If you’re working by yourself as the founder of your SaaS company, sales is actually pretty easy.
You know the software better than anyone, you know the benefit of using it versus your competitors’ software, and you know the problems your customers need solved.
Once you begin to scale up and hire a sales team, sales is no longer that easy. It actually gets pretty difficult if you don’t know what you’re doing. Many SaaS companies have struggled with that initial transition into scaling their business. Making mistakes at this crucial point can cost your company a lot of money. From concepts like hiring the right people for your sales team to training them properly, there are countless things that can go wrong along the way.
You’re in luck. This is the ultimate guide to sales for your SaaS company.
If you understand this guide thoroughly, you will have a better chance of avoiding all the common mistakes when scaling your SaaS sales.
What is SaaS?
For most of your reading this, you probably already know that SaaS stands for Software as a Service. It’s important to understand exactly what that means before you focus on sales. Without understanding SaaS and it’s placed within the tech industry, you risk taking the wrong approach when positioning the product you’re selling.
In it’s simplest definition, Software as a Service is when you have a software product that is hosted in the cloud. This requires your customers to have a constant internet connection in order to use your software and an account with access.
Users don’t need to download the software, buy a physical CD, or install anything.
The SaaS is usually based on a recurring revenue model or what’s commonly called a subscription model. This means when they first sign up to your use your software, they are agreeing to pay a set payment at regular intervals, usually monthly. However many companies find additional success offering discounts to customers when they pay for months or even a year in advance.
Because of this recurring revenue business model, it’s incredibly important that a SaaS focuses on the “service” part of the business. Customers will expect regular bug fixes, patches, updates with additional features, and timely support.
There are plenty of other features that can be used to describe SaaS companies, however, they vary from company to company. The commonalities listed above should suffice for the purposes of this guide. Keep in mind that any unique user access or payment models that differ from the above, may require slight modification in how you sell your SaaS, but most SaaS will fit the description listed.
Selling your SaaS
Before we jump into hiring your sales team and scaling your SaaS business, let’s cover exactly how to sell your SaaS. The truth is, your SaaS isn’t going to sell itself, no matter how great your product is.
First, and most important, is simply having a great product. The truth is, you can have the most amazing marketing in the world, but if your product is terrible, the only thing that the marketing accomplishes is helping your SaaS fail at a quicker rate.
If you really focus on having a great product that truly helps your customers, everything is much easier. When you have a great product, not only is it easier to actually show your prospects the benefits, but you do wonders for your customer retention. And when you are selling SaaS on a subscription model, customer retention is absolutely vital to your company’s success.
One mistake many people make when selling anything is they tell people about the features. No customer truly ever cares about features being listed. They care about the benefits your product will have for them, and what value those benefits bring. Somebody doesn’t buy a high-priced, luxury car simply because of some impressive numbers when the engine is described. A person buys that car because of the feeling of status it gives them. Knowing the primary benefits your SaaS will provide your customers is crucial when selling. The rule here is to show, not tell. Listing features is telling. Explaining benefits is showing.
It’s important that your target customers trust you.
Building trust is the difference between success and failure in sales. Most people primarily buy products and services from brands that they trust. This is especially true for SaaS companies. There are always new companies popping up within the same space, fighting for a piece of the pie. If you develop strategies to ensure your prospects trust you before you ask for the sale, your sales conversion rate will be much higher. The first and easiest way to do this is to simply protect your online reputation. Handle any negative reviews with the utmost professionalism. Be an authority in your field without speaking negatively to those less knowledgeable. Position yourself as an expert. If your customers already see you as an authoritative expert on whatever your industry is, then they will certainly be more interested in your SaaS.
Another key to effective SaaS sales is having a deep understanding of your audience.
It can be really hard to sell the benefits of your SaaS if you don’t understand the pain points of your customer. You need to identify exactly who your ideal customer is and then build a customer persona from that. The customer persona that you develop is the person you are always selling to. The problems they have are the problems you are solving. The pain their problem causes, is the pain you will be eliminating. This customer persona can easily be researched by monitoring all the social media channels and online groups that are relevant to your industry. Here you will be able to find out the commonalities between all of your potential customers, and use that to design the customer persona.
There are several effective strategies to attract new prospective clients and generate leads. It’s important to know the difference between them and test which fit your SaaS model and are most optimal for you. You need strong lead generation if you’re going to scale. Without plenty of leads coming in, your sales team will struggle to hit their targets. Here are a few lead generation strategies.
Content marketing is an incredibly strong form of lead generation. Whether your prospective customer found your content organically or it was linked by an advertisement, the content allows you to prime the prospect for a sale, or just as importantly, disqualify people who aren’t right for your SaaS. Having the wrong prospects who have no need for your SaaS talking to your sales team is wasting time where the team can be talking to your ideal customers instead. The content should build trust, demonstrate authority, pique the prospects curiosity, and push them to take the next step in the sales process. You are not directly selling them yet, just warming them up before the sell. Just like a man that needs to date a women before he can ask her to marry him, a SaaS company needs to warm a prospect up before asking for a monthly or yearly commitment.
Referral marketing is an excellent source of lead generation. Having an existing, happy customer refer somebody else that they know is some of the absolute best social proof you can hope for. Often, these referred prospects have already heard great things about your SaaS and have a strong interest, making the sales team’s job that much easier. A great idea to increase the number of referred prospect is to offer a benefit or reward to an existing customer who refers a friend that then becomes a customer. This can be a free month of service, a free upgrade to their account, or many other possibilities.
Regardless of how these leads are generated, email marketing is an essential strategy to include.
Early on in the lead generation process, you should be having your prospects opt-in to your email list. Using an email autoresponder, you can then build more trust, demonstrate more authority, and truly show the benefits of your SaaS. The simple idea of your prospects continually seeing your emails will help keep your SaaS in your mind similarly to repeated advertising, without the additional cost. It is often said that the average customer needs to see marketing material or interact with your company in some way at least seven times before they are ready to buy. This email marketing is one of the best ways to accomplish this and register your SaaS company in their awareness.
Now that we have covered strategies for both lead generation and direct sales, let’s jump into exactly how to build a sales team.
Building A Sales Team
Building a high-performance sales team often comes down to simply finding the right people. There are a lot of natural sales people who thrive on smashing through their sales goals. It’s much harder to train somebody that isn’t a natural salesperson, and even when you can train them effectively, they will still struggle to compete with the high-performing naturals.
Finding the high-performing naturals can be very difficult. They are highly sought after by companies and corporate headhunters in all industries. The problem is that many of these companies can offer higher commissions and better benefits than your SaaS startup.
So what is a good alternative?
If you are recruiting your sales team from within your existing company, make sure to focus on the cold hard data. Some people might be charismatic and great at talking with customers, but, the actual numbers of their customer retention, account upgrades, or other sales-based metrics are all that matters. The numbers don’t lie and it’s very important to be cold and calculating with the data when building a great sales team.
If you are recruiting salespeople from outside of your company, one important quality that is often overlooked is if the person you are potentially hiring has a strong locus of control. Locus of control basically means how much a person believes they have control of the events and circumstances in their life versus how much they believe it is based on external factors. People who believe they have a high level of control over the events in their life, always perform better at sales. They are the ones that take responsibility when their sales numbers are low and figure out how to perform better based on the data they are provided. They usually have a strong sense that despite the difficulty, anything is achievable through their own hard work. Conversely, people who have a low locus of control and believe events and circumstances are based on external factors, perform much worse in sales. These are the people who tend to blame their sales performance on bad leads, the customer’s attitude, or countless other excuses. Of course, when you are interviewing, you can’t simply ask if they believe they have a locus of control or not. Most people would simply answer yes, knowing it’s the correct answer to get the job. However, you can ask tangentially-related questions such as probing into their experiences in past jobs, especially sales experience. Ask them about a time they didn’t perform well at a job and what the cause of that was. If they are blaming external factors, then it’s unlikely they will be a good fit for your sales team. If they take responsibility for their low performance and are able to articulate their desire to learn and grow from their previous performance, they will likely be an excellent addition to your team.
Another key indicator of a great salesperson is being a self-starter.
Salespeople, regardless if they are working with a sales team, need to be able to perform independently without being micromanaged. These are the kind of people that see problems and immediately work towards a solution without being told to. They usually take great pride in this work ethic, and it usually shows in both their demeanor and past performance. When speaking with a potential new sales team employee, pay attention to how much research they did before their interview. Did they research your company? Did they already begin studying your product so they can understand what it is they will be selling? Anyone who does this kind of research beforehand will likely bring it up during an interview in some way, so probing isn’t usually necessary. It’s just important to keep your eye out for that kind of self-starting behavior.
The last indicator of a high-performing salesperson that we will touch on is what kind of questions are they asking. Of course, you can’t blame a potential employee for asking about compensation, commission structure, or company benefits. However, if that’s all they are asking about, it may be a good indicator that they are not primarily focused on being one of the best salespeople there. All great salespeople have a strong desire to grow and improve so they can always perform at their optimal level. These are the kind of people that will ask about additional training, what the day-to-day process is like, or anything else that shows they genuinely care about their own improvement within your company.
Now that we have covered ways to find salespeople and how to single out who the better performers are, let’s cover how to scale your sales team so your SaaS can really take off.
Scaling a SaaS Sales Team
Scaling a sales team can be equally exciting as it is daunting. That’s why, up to this point, it’s important to do everything right and be prepared. If you haven’t built a good starting sales team, then any performance issues you have will be dramatically increased as you begin to scale. That’s why the initial foundation is so vital.
Before scaling, it’s very important to take a detailed assessment of your current sales team. This is another time to simply go to the cold, hard data. Both the best performers and the worst performers will generally stand out in the numbers. The highest performers should be kept happy, and the lowest performers should be let go. Unfortunately, sales is a high-turnover position, so terminating employment and recruiting replacements will be frequent. This is a good thing. As you let go of low performers, you will become better at noticing commonalities between them similar to the ones listed in the previous section. This data will be useful as your screen future applicants, and you will be able to build a stronger team filled with primarily high-performing individuals.
However, what do you do about the middle performers? They need to be polarized, and pushed one way or another. Some of them may have it in them to be great salespeople, and it’s important for you to identify which those are. Do they have some of the qualities that we have listed above, but need some work on the others? Identify their weakness and help them. Regular evaluations and strategy sessions with your salespeople are great for this. You can also partner your middle performers up with your lead performers. This should help them see what the high performers are doing differently and they should adapt accordingly. If the can’t adapt, consider letting them go too.
One of the best ways to ensure you have a great sales team is to have thorough training. It’s important that everyone is on the same page, regardless if they have plenty of past sales experience. All salespeople should go through a training process, followed by a shadowing period where they are partnering with the top earners. The training process should cover all of the essentials. These essentials include extensive product knowledge, in-depth customer knowledge, and knowledge about competing SaaS companies. This should include both pros and cons about the competition versus your company. Without all of these essentials, your salespeople don’t have the proper tools to do their job and will have trouble properly convincing your potential customers to buy. After the basics are completed, then they should go through extensive training of sales techniques, especially those that help sell your specific product. More than half of this training process should include role-playing practice. Lastly, during the shadowing process, the trainees should sometimes conduct the sales interaction and be evaluated by the salesperson they are shadowing.
Once you have a great foundation to your hiring practices and training, you can begin scaling your sales team to hit your target. Scale slowly so you can make corrections to any problems along the way.