customers' buying processes, find friction, and identify challenges.
You need to determine whether a salesperson could make a difference in their lives and businesses. You need to identify any complexities in their buying process where human help could significantly increase conversions. These are your opportunities.
And you need to do that yourself, now, before you hire a single salesperson.
Find the Friction
When you get on these calls, you want to discover one thing: Are they the decision maker?
If you’re talking to these more extensive trials and they are the decision makers, they have a credit card in hand and the budgetary responsibility to make the call. A salesperson isn’t going to be much use in these scenarios.
But suppose you are talking to people who don’t have the decision-making authority to pull the trigger on your product today and have complex buying cycles. In that case, you have a great case for a dedicated salesperson who can make a substantial difference.
Buying cycles that have friction will include:
- customers evaluating not only your solution but also your competitors
- multi-stage buying processes
- multiple stakeholders involved in decision-making
If the potential customer is evaluating you alongside your competitors and comparing your offerings, getting a dedicated account manager or salesperson will put you at least on par, if not at a massive advantage.
You’ll be able to listen to and address their concerns rather than leaving your customers with no one to turn to for help and guidance. Salespeople will also help convert these leads into customers.
Identify Challenges to Buying
Additionally, there are business customers who have difficulty onboarding onto any new product due to significant business challenges that are nearly impossible to self-manage.
These might be specific to their business. Concerns about security, scalability, privacy, integration, and data management are likely to arise when dealing with enterprise-sized customers.
Even a great FAQ will not be able to answer these thorny issues. The customer will want to talk things through with you and your team on the phone.
Another sticking point might be the budget. In a self-serve scenario, with no negotiation opportunity, they might decide they can’t afford your product. But if a salesperson can get on the phone with these customers and negotiate, this can be a win for both sides.
Concerns like these, which are challenging to address, indicate that a salesperson could significantly improve the experience for that type of buyer during the trial.
If they have friction or challenges you can identify and resolve, then it’s time for a sales team!
Decide to Scale: Implementing a Sales Team for Sustained Growth
If you’ve gotten to a yes, it’s time to start building your sales team. Note that this isn’t a pass-fail test that will define your business forever. It would be best if you re-ran this experiment constantly.
As your business grows and your product changes, you might find that you have these enterprise clients hidden within your typical customers. By running through this decision framework, you drill down into your data and find the accounts that need sales support.
Want to learn more about selling SaaS products? Download our free book today, SaaS Sales for Startup Founders.
