It’s no surprise, as the SaaS industry is a unique one – although it is expected to reach a whopping $157 billion by the end of 2020, the cloud application services market is still the largest. a big challenge for all new entrants. A question may arise, what is the sales model or what is the difference between it and the sales process.
We’ll keep it short and simple and let you know that the sales process is how prospects become your customers (from awareness to decision-making). While the sales model is your company’s basic approach to sales.
e That’s another question, which factor will play the most important role in most cases but the sales model your SaaS business uses will play an important role in the survival of the business. Your SaaS. We will introduce you to the three main ways and share some tips on how to choose and the challenges to come.
1 – Self-Service
When You are looking to generate substantial revenue as a new entrant in the SaaS market, the price of Your product should not exceed $5000. In fact, the suggested price for the self-service model is within between $1 and $1000, because that’s what your target audience is willing to pay. Thus, the self-service sales model geared towards low-cost products comes with a fully automated customer journey. Most commonly, startups using this service sell their products entirely through e-commerce, so that they can focus on the quality of the product and the design.
Focus: Product and Customer Journey
For this model to work, both your product and your customer acquisition strategy need to be completely free of conflict. The product itself should be developed with single users or small teams in mind, while every touchpoint between a potential customer and the actual purchase should be lean and optimized for self-service. The same goes for website, customer support, and user referrals.
With such low prices for SaaS products, you can hardly afford to make large investments in lead generation, which means that the customer experiences you provide should be streamlined and complete. mistakes to convert customers from potential to paying.
Since you also need to be frugal with marketing, a viral message or an outstanding content marketing campaign can help you a lot.
2 – Transactional
A hybrid of self-service and business, the transactional sales model requires a product that’s a little more expensive than $1000 and a proven lead generation strategy. Usually, the price point for this model is not higher than $3000 . However, product price is not the main difference between these models.
When compared to those using a self-service model, SaaS companies with a transactional sales model also provide professional customer referral services, in addition to an automated e-commerce site.
Focus: Refer customers and convert directly
Thanks to higher-priced products, SaaS startups that choose a transactional model have more money to spend on customer acquisition.
This means that those companies are also product-oriented, but also include a small team of in-house account managers to help them capture and convert by providing real-time support during the software purchase process. soft.
That way, potential customers can browse the website and make decisions on the spot, but they must contact the company’s dedicated account manager or sales engineer directly to complete the transaction. buy.
The transaction model will fit your goals if your target audience includes medium and large businesses and if the product you’re trying to sell has high revenue expansion potential (if customers customers are likely to pay more and more over time.
3 – Enterprise (Enterprise)
With this sales model, a SaaS service provider can earn more than $100,000 per year on a product, but only as long as the company is equipped to meet all the requirements of the selling business. B2B goods, By definition, this includes a number of things, all equally important to making this model work. First, both the product itself and the customer service that comes with it should be at the enterprise level. Then, your company’s sales team must be skilled and experienced enough to handle the delicate, long-cycle sales process often associated with a business’ B2B sales.
Focus: B2B business sales
Selling to businesses is never easy, simply because these businesses make purchasing decisions over a long period of time and it is not until the majority of board members feel confident enough to make the purchase. cast your vote. Since salespeople have so much to do, it’s easy to see why they’re not experts but just experts in their niche.
It’s also why SaaS companies using an enterprise sales model must be able to rely on both on-site and off-site sales reps, which doesn’t come cheap.
On top of that, dealing with premium clients means that your company’s website content and customer service should also be in the spotlight. For startups that are still on the rise, the business model for all these reasons is considered too costly and risky.
How to Choose the Best Sales Model for Your SaaS Company?
With an enterprise sales model unsuitable for self-funded SaaS startups, your decision should lie somewhere between a self-service model and a traditional one if you don’t have a plan.