The vast array of technological advancements created up to the present day have made running a business much more effective and efficient. One of the top technological trends that has been making waves since the late 1990s is software as a service, better known as SaaS.
According to recent reports, the SaaS industry is expected to grow tremendously and is currently in the same stage as the smartphone market was way back in 2003 and the PC market in 1983. Numbers have revealed that 33% of companies prefer using Saas-based applications, and 38% of U.S. businesses have started adapting their workplaces to be SaaS-inclusive, which is a huge increase compared to 17% in 2016. Additionally, 80% of users are now shifting towards cloud-based applications including SaaS software, compared to 51% of users in 2016.
While the SaaS market is forecasted to grow to a whopping $76 billion by 2020, which opens a lot of opportunities for business owners, this also means that there’s more competition from - and between - SaaS companies. If you want to take the lead in selling SaaS software, check out these essential tips below to maximize your sales strategies.
Cash in, cash in now
Trials are often offered in order to lure potential clients. While offering a long-term trial might seem attractive, it actually hurts your business and does more harm than good. You don’t want customers to use free trials forever, and you don’t want them to duck out once they’ve had enough. The goal here is to get them hooked for the shortest time possible and get them to pay ASAP.
Trials should only be offered for 14-days at the most, as most customers won’t use the full duration of the product and instead duck out after three to five days. Likewise, offering long trial periods will only result in a delaying tactic that will lead prospective clients to procrastinate and eventually forget about your product. But if you offer shorter trials, people take will take the trial seriously, increasing your chances to sell your SaaS product more efficiently.
- Check your data to determine the average time of users ending trial periods.
- Shorter trials cut down your sales cycle, compelling customers to act fast.
- It also lowers customer acquisition costs which will reduce your operating expenses.
Get sufficient capital to get going
One of the many reasons why business owners love SaaS products is that their features are affordable and also predictable. Skyrocketing sales will definitely bring consistent income to your business, but be wary that the cashflow will start off sluggish. Especially if you are a SaaS startup company, you’ll need a considerable amount of revenue to kick off your business. With a good amount of cash on hand, you can use this to fuel the important things that matter to your trade.
Another thing you need to note when selling SaaS software is that discounts will never bring long-term benefit. While it’s advantageous to your sales team since it makes selling easier, discounts hurt your branding as a company. Price is a good indicator of quality, and customers don’t want to settle on cheap products only to find that they will not benefit from them in the long run.
- Consider offering annual plans and different packages at special rates.
- Spend your capital wisely and use it to hire salespeople or to improve your products and services.
- Offering different prices makes it hard to predict estimated revenue.
Closing a deal successfully during the first contact is indeed a once in a blue moon experience. Especially in enterprise sales, it’s rare to pull off a contract during the initial discussion. Your success in making SaaS sales greatly depends on your patience and ability to carry out follow-ups on a regular basis. You should never take maybe as an answer, instead, you need clear answers from prospective clients – yes or no.
Right after getting your target customers signed up for trials, make a call right away while the product is still fresh in their minds. Communicate with them constantly. A voice call will do, but if time restricts you from carrying out personal interactions, use the powers of email. Send as many emails as you can and don’t be afraid to be reported as spam. Other sales and marketing techniques include but are not limited to:
- Using a valued email address, instead of email@example.com consider firstname.lastname@example.org
- Reaching out to clients at different times of the day and reiterate your call to action.
- Sending out breakup emails to non-responsive clients, to elicit a sense of urgency.
Never close a bad deal
The next tip for selling SaaS software can be controversial for some but strategic for many. Never close a deal with unqualified customers. It’s hard to let go of assured income, but the responsibilities that come along with these customers outweighs the revenue. Unqualified customers often make complaints and constantly seek support. The time, effort, and money you’ve invested in explaining and answering all their questions and objections can be invested more efficiently somewhere else.
Likewise, unqualified clients have a tendency to badmouth your team with negative and biased feedback. One single negative review online could hurt the reputation of your company big time. Unfit clients habitually blame the products they use rather than their own failure, and you don’t want these negative reviews to happen to your business. To prevent this from happening:
- Create an ideal customer profile, make it as close and as real as possible.
- Identify the needs and wants of your prospects and share these with your sales teams.
- As much as you can, try to figure out the decision-making process of your client.
Get cyber liability insurance
Since cloud-based SaaS offerings are getting popular right now, it’s just a matter of time until hackers target your business. Hackers do everything they can to attack companies, and as a provider, you need to make sure that everything is well protected in case this happens. Especially if you are dealing with confidential files, the cost of exposing this data can literally drain your finances.
In addition to taking action to prevent cyber attacks, you need to protect yourself, your employees, and the company from unwanted risks and make sure to obtain cyber liability insurance and have the necessary coverage to uphold the interests of your business. Cyber liability safeguards your company from security-related claims including network failures, data breaches, and media or content liabilities.
- It is important for businesses that gather personal information for online use.
- You’ll need this insurance if you keep and maintain a database of clients.
- SaaS relies heavily on technology, making cyber liability insurance a must for your business.
In addition to cyber insurance, if your company has venture-backing you should also consider a management liability package. This policy will cover losses related to errors made by your directors and officers.