Opportunity exists for SaaS companies to gain their market share. However, the issue lies in how businesses will compete with one another, persuade prospects, and motivate their sales teams.
To overcome these obstacles, companies must approach sales differently by expanding their customer reach and being an ongoing solution for their customers.
Challenges Facing SaaS Sales
Distribution is the major challenge for SaaS companies. While most revenue is generated from direct sales, several sales teams consist of only 1 or 2 people. That’s a heavy burden on sales reps who earn new clients one by one in a crowded SMB marketplace.
To gain more revenue, these small SaaS businesses will need to penetrate the enterprise market, comprised of major competitors like Microsoft, Adobe, and Google.
Success will depend on how efficiently these startups can satisfy the needs of enterprises. From security to training, a long-term strategy must exist to cater to this customer base. If not, these small players will have no chance at making a lasting impression.
Offering recurring value is how SaaS companies can tackle the concerns of enterprises. It’s about anticipating the customer’s next benefit, not reacting to mistakes.
“This is beyond fighting churn. It’s beyond calling you and saying, ‘Hey, we noticed that something bad is going on. How can I help?’ Instead it’s saying, ‘We’ve noticed that good things are happening. Maybe there’s more that you want to explore,’” says Guy Nirpaz, CEO of Totango.
Sales teams also should focus on cross-selling and post-sale onboarding. Broader product suites and more customer touchpoints lead to lower churn rates.
Image Source: Cross Selling Keeps Customers by McKinsey & Company Gainsight
It all comes back to being customer-centric. By targeting your customer’s needs, your team can offer better service and move your sales benchmarks in the right direction.
The Sales Model Evolution
Times have changed. The old sales model focused on presenting information and closing the deal as quickly as possible.
Now, sales teams have to build rapport with their clients. To sell effectively, your team must understand why the prospect should buy.
When consumers have problems, buying isn’t always their first choice. Executives may think that they can solve the issues themselves.
To help a potential customer, it’s important to identify their business objectives. This will give you a clearer picture on how their current problem affects their goals.
Image Source: Develop Value Framework by Mark Cranney Andreessen Horowitz
For example, a business that sends emails to 10,000 customers individually may recognize that valuable time is being wasted on such a task. Instead of purchasing marketing automation software, managers may solve the problem by not sending emails.
It’s up to your sales team to connect the dots for the client. To learn more about a prospect, start researching to ensure that your product can offer the best solution.
Accurate and up-to-date information, like revenue, funding, and social activity, will uncover insights on how to approach the prospect.
With this knowledge, your team transforms unknown specific opportunities into a known set of facts. You become a partner in their business, rather than a vendor.
Examples to Follow
Not sure what this looks like? Here are a couple of examples to help you.
1. Cross-Selling During Customer Interactions
Before discontinuing their Live Chat app, Groove, a help desk software provider, offered the app to help their customers curb email messages. This cross-sell solved a problem and added more value to current Groove clients.
Read the message between the customer and their team member below. The rep relates to the customer’s problem, cross-sells with the app, suggests a free trial, and offers to set up the service.
Image Source: Upsell in Your Customer Support Interactions by Len Markidan Groove
What’s the takeaway? Cross-sell to your client when it solves their issues.
It’s a win-win situation. Your customer receives another great solution from your brand, and your business gains more revenue.
2. Use Email Alerts to Identify High-Priority Leads
Hubspot lacked high-quality web technology data to help get their leads to the right sales team quickly. Their reps also weren’t aware when someone added a specific tech to their website. Therefore, they were unable to restart the conversation at the appropriate time.
With the help of Datanyze, Hubspot used data to send email notifications to the appropriate sales rep the same day their leads added or dropped specific technologies.
"[T]hese accounts are 3x more likely to become opportunities,” says Sara Davidson, Marketing Operations at Hubspot. Now,it’s less likely for leads to slip through the cracks.
Strategies for Improvement
It’s your turn to take action. Try one or both of these strategies:
1. Become A Trusted Advisor
Position your sales reps for success by making sure that they know the prospect inside and out. Train your team to become not only experts in your product, but also in the potential client’s industry.
From collected data, your SaaS company can understand the prospect’s business objectives and behaviors. Then, engage prospects with promotional assets, like industry papers and webinars to educate them on your product solution.
Build their knowledge, establish awareness, and then they will feel confident to engage with your company.
2. Improve Relationships With Segmentation
People are interested in products and services that address their desires. That’s why personalization increases engagement.
For instance, your company may provide billing and invoicing software with the goal to sell to office accountants and CEOs. For the office accountants, you would focus on the challenges of data entry and detailed reports. For the CEO, you would mention cost benefits and efficiency.
Segment your audiences to pinpoint unique pains. Prove to prospects that you grasp their specific needs. Above all, earn their trust and confidence.
Approach Sales Differently
The SaaS market is growing. But how will companies continue to gain more ground?
Small SaaS businesses should consider entering the enterprise market. Then, focus their sales model around customer-centric services. Plus, it won’t hurt to become the prospect’s trusted advisor.
To find and reach your perfect prospect, let our Datanyze team help you.