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SaaS Sales 101: The Ultimate Guide to Selling Your Product

13 min read
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Have you ever heard of someone trying to sell a lifetime supply of ice cream in the Arctic? It sounds tough, right? If someone pulled it off, they’re probably from SaaS sales.

Are SaaS sales folks that awesome?

Absolutely, yes! They are great at convincing multiple decision-makers from a business that your product is the best solution to their problems.

If you want to become an ace at selling your B2B SaaS product, you’ve come to the right place!  

Here, we’ll cover everything from the basics of SaaS sales to advanced strategies for increasing your SaaS sales multifold.

Let’s dive in!

SaaS Sales: Table of Contents

What is SaaS Sales?

SaaS sales involve marketing and selling software services that customers can use online without installing locally.

Your SaaS solution may appeal to both solo users and organizations, depending on its intended use.

Usually, B2B SaaS sales are more profitable because you can charge your business customers more.

In SaaS sales, the process includes acquiring new clients, retaining existing ones, and reacquiring customers who have previously left. 

This comprehensive approach ensures the steady growth of your customer base while maximizing long-term revenue.

Next, we’ll see how SaaS sales differ from other types of sales in detail.

How Is SaaS Sales Different From Other Forms of Sales?

The success of SaaS sales depends on your customer-facing teams working together to build a holistic relationship with your customers.

This will help you satisfy your customers and get repeat business.

Another aspect that differentiates SaaS sales from others is the pricing.

B2B SaaS products are often priced flexibly.

This allows you to cater to different customer needs, but you should also thoroughly understand which model best fits each customer.

Overall, your entire B2B SaaS sales team should be well-versed in the product to move prospective customers quickly along the SaaS sales pipeline.

The next section covers the SaaS sales process and different models you can use to get customers.

The Basics of SaaS Sales

Now you know that SaaS sales is like juggling flaming swords: You have to keep your customers happy, informed, and coming back for more.

But don’t worry—we’ll help you master the balancing act!

Let’s break down the core process and the methodologies so that you can make your SaaS sales click.

The SaaS Sales Process

There are several key stages here, all focusing on converting a prospect into a repeat paying customer.

The first step is to create a lead generation pipeline.

You can use Inbound methods, such as SEO and content marketing, can be used to get leads organically.

Alternatively, you can also proactively contact potential leads through outbound sales emails and calls.

B2B SaaS Lead Generation Strategies That Work

Expert Insight: 8 out of 10 buyers prefer to be contacted by cold emails rather than cold calls.

Read More: Cold Email vs Cold Call: Which is More Effective in 2024?

Once you have a list of leads, you should start the qualification process to identify the ones who are the most relevant to your SaaS product.

After this, you move to the demonstration stage, where you show how your software can benefit them.

Later, you present them with a tailored proposal that includes pricing and terms. Now starts the negotiation and closing phase.

At this stage, you may have to renegotiate the pricing and terms a couple of times till you reach an agreement.

After the contract is signed, you can focus on providing them with onboarding support to make sure your product is successfully implemented.

However, the SaaS sales process continues even after the sale.

You have to continuously engage and follow up with your new customers to help them and keep them satisfied proactively.

Sometimes, customers will come across your product and know that it is the best fit for them. They will sign up, pay, and start using your product even before you make a move.

This is the ideal type of sale that every SaaS company strives for.

Even here, you have to reach out to them to show that you are ready to help them at a moment’s notice.

How Long is the SaaS Sales Cycle?

The time it takes you to close a sale depends on how your software impacts the business and its annual contract value (ACV).

If your product is going to be used by a specific team in your prospect’s organization and the ACV is less, you could close the deal faster.

Because you have to convince just the decision-maker from that particular team.

However, the process becomes more complex when the impact is on an organizational level or directly tied to revenue.

This is when more decision-makers, including C-suite executives, will get involved, and you will have to demonstrate how the SaaS solution aligns with the company’s broader objectives.

This often involves detailed presentations, pilot programs, and extensive negotiations. In this case, the sales cycle may last anywhere from 3 to 5 months.

What are the Different SaaS Sales Models?

Your SaaS sales model will decide how you approach the market, target your customers, and structure your overall strategy.

The right B2B SaaS business model will help you drive sales and grow your business efficiently.

Here are the 3 commonly used SaaS sales models:

The Self-Service Model

The self-service model is ideal if you have a low-cost product that is easy to use and requires minimal onboarding.

The user can quickly sign up and start using the product independently.

You can rely on organic B2B SaaS lead generation strategies for this model to justify your ROI.

Transactional Sale Model

The transactional SaaS sales model is more suited when your target is medium or small businesses.

For this model, you will need an outbound strategy, with dedicated sales professionals contacting and trying to convince decision-makers of your solution.

Enterprise Sale Model

Finally, there is the enterprise sales model. This model is better suited if you have a high-cost product and target enterprise-size clients.

To efficiently target and convert prospects, you’ll need a whole RevOps team consisting of product marketers, dedicated sales personnel, account owners, support staff, and engineers.

This is the most expensive model and one with the longest sales cycle, but it’s worth it because the contract deals will be higher.

SaaS Sales Metrics You Should Know

After you’ve completed the basics of the SaaS sales process and models, it’s time to examine the various SaaS sales metrics that can help you determine whether you’re making progress.

Here are some important metrics you should know and keep track of.

  1. Churn Rate
  2. Customer Acquisition Cost (CAC)
  3. Average Revenue Per User (ARPU)
  4. Monthly Recurring Revenue (MRR)
  5. Customer Lifetime Value (CLTV)
  6. Net Promoter Score (NPS)

1. Churn Rate

This is the rate at which your customers cancel their subscriptions within a set period. You can measure this by dividing the number of customers who have canceled the subscription for a set period by the number of customers at the start.

A reasonable churn rate for SaaS companies targeting smaller businesses is around 3 to 5%. For enterprise-level SaaS products, it should be below 1%.

2. Customer Acquisition Cost (CAC)

The total money you spend to acquire a new customer is the Customer Acquisition Cost (CAC).

This includes all the expenses related to marketing and sales efforts involved in attracting and converting a prospect into a paying customer.

A lower CAC says that you have a healthy and cost-effective acquisition process.

Make it a point to regularly measure and analyze your CAC, as it can help you make informed decisions on improving your overall profitability.

3. Average Revenue Per User (ARPU)

This is self-explanatory.

Still, let’s break it down: ARPU is the average revenue generated per subscriber over a specific period, typically a month.

With the help of ARPU, you can make informed decisions about pricing strategies, customer segmentation, and marketing efforts to maximize each user’s revenue.

4. Monthly Recurring Revenue (MRR)

This is quite plain and simple.

It is the predictable income you expect to earn every month from your SaaS subscriptions. You can easily calculate this by multiplying the number of active subscribers you have with ARPU.

For example, if you have 1,000 active subscribers and the monthly ARPU is $6.56, your MRR will be 1,000 X 6.56 = $6,560.

5. Customer Lifetime Value (CLTV)

CLTV is the amount of revenue you can expect from a particular customer over the entire time they use your product.

Although it sounds complex to calculate, it’s pretty straightforward.

You just have to multiply the average revenue per user (ARPU) by the average customer lifespan (how long they typically stay subscribed).

6. Net Promoter Score (NPS)

NPS is considered by many as the “Gold Standard” to measure loyalty and customer satisfaction.

It will tell you how likely your customers are to recommend your product to others.

To calculate this, you ask your customer on a scale of 0 to 10, “How likely are you to recommend this company/product to a friend or colleague?”

Users who rate 9 and 10 are called “Promoters”. They are your loyal customers who are likely to recommend your product through word of mouth.

Those who rate 7 and 8 are called “Passives”. They are loyal to an extent but are susceptible to competitor options and may leave as soon as they see a better fit.

The rest, who rate 0 to 6, are called “Detractors or Unhappy Customers.”

You should be wary of them, as there is a high chance they will damage your company’s reputation through negative word of mouth.

Next, we’ll see a few strategies that can help boost your SaaS sales figures!

SaaS Sales Strategies That Can Help 2X Your Revenue

Your SaaS sales strategy is your blueprint to boost the growth of your business for the long term.

Here’s a simple step-by-step process on how you can achieve your planned results:

  1. Define Your Ideal Customer Profile: A clear description of your ICP showing which type of organizations will benefit from using your product will help you target the right audience.
  2. Choose the Right SaaS Business Model: This will depend on your SaaS product. Based on it, you can adopt any one of the following models: self-service, transactional sales, or enterprise.
  3. Set Up Organic B2B SaaS Lead Generation: Use strategies like SEO, content marketing, etc., to generate awareness and convert that to customer interest.
  4. B2B Prospecting: You can also use business database tools like Saleshandy Lead Finder to find best-fit prospects who you can convert into leads.
  5. Reaching Out to Prospective Customers: Use sales outreach strategies to contact prospects with personalized messages to start conversations and slowly get them interested in your product. To help you, you can use tools like Saleshandy to send automated cold emails with tailored messages relevant to them.
  6. Closing The Deal: Once you have captured their interest, get them to book a meeting to discuss further and close the deal.

Key Takeaways

  • The Focus of SaaS Sales: You focus on building long-term relationships with customers by proactively engaging with them and providing prompt support and solutions to their problems.
  • Sales Models: There are 3 main SaaS business models (self-service, transactional, enterprise). You should choose to pick the best one based on your product and target market.
  • Sales Process: Create a lead generation pipeline, qualify leads, reach out to them, demonstrate your product, negotiate, close the deal, and keep them satisfied.
  • Sales Cycle: The time it takes to close a sale depends on various factors, such as your product’s complexity and the number of decision-makers involved.
  • Track Important Metrics: To measure your success, you must measure and analyze key SaaS metrics like churn rate, CAC, ARPU, etc.
  • Use Effective Strategies: Define your Ideal Customer Profiles (ICPs), and use both inbound and outbound lead generation, cold emailing, and cold calling to boost sales.
  • Maximize Your Efficiency With Automation Tools: Use tools like Saleshandy to automate and streamline your sales process, making your work more efficient.

FAQs

1. What are the best B2B SaaS sales strategies I can use to sell my newly launched product?

The best way to spread awareness about your newly launched SaaS product is to use social media sites like LinkedIn, Twitter, etc. You can also spread the word on online communities like Reddit and software discovery websites like Product Hunt.

2. What are the best outreach tools to get my sales team?

If you are into cold emailing, we highly recommend cold email automation tools like Saleshandy, Instantly, etc. For cold calling, you can check out Dialpad and CloudTalk.

3. What is the best prospecting tool to find my ideal prospects?

A prospecting tool with outreach capabilities would be ideal for startups and medium-sized businesses. Examples include Saleshandy Lead Finder, Lemlist, and Apollo.

Skyrocket your conversion rates with cold emailing

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