How to Sell SaaS Product: 10 Tips to Grow Your Customer Base

Are you building a SaaS product thinking that because it is a great product that it will just sell itself? If you are then you aren‘t the only entrepreneur to make this mistake.

Selling SaaS is hard work, and you can get an idea of how hard it is in “How To Sell Software As A Service (SaaS)?”. In this article, I will explain how best to go about selling your SaaS product.

Contents

Know SaaS-selling fundamentals:
Hire a great sales team and pay them well:
Find your right SaaS customers:
Generate leads for selling SaaS:
Handling objections well while selling SaaS:
Give effective product demo:
Keep your free trial period short!
Call your trial signup users within 5 minutes!
Make your customers successful
Example of SaaS companies that sell effectively:

Unlearn the SaaS selling myths:

In addition to the myth that SaaS products sell themselves, you need to unlearn more myths about selling SaaS. These are:

  1. “Sales metrics aren‘t relevant since my company is small” Wrong! – They are relevant, even if you have just started out. You need to understand your company‘s sales metrics so that you know which campaigns are working and which aren‘t. The key metrics are as follows, and you can read more about them in “SaaS Metrics – A Guide to Measuring and Improving What Matters”:
    1. Profitability
    2. Cash
    3. Growth
  2. “Data is all that matters”: It‘s not data, but insight that matter. If your target customers have opened some of your marketing emails, it is valuable to understand which ones they opened and which they ones they didn’t. Analyze the differences and gain insights.
  3. “Let me wait now that I have sent my proposal”: Instead, take control of the process between proposal delivery and closing the deal. Follow up with your customer, but not with “where are we with that proposal I sent?”, but rather with helpful support information such as a case study etc.
  4. “I wrote a good blog, now my customers will come”: They won‘t. The human race now has access to the most amount of content ever in the history of mankind. Distribute your content effectively, and pay close attention to the market whether the content aligns with your customer needs. Change content if it doesn‘t.
  5. “I will sell it when the product is perfect”: Instead, start selling the day you have got the product idea. Reach out to prospective customers via surveys and email campaigns asking them what they think of the product idea. Follow-up with a more concrete idea of the product to get their feedback once again. This way, you are involving your customers from the 1st day of your company, and you are selling your idea too!

Read more about the myths in “5 myths about SaaS sales you probably believe”.

Know SaaS-selling fundamentals:

As a first step, you need to do the following:

  1. Understand what your customers want, and for this, you need to listen to them first.
  2. Create desire in potential customers. Selling has an emotional component, your customers never buy just your product, rather they buy an image. They understand their needs, and only when they believe your product will fulfill these will they buy. Explaining your product features without creating that desire in them won‘t sell your SaaS product.

Read more about these important first steps in “Your product doesn’t sell itself”.

Know these non-negotiable best practices for selling Software as a Service:

  1. Reward the right practices, hence ensure your sales team focuses on the right ways of measuring success. The pipeline isn’t a good example, number of closed deals is. Reward salespeople that get deals closed.
  2. Stop frittering away your energy: Focus on selling your SaaS and ditch all those small side projects.
  3. Set an appropriate price for your product according to your pricing model: If you are trying to sell an awesome product with excellent features at a very low price, you risk prospective customers undervaluing your product. Align your sales approach with your pricing model. Read more about the rigor that goes into creating a SaaS pricing model in “How to Build Your SaaS Pricing Model”.
  4. Focus on your customers‘ needs: Stop selling your product features. Learn customers‘ problems and sell them on how your product resolves them.
  5. Have all the right people in the right seats: You need a consistent, performance-focused sales team that works hard and is passionate about what they are doing. You can‘t compromise on the quality of your sales team.

Read more about these best practices in “5 pieces of wisdom that will change the way you sell your SaaS”.

Hire a great sales team and pay them well:

Download Our Project Specification Template

You will have the task of hiring a great sales team. Here are the stages involved in this process:

  1. You and other co-founders must be the first people to sell your SaaS. This is a universal truth, irrespective of your sales expertise. Be hands-on, and start with prospects whom you know, for e.g. friends, past co-workers, past employers etc. Never fail to ask for introductions! A few notes about this stage:
    1. It‘s irrelevant how many customers you can get at this stage, what is important is that you learn from the experience;
    2. This stage allows invaluable insights into your market and customer expectations;
    3. You learn which metrics matter to your customers (prices, number of features etc.);
    4. This is when you develop your sales tools, for e.g. sales pitch, email campaign, etc.
  2. For the 2nd stage, you will build a small founder-led sales team that has 2-3 salespeople. Hire people that are hungry for success. You will need to balance your product development responsibilities while you lead this team. I stress the below points at this stage:
    1. Have at least 2 salespeople in the team, for friendly competition;
    2. You are still hands-on, and leading this team!
    3. When you hire, make sure candidate are able to sell their capabilities well.
  3. The 3rd stage involves hiring a junior sales leader who will lead 3-15 salespeople. Your sales leader should accomplish the following:
    1. Improve upon the sales approach developed so far;
    2. Build a good learning repository and expand on early learning;
    3. Grow, manage, and lead the sales team by establishing hiring process, quotas, commission structure, training, and coaching.
  4. Expand your sales team and hire a VP of sales is the 4th stage. The VP should lead a 25+ (depending on your company size) sales team, build sales strategy, expand sales channels, grow customer base, and improve your economics. More specifically, the VP should:
    1. Build your sales organization structure;
    2. Improve sales hiring and training;
    3. Enhance the commission structure;
    4. Improve talent management;
    5. Expand sales team both in terms of offices and channels;
    6. Close large deals.

Read more about it in “Ultimate sales hiring guide for B2B startup founders (the 4 key stages of sales hiring)”.

Find your right SaaS customers:

In “How To Build A Great SaaS Marketing Strategy?” I wrote about how to identify your target customers. Here it is in summary:

You need to develop an ’ideal customer profile‘. It‘s a fictitious organization and you need address the following to create the profile:

  • How are they valuable to your company? In addition to paying for your service, will they provide referrals and testimonials? Can they point you to new opportunities, or provide resources to grow your business?
  • How does your SaaS product help them? Does it improve their revenue, reduce their cost, or improve productivity?
  • You need to build the fictitious customers from real data. To get this real data, talk to your existing customers, and find out what value they actually get from your product.

When you getting feedback from your existing customers, don’d just contact them once. Their input will be valuable before you sell, after the sell, and after they receive value from your product. Ask them to quantify the value so you can understand how it works and how it doesn’t.

Learn more about this in “How to create your ideal customer profile for B2B lead generation”.

Generate leads for selling SaaS:

An important part of SaaS sales process is generating leads. You can source leads using any of the following approaches:

  1. Buy lists from reputable providers of potential customers. There are many such providers, for e.g. com, Data.com, and Infousa.com. You will get plenty of data but the quality will be low, and over 30% can be outdated.
  2. You can use a code web scraping program and extract data from websites. The quantity will be less than the 1st approach, and the quality of the leads will be a little higher. Be careful, many websites don‘t allow this practice.
  3. You will receive even lower quantity but better quality of data from a lead generation team if you outsource. You need to give them specific criteria. Costs might be higher but the returns are greater too.
  4. If you create customer profiles, you get the highest quality of data. You can do this if you have existing customers. You need to ask lots of questions to determine the common denominators, for e.g., company size, number of employees, the software they use, location, tenure in business etc.

If you have existing customers, using the 4th approach above could also give you potential customer referrals. These are best leads without a question. Read more about lead generation in “B2B lead generation basics for startups”.

Handling objections well while selling SaaS:

Selling SaaS products is complex, it‘s not transactional. When you sell to organizations, multiple stakeholders are involved, and this friction generates objections. I will describe two common objections a SaaS salesperson encounters, and how to address them.

The first objection is nearly always about price. By the time they raise this objection, you should have already a lengthy discussion with your customers about your product’s features. If they say that your price is too high then you either haven’t communicated the value of your product or they simply are not your target market. You need to do the following to handle such objections:

  1. Discuss price with customers only after they have fully understood the value of your product. This is a preventive measure.
  2. Assuming you have arrived at the price after carefully building a well-researched pricing model, you should stick to the price you have quoted. Do that, and steer the discussion back to values. Read more about creating a SaaS pricing model in “How to Build Your SaaS Pricing Model”.
  3. Shift the discussion to how much customers will save over time by paying the price you quote upfront. Once again, if customers understand the value, you will have sufficiently strong ground with this discussion.

A word of caution: Don‘t dilute the value of your product by getting fixated on a price discussion.

The second objection is when customers want an additional feature. You need expert salespeople to handle this kind of conversation. MAke sure you ask right questions to understand what customers really want, for e.g.:

  • What problem will the added feature solve?
  • Who in their organization will use the feature they request?
  • What are the long-term benefits of having this feature?
  • Can available workarounds help?
  • Is this a show-stopper, and if yes, why?

Remember that your SaaS product will never be everything to everybody. Don‘t commit to adding features in a knee-jerk manner. If you do so, customers may develop doubt about your product vision!

Read more about handling SaaS sales objections in “2 common B2B SaaS sales objections (and how to handle them)”.

Give effective product demo:

An important method to demonstrate the value of your product and to generate sales is your product demo! I strongly recommend the following so that you can make the best use of this while selling SaaS:

  1. Plan, plan, and plan. Set up a demo that gives you the best chance to make a sell on the spot! Plan logistics well, coordinate closely with your team and have all infrastructure tested well before the demo.
  2. Focus your demo on how the product will make your customers more successful. A long-winding demo of every unimportant feature isn‘t the way to go, you will lose their attention. Show them how your product will bring them success by solving their problems.
  3. Start with the most powerful feature of your product as that will make the biggest impact in your customers.
  4. Speak your customers‘ language, use only phrases and words that they will know. Avoid complex programming terms.
  5. Never interrupt customers when they ask questions or provide feedback.
  6. Be honest if you don’t know the answer to a difficult product feature-related question. Note it down, promise that you will come back to them with answers, and keep your promise! Don’t feel this is a bad idea. If it is good enough for Mark Zuckerberg then it will work for anyone.
  7. Prepare for product crashes during the demo, they happen!
  8. Don‘t commit to difficult requests, note them down and follow through.
  9. Limit your demo to 15 minutes, and no more!
  10. At the end of the demo, try to lead your prospective client into action. You want to try to secure the sale as soon as possible. That was the purpose of the demo, wasn‘t it?

Read more about product demos that sell in “How to give product demos that sell”.

Read How We Helped a Marketing Company to Build a Back-Office Custom Ads Dashboard

Keep your free trial period short!

A long free trial period will make your customers feel they have enough time to try out your SaaS product. However, organizations have many higher priorities to deal with, so a longer trial might not end up in a sale.

Keep your trial period short, preferably 14 days. It will make your customers think that they don‘t have too much time, and prompt them to act. The psychological push will make them try your product and get to know it faster.

This way you also reduce your sales cycle and thus your ’customer acquisition cost‘ (CAC) with a shorter free trial period. It‘s an important metric for all SaaS companies.

There is an exception to my recommendation of a short free trial period. There are products designed to lock users into them, for e.g. Dropbox. ONce you have backed up your files and pictures, switching to another product is hard work! You don’t want to have to download everything again and find another product. A longer free trial period is fine for this kind of SaaS product. However, most SaaS products don’t fall into this category.

To learn more about the importance of shortening your free trial period, read “SaaS startups: Why your free trials are way too long”.

Call your trial signup users within 5 minutes!

If you are a business-to-business (B2B) SaaS entrepreneur, this is a particularly effective method to increase your SaaS sales. You don‘t need exceptionally talented salespeople for such SaaS sales techniques.

It‘s simple! Call every trial signup user within 5 minutes. You don‘t need to say much. Just appreciate that they have just signed up and didn‘t try the product much, and you are there to answer any question they have.

It‘s a powerful action that some users like. If you wait for 30 minutes and call, your chances of a lead are much smaller. If you call within 5 minutes, you have 100 times higher chances of a lead and 21 times higher chances of qualifying that lead.

Learn more about it in “SaaS sales: Why you need to call every trial signup user within 5 minutes!”.

Make your customers successful

Now your customers are happy using your product, and haven‘t reported any major bugs or problems, life might seem great. 

But is it?

There is no time for complacency in the SaaS world. Ask yourself such questions as “have your customers started using your product as much as they should, to get real value?

Only minor support requests and no bugs may mean they are only using it sparingly, and haven‘t stretched your product to its limits. In other words, they may be happy with your product, but they aren‘t successful! Read more about it in “SaaS sales: Make them buy AND use your product”.

Stop selling! Visit your customers. See how they work and whether the product is an inseparable part of their working day. If it isn‘t, analyze what you can do to make them use it enough to get real value out of it. Listen to what they say carefully and find out if they need more features for effective use. Prioritize your customers’ satisfaction.

Only customers who use your product vigorously will test it to the limit. They then raise plenty of support requests, and they won‘t always be minor ones. Resolve all issues quickly and keep making them successful.

The difference between a happy customer and a successful one is that the successful customer can quantify the ’return on investment‘ (RoI) regarding your product. Only they get real value from your product. Only they will be your true advocate in the marketplace!

Remember that word of mouth is the best form of sales there is.

Make more customers successful, don‘t satisfy yourself with just happy customers. Read more about it in “B2B startup traction: Happy vs successful customers”.

Example of SaaS companies that sell effectively:

I recommend that you study the follow SaaS companies to understand why the fundamentals are so important:

HipChat: It‘s a private chat and instant messaging service that also offers cloud-based file storage and video calling. They have connected with their target customers exceptionally well with their innovative ad campaign. They were later acquired by Stride.

Contently: It‘s a content marketing company connecting freelancers with publishers. They manage the process leaving the writers to focus on what they do best, i.e. writing. The platform also allows writers to market their capabilities online. Their customer retention rate is very high.

Trello: Their collaboration tool is so great, organizations using it rave bout it! Here you have an example of a company making their customers successful!

First create a great SaaS product that will sell itself, but don‘t stop there. Create a detailed SaaS sales strategy and then set to selling your great product.

Download Our Project Specification Template