SaaS is a multi-billion-dollar industry. And it’s only getting bigger.
According to Grand View Research, the software as a service (SaaS) market is estimated to grow at a compounded annual growth rate of 11 percent from 2022 to 2028—resulting in an estimated total market size of $344.3 billion by 2028.
Now is the time to be in SaaS. But more opportunities mean more competition. If you want to lead the pack, you need to learn how to sell SaaS.
So, we're sharing our best strategies for nailing sales in the SaaS industry.
What is SaaS?
Software as a Service (SaaS) is a cloud-based software delivery model where users access applications via the Internet. SaaS applications enable users to use software online without the need to buy hardware or install any programs.
Common examples of SaaS apps include online office tools (such as Microsoft Office and Google Suite) and online calendar and scheduling tools.
One of the main benefits of web-based software is that users don’t need to maintain product updates for performance and security—the SaaS provider handles that on their own servers.
How is SaaS Sales Different from Other Industries?
Selling SaaS comes with its own unique set of challenges. You can’t directly compare it with industries like eCommerce or one-time software sales—those are more transactional (one-time purchases and short sales cycles). SaaS sales strategy requires a solution-selling approach that focuses on building a clear understanding of customer pain points, and resolving them in the long term.
Here are a few key differences that set SaaS sales apart from other industries.
Monthly Recurring Revenue Model
SaaS businesses operate on a subscription-based pricing model, which typically generates monthly recurring revenue (MRR). This revenue model provides a more predictable cash flow and allows for better sales forecasting. However, it also requires continuous effort to retain customers and improve the product.
Tracking Churn Rate
Minimizing churn rate is the name of the game for SaaS companies. At a high level, customer churn is the rate at which customers cancel their subscriptions. It can significantly impact MRR and quickly collapse a SaaS startup, if left unchecked. Therefore, sales teams and account executives must not only focus on acquiring new customers—but also on retaining and upselling existing customers.
Importance of Onboarding
In the SaaS industry, a smooth new customer onboarding experience is critical. It directly affects customer satisfaction, product adoption, and, yes—churn. A good onboarding process means providing clear instructions, comprehensive training, and building on the customer’s existing foundation. All of this is key to a stellar overall customer experience.
Longer Sales Cycle
SaaS products often have longer sales cycles as they involve complex integrations and are charged at a higher price point, especially in enterprise sales. As a result, SaaS sales reps must engage with multiple stakeholders and address various objections before closing a deal.
Customer Lifetime Value (CLV)
Customer lifetime value (CLV) is an important sales KPI to track in any industry—and especially so in SaaS sales. CLV represents the total revenue a customer generates over the course of their relationship with the company. Given the longer sales cycle and greater investment required to convert a customer, it’s important to optimize CLV in SaaS sales.
Integration Knowledge
It’s one thing to know your own SaaS product inside and out—but customers typically require new software to integrate with their existing tech ecosystem. So, sales teams must have some level of working knowledge about their integration partners to be able to address technical concerns or compatibility issues for potential customers.
The SaaS Sales Process
The SaaS sales process is a series of steps sales teams follow to identify, engage, and convert potential customers into paying users. Picture a sales funnel: At the top is lead generation, at the bottom are closed deals.
Let’s dive a little deeper into what each step of the SaaS sales process involves.
Step 1: Lead Generation
The goal of lead generation is to attract potential customers or "leads" interested in your software product. There are many ways to generate inbound leads, including content marketing, social media marketing, pay-per-click (PPC) advertising, webinars, referral programs, trade shows, and more.
Effective lead generation involves sharing valuable content that educates and attracts your target audience. By offering value upfront, you build trust and credibility, which encourages potential customers to provide their contact information—thus, becoming leads.
Uncover AI's role in achieving 10X content marketing results – details within.
Step 2: Outbound Prospecting
More often than not, sales teams are dealing with a lead shortage as opposed to a surplus. During these times, salespeople should be engaging potential customers through outbound prospecting instead of waiting for leads to fall into their lap.
Outbound prospecting involves actively reaching out to potential customers that fit your ideal customer profile. This typically includes methods such as cold calling or leveraging cold email templates to initiate contact. (If you are not sure how to write cold emails, try our AI-powered cold email generator tool for effortlessly creating effective email templates).
In this stage, it's essential to conduct research on your prospects and tailor your messaging to their unique needs and pain points.
Step 3: Sales Qualification
Sales qualification helps you determine whether a prospect is a good fit for your SaaS product. To do this, you can assess their budget, authority, needs, and timing—often referred to as BANT criteria.
Sales professionals need to ask smart qualifying questions and thoroughly understand the prospect’s needs. The goal of this step is to filter out prospects who are unlikely to convert, allowing the sales team to focus their efforts on higher-potential opportunities.
Step 4: Sales Demos
So, you’ve done the groundwork and qualified a promising prospect. Now it’s time to show them the magic and schedule a demo.
Sales demos allow you to showcase your product’s unique features while demonstrating how it can resolve the paint points discovered during the qualifying stage.
A good sales demo is personalized, provides context, and leaves ample space for questions. As a sales representative, you need to put yourself in your prospect’s shoes and ask, “Would I enjoy listening to this demo?” Be honest. And if the answer is no—it’s back to the drawing board.
Step 5: Closing the Deal
Closing is the final stage of the SaaS sales cycle, where the sales team works to secure a commitment from the prospect. This can involve negotiating contract terms, addressing any last-minute objections or concerns, and preparing the necessary paperwork.
Let’s say you’re working in the B2B SaaS industry and want to close a sale quickly. You could employ techniques such as:
- Creating a sense of urgency
- Offering incentives
- Pitching the solution (not just the product)
- Asking for the sale and nailing your closing questions
10 Strategies to Build a Sustainable SaaS Sales Process
Whether you’re involved in a startup or an established organization, building a sales process that’s both sustainable and scalable is all part of being in the SaaS industry. These 10 strategies provide a framework to help you optimize your sales efforts and create a foundation for long-term success.
1. Decide on a Sales Model: Self-serve or High Touch?
Choosing the right sales model for your SaaS business depends on your product, target market, and available resources. The two primary SaaS sales models are self-serve and high-touch.
Self-Serve Model
Ideal for low-cost, easy-to-understand products targeting small businesses or individual users, the self-serve model allows customers to complete their purchase independently. The self-serve, or self-service model, offers lower overhead costs, scalability, and a faster sales cycle.
Consider a self-serve model if:
- Your product is low-cost and simple
- Your target market consists of small businesses or individual users
- Your product doesn’t need to be integrated with other tools
High-touch Model
Suited for high-priced, complex products targeting mid-sized to enterprise-level customers, the high-touch model involves dedicated sales and customer success teams that actively engage with prospects and guide them through the sales process. This model provides a personalized experience, better handling of complex sales, and higher deal values.
Consider a high-touch model if:
- Your product is high-priced
- Your target market consists of mid-sized to enterprise-level customers
- Your product requires a steep learning curve
2. Choose the Right Sales Methodology
A sales methodology is a structured approach that guides the sales process. It provides sales professionals with a standardized way of engaging with prospects and customers.
Here are five popular sales methodologies for SaaS:
- Customer-centric selling: Focuses on understanding the customer's needs, creating a personalized experience, and positioning your product as a solution to their challenges.
- Challenger sales: Encourages sales reps to act as advisors, guiding prospects to challenge preconceptions and explore innovative solutions for their unique needs.
- Consultative selling: Emphasizes the sales rep's role as a trusted advisor, helping prospects identify their needs, explore solutions, and make informed decisions.
- Value selling: Aims to communicate the tangible benefits and return on investment (ROI) of your product, differentiating it from competitors.
- Target account selling (TAS): Involves identifying and prioritizing high-potential target accounts, focusing sales efforts on key accounts, and establishing relationships with decision-makers.
While there’s no one sales methodology that’s perfect for your business, there’s definitely the best option. Find it, customize it, and build a strategy that’s tailored to your product.
3. Define Your Ideal Customer
An ideal customer profile (ICP) is a description of an organization (company, government agency, non-profit organization, etc.) that gets significant value from using your product/service and also provides significant revenue to your company.
Defining your ideal customer will streamline your sales efforts and increase the likelihood of attracting qualified leads.
Let’s walk through the four steps required to create an ICP:
Step 1: Make a List of Your Best Customers
Start by identifying your top 10 customers and determine how much they are paying you, as well as how much value they are getting from your solution. These customers will serve as the basis for creating your ideal customer profile.
Step 2: Find Common Attributes
Once you have your list of best customers, the next step is to identify the common attributes they share. Look at their location, company size, target customer, and any other relevant factors. Take note of these commonalities.
Step 3: Prioritize Attributes of Your Ideal Customers
With the common attributes identified, it's time to prioritize them based on importance. Some attributes will be more critical than others, so aim to prioritize between five to ten.
For example, let's say your business provides specialized software solutions for the healthcare industry. In this case, the industry attribute (healthcare) may be more important than the company size.
Step 4: Fill Out the ICP Template
Use our simple template to help guide you and your team through this process.
4. Get Lead Generation Right
Effective B2B lead generation helps provide a steady stream of prospects to fuel your sales pipeline. There’s no “one size fits all” method to lead generation, but striking a comfortable balance between lead quantity and quality is the ultimate goal.
Here’s a breakdown of four ways your sales development team can identify decision-makers and source leads.
Highest Quantity/Lowest Quality: Buying Lists
Purchasing lists of potential leads from third-party providers gives you quick access to a large number of contacts. However, these leads are often low quality as they’re likely not targeted, up-to-date, or relevant to your offering.
High Quantity/Low Quality: Web Scraping
Web scraping involves using automated tools as well as proxy servers to extract contact information from websites. This approach can generate a high quantity of leads, although it lives in a gray area, as not all websites allow it.
Low Quantity/High Quality: Outsourced Lead Gen Team
Hiring an outsourced lead generation team can help you acquire high-quality leads tailored to your ideal customer profile. These teams specialize in researching and identifying relevant prospects and can provide targeted, up-to-date leads.
Lowest Quantity/Highest Quality: Create Customer Profiles
As discussed in step three, creating a detailed customer profile allows you to hone in on the DNA of your most successful customers. By understanding your ideal customer's size, pain points, software stack, etc., you can target your sales efforts more effectively.
5. Make Sure Sales Is Reaching Decision Makers
You can make cold calls and send emails all day, but if you’re not reaching decision-makers, your pitch will likely fall on deaf ears. That’s why it’s important to create an accurate customer profile so that sales teams can identify who the decision-maker actually is.
To find the right contact, begin by researching an organization using tools like LinkedIn, company websites, and even industry publications.
Alternatively, let’s say you aren’t sure who the decision-maker is, but you’ve established a point of contact within the company who is a fan of your product. Well, you’ve just landed yourself an internal champion who can help you work on the deal from the inside.
Internal champions can help you get your foot in the door, advocate for you, and lead you to the decision-makers. Of course, if you can connect with decision-makers off the bat, you’re in good shape. But if not, cultivating relationships with internal champions can be a powerful way to increase your chances of success.
6. Make Sure Your Product Demos Actually Move the Sale Forward
Most product demos are a snoozefest. Salespeople oversell features, don’t ask for the close—and then wonder why prospects don’t buy. Here are a few tips for creating impactful product demos that engage prospects and advance the sales process:
- Personalize your demo: Show how your product addresses the prospect's specific pain points and challenges. Personalize the demo by tailoring it to their needs and industry, using relevant examples.
- Start with the best first: When presenting your SaaS solution to a prospect, it's important to make a strong first impression. Start off by addressing their most pressing concerns. This way, you immediately capture their attention and set the stage for a successful demo.
- Incorporate discovery questions: Discovery questions allow you to better understand your prospect's needs, challenges, and goals. Weaving them in during a demo not only helps to provide you with valuable information, but also gives a chance for your prospect to open up.
- Encourage interactivity: Foster a collaborative atmosphere where your prospect feels comfortable discussing their challenges. Keep the demo concise and structured, and leave lots of room for the prospect to ask questions.
7. Keep Your Trials Short
Your free trials should be short. Shorter than what they probably are right now. Keeping trial periods short can be beneficial for several reasons.
First off, it’s unlikely your prospects are actually testing your product for the full trial length. If they stop using it after day 5, what’s the point of offering a 30-day trial?
Shorter trials also create a sense of urgency that encourages prospects to engage with your product more actively and make quicker purchasing decisions (reducing CAC).
Furthermore, shorter trials reduce the window for competitors to approach your prospects with alternative solutions.
8. Track the Right Metrics
There seems to be an infinite number of metrics out there that could be tracked. And that’s exactly why it’s important to know which ones to focus on so you don’t just start tracking metrics for the sake of tracking metrics.
Things like:
- Lifetime value (CLV)
- Kundenakquisitionskosten (CAC)
- Churn rate
- Monthly recurring revenue (MRR)
- Revenue per customer
These are all vital metrics to have if you want to scale quickly and effectively.
But what about every day inside sales metrics? Those are important too. Keeping track of the number of phone calls/emails/connections made, number of meetings and demos scheduled, number of quotes delivered, and number of deals closed are all essential for understanding the performance of your sales team.
9. Reduce Churn
Churn is the rate at which customers cancel or choose not to renew their subscriptions to your SaaS product. It's a critical metric in the SaaS industry, as high churn can significantly impact revenue, profitability, and long-term growth.
There are many reasons for SaaS churn and figuring out the cause can take some digging. One way to get some clarity is to send a survey and ask for more details once a customer cancels. You can also bring it up during offboarding calls or exit interviews.
That being said, if you’re experiencing a higher churn rate than normal, consider improving your customer onboarding experience, enhancing your offering, or maybe even finding a better product/market fit.
10. Use the Right SaaS Software to Streamline Your Sales Process
Using the right software tools allows sales teams to connect with more prospects, improve existing customer relationships, and track important metrics. Consider implementing the following tools to help streamline your sales process.
Customer Relationship Management (CRM) Software
Customer Relationship Management (CRM) software, like Close, is essential for managing customer data, reaching out to leads, and monitoring sales activity. It keeps your team organized, efficient, and ensures that all relevant information is easily accessible.
Check out our article on the best B2B CRM solutions currently available.
Email and Automation Software
Email and automation tools like ActiveCampaign (which integrates with Close) enable you to personalize your outreach campaigns, track engagement, and automate routine tasks.
Other tools like Quickmail (which also integrates with Close) help you avoid the dreaded spam folder by automatically improving your sender reputation.
Ready to try something new? Explore these 9 ActiveCampaign alternatives.
Lead Generation and Prospecting Software
Lead generation tools like LinkedIn Sales Navigator, LeadFuze, and Leadinfo, can help you identify and connect with high-quality leads.
Psst... Want to become a lead magnet? Try LinkedIn for lead generation.
Video Conferencing and Communication Tools
In today's digital age, video conferencing and communication tools, such as Zoom and Microsoft Teams, are indispensable for sales teams. They facilitate virtual meetings, product demos, and better customer support to help maintain stronger relationships.
Proposal and Contract Management Software
Contract management platforms like PandaDoc and Proposify streamline the proposal creation and approval process, making it easier for your sales team to close deals. These tools help you create professional, engaging proposals, automate follow-ups, and manage contracts more efficiently.
The Truth about SaaS Sales
It’s hard. You can’t sell a customer once and go on to the next deal. You have to keep selling your customers on the value of your product, month after month, year after year.
Some of them will churn. Others will have to be fired. That’s why success starts with picking the right customer, providing them with value, and understanding your metrics like the back of your hand.
However, if you get it right, there’s no better feeling. People will turn to your product to achieve their business goals, increase revenue, save time, or meet other critical needs. Focus on making your customers successful, and success will follow.
