There’s never been a better time to be in the SaaS game. Organizations are using more SaaS products than ever before, with the number of apps adopted by the average company doubling from eight to 16 between 2015 and 2017.
But that’s not to say that a SaaS product is a license to print money.
Competition in the sector is ferocious. New players are entering the market every day, while big incumbents are consolidating their positions by snapping up their smaller rivals. No wonder then that a fifth of SaaS founders admit competitive pressure keeps them up at night.
If you’re going to survive and thrive, you’ll need more than just a great product. You also need to get your sales tactics spot on. Here’s how to do it:
1. Keep Free Trials Short and Sweet
Free trials are a big source of new business. Three-fifths of SaaS organizations generate at least some of their business from free trials and freemium models, with one in six winning more than 50% of new clients via this approach.
But how long should your free trial last? Too long and it loses its urgency; too short and your prospects won’t have time to check out the full feature set.
In reality, there’s no reason why your free trial should last any longer than 14 days. In fact, take a look at your data, and you’ll probably find that the majority of users call it quits after about three days.
Much better to leave your trial users wanting more than for them to get bored and bow out halfway through.
2. Make Your Product Upsell-Friendly
With all that focus on winning new business, it’s all too easy to neglect upsells.
When handled right, your existing clients can be an invaluable source of new revenue. What’s more, it’s almost twice as expensive to win additional recurring revenue from a new customer than from an existing client.
Take a look around the SaaS market, and you’ll see that the fastest-growing businesses are much better at upselling than their slower-growing rivals.
What sets these expert upsellers apart?
For one thing, they’re actively trying to upsell (when appropriate). But more importantly, they almost always have products that are upsell-friendly. They offer additional functionality for a recurring fee, and they use data to identify when customers are edging close to their usage limits or interacting with premium features.
Or, if they can see that customers are making heavy use of a specific tool, they’ll be quick to suggest how an upsell-able feature could create substantial efficiencies. In that way, it’s less about sales, and more about adding genuine value to your customer base.
3. Personalize Your Email Campaigns
Hopefully by now you’re already using at least a basic level of personalization. Why wouldn’t you? It can deliver five to eight times the return on marketing spend, in addition to lifting sales by 10% or more.
That said, there’s much more to effective personalization than simply using a prospect’s first name a couple times. You should also be integrating segmentation into your personalization strategy. Create customer personas, use them to segment your email list, and then target each segment with personalized content.
Let’s say you offer a SaaS-based bookkeeping and accounting service. You could create the following personas:
- Prospects with <$1 million revenue
- Prospects with $1-5 million revenue
- Prospects with $5-10 million revenue
- Prospects with >$10 million revenue
Those in the most valuable segment are probably going to have very different needs to those in the lowest-value segment. So why would you send them the same content and sales messages?
4. Strike While the Iron’s Hot with Trial Sign-Ups
Let’s talk some more about free trials. As already noted, they can be a key source of new business – provided they’re done right.
As well as getting the length of your trials spot-on, you need to give some thought to how you follow up with trial users.
You’d be shocked how many SaaS startups don’t even bother to call these potential clients. Of those that do, many wait until the very last day of the trial. What’s the point in a follow-up call that has no chance of adding value or influencing usage during the trial period?
Once a user signs up for a trial, your sales team should be calling them straight away to offer practical advice on how to make best use of your product. Arrange a follow-up for halfway through the trial period to find out how they’re getting on, and to highlight extra functionality and tools. The more features they use, the more likely they are to become a paying customer down the line.
5. Persistence Pays
No one gets into sales for an easy, stress-free life. The best salespeople aren’t just the most naturally gifted – they’re also the hardest workers. Consider the stats:
- It takes 18 dials to connect with a prospect
- Call-back rates are typically below 1%
- Less than a quarter of sales emails are opened
If your salespeople aren’t prepared to put in the hours, hammer the phones and nail their cold email outreach, don’t expect to sell much – however ground-breaking your product may be.
6. Ensure Product Demos are Short and Value-Focused
Free trials aren’t the only aspect of your sales strategy that should come in bite-sized form. Where product demos are concerned, brevity is your best friend.
When the average human attention span is just eight seconds, who needs a two-hour product demo? Don’t attempt to showcase the full breadth of your offering in a single presentation.
Instead, use your understanding of the prospect to pick out no more than two or three features – those that will make the biggest difference to their working lives. If that only takes 15 minutes, so be it. There’s nothing to be gained by dragging out a demo for the sake of it.
7. Better to Be Too Expensive Than Too Cheap
Pricing is a massive issue for SaaS companies, particularly for startups. In fact, it’s a huge deal for B2B businesses in general, with 85% admitting that their pricing decisions could improve.
Unfortunately, it seems we’re often far too willing to undervalue ourselves and our product in the hunt for a quick deal. But while this might lead to success in the short term, over the longer term, pricing your service too cheaply is a recipe for disaster.
It’s not an issue if your product is too expensive for some prospects. Actually, if you never lose a single would-be customer over pricing then you’re definitely too cheap.
Sure, every buyer is price-conscious. But if you’re only winning new business by undercutting the competition, chances are you don’t have a sustainable model or a loyal customer base. Don’t expect those subscribers to stick around for long if a cheaper offering appears.
Timing is Crucial
An underlying theme runs through many of the above tips: from the length of your product demos to the speed with which you chase up free trial users, timing is key.
Why is it so important? Because people are busy and attention spans are short. If you can communicate your message and your product’s most attractive features concisely while still getting across all of the necessary information, you’ve got a recipe for a winning sales strategy.
Get your timing right, and you’ll be in a position to convert far more prospects into customers. Get it wrong, and you’ll lose out to your competitors again and again.
What are you doing to drive SaaS sales? Got a killer email template or a product demo technique that converts every time? Share your experiences in the comments below…