SaaS solutions can be used for many different things, like office productivity software, cloud security, and solutions for working together. These types of solutions are called horizontal SaaS. The horizontal model lets companies serve customers from many different industries.
On the other hand, vertical SaaS products are made for a small market. For instance, accounting software for law firms, which have their own ways of billing. The most common kinds of SaaS products are:
A SaaS sales person acts as a consultant, with the main goal of learning about the business goals of the client and coming up with custom solutions. Most of the time, B2B clients look for software to solve a business problem.
For example, a company that loses more customers than usual might look for a CRM solution that uses predictive modeling to figure out why customers are leaving. Or, a company that loses money because of unplanned downtime at its factories could look for maintenance management software.
The tech sales representative’s job is to find out what the client needs, offer the right value proposition, and help the client buy the software, get started with it, and start using it.
Due to the length and complexity of the SaaS sales cycle, it takes a lot of different professionals who specialize in different parts of the sales process to go from prospecting to closing. If the pressure to close sales and meet revenue goals seems overwhelming, remember that you are part of a sales team and are only responsible for a small part of the process, unless you are the sales manager or vice president of sales.
Software sales has a lot of room for growth. At each level, you can make a higher base salary and more commissions. Even though some senior-level jobs don’t offer commissions, the base pay is usually high enough to make up for this.
SDR is an entry-level job that involves outbound sales prospecting, which means coming up with leads, making sure they are good enough, and moving them through the sales pipeline. Most of their time is spent making cold calls, sending emails, and sending LinkedIn messages to customers to set up meetings with account executives and other sales closers to learn more about the company’s products and services. Some SDRs focus on inbound sales prospecting, which means they follow up with potential customers who have already shown interest by doing things like downloading a white paper or stopping by the company’s booth at a trade show.
For entry-level sales jobs, performance is based on two metrics: the number of qualified meetings and the amount of work done. Warner said, “Qualified meetings are meetings between account executives and prospects that result in a sale.” Activity means the number of outbound communications and SDR attempts with prospective clients in a certain amount of time, regardless of whether or not that activity leads to a meeting with the prospect.
International businesses might hire outside sales reps to build relationships in markets that haven’t been tapped yet. For example, a company in the US might hire someone in Singapore to build relationships in the Asia-Pacific region.
The job of an account executive is to find new customers and close deals with qualified leads. Most of the time, AEs follow up with sales-qualified leads generated by SDRs to move them along the sales pipeline. They speak up for the needs of the client and the ability of their company to meet those needs.
After a deal is done, the post-sales account manager takes over to help customers, make sure contracts are renewed, and try to sell more to existing customers. Account managers are not in charge of getting new customers like AEs are. But because they are close to the client, they have to tell engineers about bugs to make sure the client can use the product well.
Sales managers are usually in charge of sales teams in large businesses. Most of the time, they are also good salespeople. The VP is in charge of coming up with the sales strategy, but the sales manager is in charge of putting it into action, training and leading their team, keeping an eye on their performance, and reporting to the VP. Sales managers also look for new people to join the sales team, hire them, and train them.
The person in charge of sales for the whole company. The vice president of sales sets sales goals and a sales strategy that are in line with the organization’s goals for growth. They also work closely with marketing to make sure that marketing strategy matches sales strategy and sales strategy matches marketing strategy. In smaller businesses, the VP may also be in charge of hiring salespeople or running the sales team. At large companies, VPs oversee sales managers.
Because SaaS involves complicated technical processes, sales teams will sometimes bring an engineer to client meetings with them to answer technical questions.
Even compared to hardware sales, SaaS sales are very different. Salespeople need to know a lot about their products and be patient enough to guide clients through a longer sales cycle. Some tangible products, like houses and cars, sell themselves, but software is not tangible, so customers will need a way to interact digitally. Product marketing is the most important part of selling SaaS. Simply put, product marketing is the process of getting people to buy a product by putting it in the right place and telling them about it.
Product marketers will give sales teams materials like demos, user documentation, whitepapers, case studies, and more that help prospects understand what the solution is.
Here are some other ways that selling software is different from selling anything else.
SaaS changes very fast.
Updates to software happen much more quickly than to physical products. This is partly because of security—users need constant bug fixes and patches to protect themselves from new security holes—and partly because the industry is very competitive. Two or three times a year, SaaS companies usually put new code into production. Because of this, people who sell software have to keep learning about how new products work. They have to be ready to tell clients about new software updates and talk about what’s good about them.
The sales cycle for SaaS can take a long time.
Usually, the length of the sales cycle depends on the price. It takes longer to sell expensive items than cheaper ones, but software sales are an exception. The average length of the SaaS sales cycle is 84 days, but it can last for months or even years depending on the annual contract value and how ready the prospect is to buy. Matt Bertuzzi, a sales professional, says that it takes a little over a month to close a deal for a product with an annual contract value of less than $5,000, but it takes six months or more to close a deal for a product with an ACV of $100,000 or more. Large businesses usually have formal processes for buying things, which need approval from a lot of different people.
Software salespeople must have a lot of content, like white papers, case studies, testimonials, free trials, or demo videos, to keep the brand in the minds of leads during a long sales cycle. Sales and marketing work together closely to give the customer educational content, keep the relationship going with ongoing email campaigns, and give the user documentation that is needed.
The lengthened sales cycle is caused by a number of things, such as customers having a lot of options, competition from open-source software, and outsourcing IT operations.
The sales process is all about the customer.
Sales reps need to be ready to involve multiple decision-makers from the target company, including executive management, in the sales process. Salespeople use software that tracks leads to keep detailed notes about what clients say and figure out what content to share.
The most common way to pay for SaaS products is through a monthly or annual subscription. There are different pricing models based on the number of users or features that a buyer chooses.
Some SaaS companies charge a flat monthly or yearly fee that gives customers access to all of the product’s features. This kind of pricing is usually used for software that can’t be changed as much.
Use-based pricing, which is also called “pay-as-you-go” pricing, is based on how much you use the software. This pricing model is most often used by software companies like Amazon Web Services and Azure that deal with infrastructure and platforms. Customers are charged based on how many API calls they make or how many gigabytes of data they use.
Tiered pricing offers different levels of features, often starting with a freemium model and going all the way up to enterprise. The idea behind giving away a limited version of the product for free is that if a lot of people can try it out, many of them will decide to pay for it.
With this kind of pricing model, companies pay based on how many licenses they buy. The price of each license depends on how much access it gives. For example, a user license is usually cheaper than an administrator license. So, different types of users have different levels of access to software features.
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