Easy 3-Step Framework To Create a SaaS Startup Sales Strategy
Even if you have an incredibly cool app, your success will vary based on marketing. Unfortunately, many IT experts simply try to wing it when it comes to promotional activities. And by the time they realize things aren’t going as planned, they’re neck-deep in massive debts.
There’s a reason why banks and other lenders ask companies for their business plans. In the end, creditors need to make sure there’s a market and demand for your particular product or service. SaaS tools aren’t much different in that regard. You need to discover your target audience and optimal channels before you roll out any software.
In this article, we’ll share a few tricks that will help you create an excellent SaaS sales strategy. But before we do so, let’s explain GTM or Go-To-Market framework.
What is GTM Framework?
Whether selling ice cream on the corner or an award-winning SaaS, you must understand your Go-To-Market. Turning a lead into a paying customer usually requires a long sales process involving a high degree of cohesion between sales and marketing teams.
Brands use the GTM framework when introducing a new product to the market. This is a set of strategic processes that help you position a SaaS and find the proper price, message, and marketing channel. GTM works on every level of the company and involves all departments, most importantly, sales and marketing teams.
Similar to other businesses, SaaS companies have to go through 3 stages of market development:
- Ideation (problem-market)
- Transition (product-market)
- Execution (platform-market)
During the ideation stage, the company is just getting its feet wet. They’re getting acquainted with the market and their target audience. They’re using the broadest possible messaging to acquire as many leads as possible.
For the most part, ideation is considered the least effective development phase. The brand still doesn’t fully grasp the customers and competition and is still vying for its place under the sun. The sales team uses cold calling to generate leads and hopes to convert any website traffic they get.
During this step, consumers are acquainted with the B2B SaaS and all its benefits. Leads are turned into accounts using extensive MarTech capabilities like (ABM), and it’s much easier for the company to plan its expenditures and profits. Instead of previously chaotic planning that constantly changes depending on the current budget, the company can set aside resources for growth.
The SaaS sales process is now joined by the marketing team. The company can utilize different growth channels and zero in on high-priority accounts.
Execution is a stage of development where the business focuses on the macro aspects of marketing. Instead of an individual SaaS, they’re offering product lines and platform-level solutions. This phase involves the sales and marketing team, but the company also relies on customers to promote its brand.
The business has enough leeway to invest in other projects instead of having to use resources on a short-term basis. Instead of using metrics such as the number of bookings, the organization is more interested in gross margins and customer ROI.
We use these terms to explain the basic stages of company development. However, we won’t have a full grasp of things until we combine them with 4 GTM framework questions.
4 Main SaaS Startup Sales Strategy Questions
Companies ask four questions to help you understand the ideal customer, market, and growth opportunities:
- Who is our ideal customer? (Market)
- What is the best course of action? (Operations)
- When to scale? (Velocity)
- Where can we grow? (Expansion)
Keep in mind that these questions change as the company changes and our understanding of the market improves. For example, during the ideation phase, you just want to know how your product can help consumers. By the execution phase, you’re trying to create/find additional features that will increase the product’s value to clients.
The market tries to answer several different questions. Among others, this process tries to define the target audience and market. It helps you understand your positioning and reach. As the company grows, you start adapting for the future and predicting market fluctuations, changes to the competition, client upselling, etc.
Operations revolve around KPIs. First off, the company is trying to determine if the basic product is good enough to address a particular problem. They’re looking for an MVP (minimal viable product) and PMF (Product Market Fit). In time, you’re looking for new solutions to increase the market share and customer base. You also start relying on different data sets for measuring performance.
Velocity tells you more about the speed of sales and how much time you need to transition to the next stage of growth. This generally comes after PMF, and there is a series A or B funding that takes place to support aggressive growth targets. Initially, you’re looking at the quality and training of your sales team. After that, you want to know how quickly you can develop products and grow your business to the next step.
Expansions don’t necessarily talk about future markets but instead about channels of expansions. Expansion channels analyze various product distribution forms and the type of results each approach provides. By the time we get to the execution phase, the discourse starts revolving around product lines and the company’s ecosystem as a whole.
After implementing all these models, you must introduce key SaaS marketing metrics such as pipeline growth and conversion rates. We also have to mention average selling price, CAC, ROAS, LTV, churn, and CAC:LTV ratio, amongst many others. These sales metrics will help you quantify each of these processes, helping you determine how close (or far) you are from the planned goals.
A SaaS startup can also use Gartner magic quadrant CRM to learn more about the market. Keep in mind that all this strategic planning is also important for modifying your software solutions, which would eventually lead to higher future sales.
3 SaaS Sales Models
Before going into specific marketing strategies, it’s important to find the best sales model. Depending on your choice, you can implement different approaches with varying efficiency.
As the name implies, the customer self-service model is a perfect choice for small, intuitive tools. The customer can quickly get acquainted with the software’s features and usually doesn’t even need a tutorial. This allows B2B SaaS providers to significantly cut costs on interaction with users.
Due to its simplicity, self-service SaaS might not even need a dedicated call center. These tools are usually cheaper, and even if there’s a minor glitch with the program, users won’t go crazy about it.
A good way to sell this category of tools is by offering free trials or a $1 Trial (to reduce tire-kickers). Due to low product prices, most companies can’t afford to keep full-time sales teams. So, users have to “sell the product to themselves.”
Transactional Sales Model
The transactional sales SaaS model is more expensive than self-service. It allows higher scalability, with providers usually targeting small and medium brands. Unlike the previous version of B2B SaaS, companies offering transactional type models often make direct or phone sales.
This category of products presumes more features and customization. The average purchase size is larger, so it makes sense for providers to create a call centre. Although the company might provide a free trial, the users don’t have access to the most important features, forcing them to purchase a full license eventually.
Unlike the self-service model, transactional SaaS has more leeway in terms of pricing. The sales team often has free reign to negotiate contracts and can add or remove features according to customers’ needs.
Enterprise Sales Model
Enterprise sales cycles are usually longer and are geared toward large buying teams made of (7+ buyers). This type of software offers numerous features and often consists of several smaller tools. The company sells a small number of licenses of high value, and each large account is critical for your survival.
Businesses that buy enterprise B2B SaaS products have full access to features and might even get some extra functionality compared to regular users. They get customer success teams and other forms of support. For example, you’ll also have to invest in a CRM customer engagement center.
These types of products might have demos but rarely offer a free trial. All in all, enterprise customers are willing to spend top dollar but also require support from your product marketers. During SaaS enterprise sales, it’s also good if clients can contact management if they have additional questions.
Choosing the optimal SaaS business model depends on your tool’s complexity. If you’re just trying to make some money off simple software, there’s no point in pursuing an enterprise sales model. You might transition to it as you add features, but for the first time, you’ll likely go with self-service.
Keep in mind that your product roadmap will affect market strategy.
8 Best Sales Strategies for SaaS Startups
Here’s our list of the best strategies that just about any brand can use:
1. Offer Free or $1 Trials
Companies should consider $1 trials as a type of test that helps separate casual “freebie” users from potential paying customers. Many people use the free version of a product to solve a particular problem. Truth be told, most of them are not even considering making a purchase.
Regardless, a segment of the audience would still use your SaaS permanently. This is your target audience. So, you should create a value proposition that would turn them into buyers. Here are a few tricks that will help you do just that:
- Find a suitable trial duration. Keep in mind that simpler tools don’t need long trials, as you can explore all features in just a day or two. But if you’re selling an all-in-one platform, it could make sense to offer an extended trial (upon customer requests) so that potential buyers can test all features and get hooked up.
- Consider what you wish to offer. Some of the features might be very beneficial, which is why you shouldn’t be offering them for free on the internet. On the other hand, this is something that might adversely affect your conversion.
- Don’t integrate ads into the SaaS tool unless you’re selling super simple, low cost and highly transactional software. It might alienate some of the users. What’s worse, it will make it look like you’re struggling for money and have to scrap for any cash. Generally speaking, it’s a cheap technique that might interfere with the buyer’s journey.
The most important thing to remember is that free trials are, first and foremost, a promotional method. They give trial users a whiff of the product’s features, enticing them to your brand.
This is why this iteration of the software shouldn’t be that different from the real thing. Otherwise, they might get disappointed when they start using it, which will lead to negative reviews and low customer retention. If you’re looking for a hybrid approach, you can go with freemium models.
2. Sell via Phone
Free trials are a powerful SaaS startup sales strategy, and you’d be crazy not to maximize their potential.
Many SaaS free trials require that you fill a contact form. Aside from the name and last name, you almost always have to leave your email. Some companies will use the address to send endless messages, trying to convert the users who haven’t made the purchase.
Unfortunately, this is usually a fool’s errand. Recipients usually delete these messages as soon as they arrive, and soon enough, your email will be tagged as spam. When that happens, any chance of making the sale evaporates.
So, we suggest a bit different approach. Instead of sending emails to your free trials, it’s much better to contact them directly. Having an employee on the line can help with any potential issues. For example, a person might be on the verge of making a purchase, but they’re worried about some of the features.
Here are a few benefits of this approach:
- Higher conversion rates and higher monthly revenue.
- An efficient way of separating between qualified leads and unqualified.
- Product improvements.
Getting people on the phone yields numerous benefits. Most notably, you can have a heartfelt conversation with some of the prospects so you can understand what is wrong with the product. This is especially important when the SaaS rolls out the product onto the market for the first time.
More importantly, this approach allows you to disqualify leads, so you stop spending resources on them. Of course, your success rate will vary depending on employees’ phone skills. If you find employees with enormous experience in sales, you can significantly increase conversion rates, reduce buying cycle times, and increase future revenue.
Despite the fact this is a public secret, many SaaS companies still don’t sell via phone. The reason for this is simple: they’re too afraid of going outside of their comfort zone. Even worse, they might think they don’t need a marketing and sales team.
3. Provide Demos and Previews
Nowadays, it’s common for companies to post a video on their homepage showing the SaaS tool’s main features. That way, a potential client can quickly figure out if this is the right product for them.
Similar to phone calls, previews help disqualify leads but also attract customers. They make your campaigns more focused while simultaneously increasing conversion rates. Here are a few ways to create an effective promotional video for your site:
- Create shorter videos of up to two minutes. Otherwise, there’s a risk of a visitor bouncing.
- Place focus on benefits, not necessarily features. In the end, a competitor might always have a better feature, but you can still win over a customer by focusing on pain points.
- Make sure that the video is engaging. The editing might sell a less potent tool.
- Try to simplify the content. You should explain each function and benefit in one or two sentences.
Aside from preview videos, you should also use demos for prospective clients. In fact, they might be a necessity depending on the size of your tool and SaaS business model. Keep in mind that demos usually differ from free trials. For example, they should have all the features that were previously hidden in the test version.
Demos should be provided per request. They allow users to test everything and compare the features to other options on the market. Besides increasing conversion, they’re an excellent way of disqualifying leads.
4. Consider Payments
When you develop a sales strategy, you should focus on two things: available plans and payment options.
Although it might seem that creating SaaS pricing plans is easy, it’s everything but. In fact, just by looking at the available options, you can tell a lot about the software and the company’s policies.
Of course, every business professional would love to sign multi-year contracts straight away and master B2C sales overnight. However, clients are not that excited about unknown software. They will likely take their time with shorter plans and explore all of the features.
If you wish to make extra profits, you should try to push monthly plans. They are more expensive and are more popular among first-time buyers. Furthermore, the buying journey is much shorter. On the other hand, selling annual or even lifetime licenses will provide an immediate influx of funds.
This is especially important if you’re struggling with money or want to reinvest. While annual contracts are less profitable, they provide more resources in a shorter time frame.
Keep in mind that your ability to manipulate plans depends on the potential leads’ perception of the SaaS. If you’re the leading platform on the web, you have more leeway when creating plans. In the end, people will buy from you no matter what.
If you have limited experience with web stores, you might think that the best approach is to add as many payment options as possible. Truth be told, this makes sense. If people can pay with just about any credit card, you can always rest assured there won’t be any hiccups during payment.
Offering numerous options will definitely increase your conversion and simplify purchases. However, don’t think that customers will be super grateful. The only thing that can make them appreciate your brand is if you provide a fantastic, irreplaceable SaaS.
Given that people nowadays have several credit cards, offering numerous payment options is more of a preference. As long as you support Visa, Masters, and PayPal, you’re good to go. In fact, going with numerous payment options can lead to maintenance and management issues.
So, before adding new providers, consider all the pros and cons beforehand.
5. Don’t Take The Cheap Route
SaaS startups are almost always worried about money. Given that these companies are commonly established by IT experts, their owners usually have a poor understanding of economic mechanisms.
Anyway, even if you’re struggling with cash, you should never try to discount heavily. While this approach might help you stay afloat initially, it will eventually come back to bite you. For example, just imagine how your long-time clients will react if you suddenly double your prices overnight.
Regarding prices, here are a few things to keep in mind when it comes to digital selling:
- People assess products primarily based on value-added. If a SaaS can help them solve a burning problem, they will pay any amount of money.
- Price can also be a reflection of value. Your target audience perceives cheap tools as a worse option. So, if a prospect is already looking to spend $30 or $40 on software, $10 more won’t make a difference.
- Adding discounts can also cause issues. They can alienate your older, faithful clients who paid more for the same service. Discounts also make it harder to predict annual recurring revenues, completely messing up your financial projections.
- Reducing the price might also cause motivational issues. For example, it can reduce profit margins for your sales reps as well as your own paycheck as an owner. And while some companies perceive this move as a necessity, it might cause internal turmoil.
So, what should you do if a product doesn’t sell?
Simply put, you need to work harder. Your IT team should add new features and improve the existing ones. Similarly, your sales and marketing team should put more effort into promoting your B2B SaaS.
And while we do understand that certain SaaS niches are highly competitive, you still need to outwork your competition to stay on the market.
6. Revise Customer Acquisition Costs
At the start of this guide, we’ve mentioned how important it is to find the right marketing channel. When selling a B2B SaaS, you shouldn’t focus on the number of sales and their value. Instead, you need to consider how much it costs you to close a deal.
Some companies can survive with a small number of clients as long as the acquisition cost is low. In the end, if you spend hundreds of dollars to sell five cheap monthly licenses, you’re probably doing things wrong.
Here are a few ways to reduce acquisition costs, thus making your operations more efficient:
- Pay your employees based on performance. Even if you’re offering a high percentage on every sale, it beats spending money in advance. In fact, giving fixed salaries to salespeople will only make them lazy.
- You can do wonders with affiliate marketers. Find influencers on social media and hire them to promote your brand. Even if they never make a sale, you’ll still get free advertising.
- Consider long-term development against short-term sales. For example, putting money into SEO is a fantastic way to build brand awareness and pipeline over time, but it’s less than ideal for generating fast high-quality leads overnight. Instead, you might want to try paid ads like Google Ads or Paid social.
- Stimulate reviews and word-of-mouth marketing through good manners. Online user feedback is crucial for accessing products and services, especially if your tool focuses on the local market. Even if you have one of the worst SaaS products, you can do wonders by simply being cordial because people respond to politeness.
- The best way for a business to grow is by retaining its current customers. Keep in mind that acquiring new leads and customers can be extremely expensive for specific SaaS. With existing clients, you don’t have to worry about acquisition costs. Instead, you’ll just have to provide solid customer support.
- Automate your sales and marketing with other B2B SaaS tools. Use tools that will speed up email marketing campaigns, record phone calls, and help with other repetitive tasks.
- Reduce client acquisition costs by improving marketing materials and marketing techniques and improving the performance of sales teams. Eliminate low-performing sales teams and provide ongoing sales training to improve performance.
Of course, to implement this process, you’ll first have to calculate the average selling price ASP.
7. Get More From Existing Clients
As we’ve already mentioned, acquiring new clients is the hardest thing. You have to spend enormous resources to build trust with a person or a company. Once you close these accounts, you should try to squeeze as much money as possible from them.
What can you get more from your current clients?
- Upselling and cross-selling.
- Create referral programs.
- Customer loyalty programs.
- Follow-up on inactive/former clients.
Your choice of optimal SaaS marketing strategy may vary based on the product and sales model. For example, if you have a complex SaaS product and are using enterprise sales, it’s much easier to upsell.
Among others, it’s an excellent strategy to contact previous clients and ask them why they haven’t bought your SaaS product. The problem might’ve been technical, and you can retain a person with a simple call. Small things such as this can significantly reduce the churn rate.
8. Use Content Marketing to Convert
You can significantly boost your agile marketing efforts by having a fantastic content marketing strategy. In the end, any visitor is a potential client if you know how to drive them properly down the sales funnel. Among others, good copies can address sales objections, reduce sales cycle time, and improve client retention and client relationships.
Content marketing can be used for just about any digital channel. In fact, we suggest that you experiment with the different approaches until you find an effective inbound marketing strategy. Some companies can efficiently promote their software product via social media, while the rest can do a great job converting website visitors.
Not only should you create enticing copy, but you should also improve individual customer experience. In that way, you can create a great impression on a lead even before their first interaction with sales reps. Keep in mind that you don’t have to write a white paper or do extensive research.
What is a B2B SaaS sales strategy?
B2B SaaS sales strategy pertains to various methods that companies use to turn leads into customers.
What are the biggest business challenges with SaaS?
Companies might encounter numerous issues when selling their SaaS products, including long sales cycles, product complexity, qualifying leads, etc.
Is selling SaaS difficult?
Your success in selling SaaS products will vary based on planning, marketing, and product quality. In that regard, selling software is no different than selling any other product.