How to Increase Sales in Your SaaS Business
Last updated on
December 2, 2022
There’s no way around it—SaaS sales are tricky. You have to target the right customers, convince them that your software is the perfect match for their needs, and stay with them throughout their user journey.
On the other hand, no industry can boast a more rewarding sales process than the SaaS industry.
SaaS providers get to use a large arsenal of tools in their sales efforts, from online demo platforms and CRMs to marketing intelligence tools and lots more, which helps them develop closer relationships with their customers.
This article will provide you with critical knowledge about the SaaS sales process and arm you with insider tips and tricks that will help you close more high-quality sales deals than ever before.
Without further ado, let’s dive right in with the first tip.
Table of Contents
Never Close a Bad Deal
To be able to further increase sales, it’s best to first prevent chasing unfruitful deals that drain your resources. It may sound counterintuitive, but closing a sales deal can sometimes cost you a lot of money.
This happens when you sell to bad or unqualified prospects—potential customers who aren’t a good fit for your SaaS product.
Have a look at the sales funnel below. As you can see, not all prospects will, or indeed should, become customers. Determining whether your product is valuable to your prospect is what lead qualification is all about.
Unsuitable prospects are unlikely to succeed with your product. Instead, they will put a lot of pressure on your customer service reps and eventually churn, meaning the resources you’ve invested in them will go to waste.
In fact, they may even cost you future customers if they decide to voice their displeasure on their social media or leave you a bad customer review.
To avoid this, your sales team needs to be comfortable saying “no” to some prospects, even when they seem like an easy sale.
Here are some tips on recognizing prospects who probably won’t get value from your product:
- They don’t have a clear understanding of what your company offers. If a customer isn’t sure about what they can get from the product, they won’t be able to use it adequately.
- They don’t have a good idea of what kind of solution they’re looking for. Therefore, it’s impossible to know if your product is a good match for their needs.
- They complain about the price. If they can’t see the value in what you’re offering, they won’t be satisfied with the product.
Once you’ve identified prospects who aren’t a good fit for your product, communicate why you think your product wouldn’t be the right solution for them and point them to one that may suit them better.
Keep in mind that selling at any cost isn’t a good strategy for growth. By turning away prospects who aren’t a good fit, you’re not only stopping them from making a mistake but also preventing losses for your company.
Optimize Your Email Campaigns
Email campaigns are a tried and true method of generating customer interaction and boosting sales.
As the graph below shows, professionals rate email marketing as the most effective digital media channel for reaching potential clients.
In addition to being effective, email campaigns are flexible and cheap. They can be created, customized, and sent to a large number of prospects with minimal effort and cost. That’s why they’re worth investing in.
As you can see above, email marketing has the largest return on investment, by far.
Effective email campaigns generate valuable sales prospects and keep your product at the forefront of a potential customer’s mind.
So, here are a couple of tips on how to optimize your email marketing strategy.
Number one, if your team is drafting each email manually, you’re losing valuable time and resources. The solution is to automate the process.
Email automation services, like Reply.io, will help you craft email campaigns that can reach prospects while still looking customized and personally crafted.
Once you free up their time with automation, your team can concentrate on more important matters, such as qualifying leads.
While you’re at it, don’t stop at sending just one email. Be persistent and keep emailing quality prospects. As Christoph Janz, a famous SaaS investor, says:
“If no one is calling your emails 'spam', maybe you're not sending enough emails.”
An optimized email campaign includes multiple emails because most prospects will forget about your email as soon as they open it. Your goal is to pique their interest enough that they book a demo or subscribe to a trial version of your product.
Have another look at the example from Reply to see how you can send multiple emails using email automation software.
But try not to overdo it—if you send too many emails in a very short period of time, your prospects might get irritated.
Finally, remember to keep your sales email short and to the point. A great majority of your prospects won’t do more than skim your email, so you need to do a good job at capturing their interest with as few words as possible.
Let’s look at a good example.
In as little as four sentences, this sales email manages to make a short introduction, capture the recipient’s interest with value, and provide a call to action. There’s not a single word out of place.
Email campaigns are one of the most potent weapons in your arsenal. They can provide your sales team with valuable prospects ready to buy your software and become happy customers.
That’s why it’s a good idea to optimize your email campaign as much as possible.
Give Short, Value-Focused Demos
Your sales demo is where prospective customers get to see how your product can alleviate a pain point and make their life easier. That’s the moment when they decide to become a full customer.
Therefore, demos are a pivotal moment in the sales process. When done right, they trigger the prospect’s decision to buy. On the other hand, a poorly executed demo can make your prospect think they don’t need your product after all.
What follows is that your demos need to focus on the value your customer can get from your product.
Have a look at the example above. The value customers can get is clearly stated even before the demo starts.
To ensure your demos are hitting the right mark, the first thing you need to do, once again, is to qualify your leads. Only the prospects who can really use your product will actually be persuaded by an excellent demo.
Once you’ve identified the right prospects and signed them up for a demo, use the time you have together to talk about how your product will help the customer achieve success.
Don’t use the demo as a training session. Your goal isn’t to showcase your product but rather to demonstrate value.
The best way to do this is to personalize your demo. Make it a conversation between the sales rep and the customer and ask about your customer’s pain points so you can show them how your product can solve them.
As you can see above, asking the right questions will ensure the prospect stays engaged and discovers value throughout the demo.
Personalizing the demo also has the added benefit of building the relationship between your company and the customer. This is important because 71% of customers decide to buy because they like, respect, and trust the sales rep.
Finally, make your demo as short as possible. Fifteen minutes should be enough time to convince potential customers that your product will be useful to them.
Remember that your product demo is the point when your customers get their Aha! Moment. They discover how your product can make their life easier, which motivates them to buy.
Therefore, it’s the aspect of your sales process that’s most likely to result in a conversion.
Keep Your Trials Short
Other than offering demos, trial versions of your software are another way to showcase the value of your product.
SaaS companies like to make users fall in love with their products, even before they commit to buying.
Free trials are an excellent way to attract business, and it has been proven to improve sales for SaaS companies. More than 60% of SaaS companies attract new customers with free trials, and 16% have even stated that more than 50% of their new business comes from trials.
However, you can definitely have too much of a good thing in this case. Many SaaS companies make the mistake of offering very long free trials, which can actually hurt sales efforts.
This may sound counterintuitive, but here are some factors to consider.
For one, users will rarely use your product for the entire duration of the trial. In fact, around 80% of users will stop using the trial after only two days.
Secondly, long trial periods kill momentum in the sense that users feel comfortable delaying the decision to subscribe to your software.
Finally, the longer your trial period, the higher the cost of acquiring the customer (CAC) because the user enjoys free customer service and stays in the sales funnel for too long.
So how long should the trial period be?
In most cases, no longer than 14 days.
For most companies, that’s enough time to showcase all the essential features of the product and onboard the user who can go on to become a full customer that needs minimal attention after signing up.
As you can see above, two weeks is the trial period sweet spot that allows your user to get the most out of the trial, while keeping the momentum high and CAC low.
We ourselves at Trevor.io follow this practice, offering a two-week trial of our platform (with no product limitations and no credit card required).
We allow interested customers to try out our product for 14 days, completely free of charge because we’re very confident that’s enough time to make your whole team fall in love with the app.
Sell Annual Plans
The SaaS subscription-based business model has its advantages and disadvantages.
It enables customers to pay for software in more digestible increments. On the other hand, it can strangle the company’s cash flow and provides ample opportunity for customers to churn because they are in no way tied to the company.
The solution to this is high-risk and high-reward: offering annual plans.
Let’s have a look at the example from the media monitoring software Media Toolkit. This SaaS company has a good practice of offering both monthly and yearly payment options.
Note that it’s not one or the other, but both, which works best for attracting different types of customers.
The advantage of offering annual plans is multifold.
- The annual prepaid model brings in revenue in larger increments, meaning cash flow is more relaxed. This allows you to make bigger investments and grow faster.
- It filters out reluctant customers. That plays into the first piece of advice in this article: don’t sell to unqualified prospects.
- On the other hand, it attracts high-value customers with higher purchasing power.
- It dramatically reduces churn.
Take a look at the graph below.
As you can see, the more annual plans you manage to sell, the more you can reduce churn rates. This is because customers need to be sure they really want to commit to your product, yet have fewer chances to back out.
So, when and how should you implement annual plans into your pricing strategy, and why isn’t everyone doing it?
Well, if you’re a new startup, it makes more sense to offer monthly plans because you want to see how many customers will churn naturally. By trapping customers in annual plans, you will have a much harder time learning how your product can be improved and perfected.
However, according to some sources, once you’ve reached the $1 million in ARR milestone, that’s the point when you should start offering annual plans.
Related reading: Understanding ACV for SaaS Business
As for the how, that’s where your sales team comes in.
Once again, you’ll need to qualify your prospects to find the ones best suited for annual plans and craft the perfect pitch to convince them to opt for those.
That may not be enough, though. Customers will often need an additional incentive. Have another look at the pricing plans from Media Toolkit above.
You’ll see they offer a very enticing two-month discount for customers who opt for annual plans. In most cases, an attractive discount will be enough to sway a customer.
All in all, offering an annual plan can help you worry less about things like cash flow and churn. When the time is right, offer it alongside your monthly payment plan as a part of a robust and high-earning sales process.
Upsell and Cross-Sell To Existing Customers
In the world of SaaS business, upselling and cross-selling is a powerful way of boosting sales and expanding revenue. It involves offering software upgrades and additional products to customers you already have.
This method relies on one of the most basic facts of sales: It’s easier to sell to existing customers than to new ones.
As you can see above, the probability of selling to an existing customer is 60-70%, so it’s only logical to focus more on existing customers in an effort to boost sales.
Moreover, the customers you already have are 50% more likely to try out new products and features you’re offering and will spend 31% more money than new customers.
Those are some powerful numbers. What they tell us is that selling to existing customers, in the form of upsells and cross-sells, can bring in more revenue than devoting all of your focus to acquiring new customers and selling them the basic package of your software.
That means upselling and cross-selling aren’t just advisable. They’re a necessity in SaaS sales.
With that in mind, let’s look at how these additional sales work and go over some good practices in implementing them.t
We’ll begin by explaining the difference between the two strategies.
Cross-selling is the process of selling another product in addition to the primary object of a sale.
This strategy is less common in software than in other industries, but there are examples.
Microsoft has always been great at cross-selling. For example, when you buy the Microsoft Windows operating systems, Microsoft will advise you to get Office 365 as well for a more complete user experience.
Upselling, on the other hand, is an integral part of SaaS sales. It involves offering a basic package of software, with the option of expanding and upgrading features for a higher price.
Have a look at Zendesk’s pricing options below. Even at first glance, you can see that the most expensive plan has almost twice the number of features as the basic plan.
Obviously, the best tactic to employ is to cross-sell and upsell to customers right off the bat by convincing them to skip the basic package entirely and subscribe to additional features and higher-priced plans.
But that only works with high-value clients and large companies because enterprise clients are usually the ones with enough purchasing power to start their user experience with the more expensive packages.
Additionally, they’re the ones who are more likely to use the more advanced features of your software in their work, so the basic packages are often not enough to satisfy their needs.
For other cases, your sales team is just going to have to be persistent in showcasing the value of additional products and expanded features.
You can do that with an excellent email campaign or a dedicated customer success rep who will call existing users and explain how they can benefit from upgrades and additional purchases.
In the example above, an email from Infogram serves to convince a basic user to upgrade her plan by showcasing the features she has been missing out on.
Remember that a large part of your revenue can come after the initial sale, specifically from cross-selling and upselling to customers you already have.
Consequently, if you want your sales at peak efficiency, don’t just focus on acquiring new customers. Instead, do your best to retain the customers you already have and find ways to keep selling to them.
In contrast to other industries, SaaS companies need to constantly stay on their toes and make sure they’re selling to the right people who will stay with the product for a long time.
Hopefully, this article has successfully shown you some of the industry tricks you can implement right away to start seeing significant improvements to your sales results.
There are many tools at your disposal, such as razor-sharp marketing campaigns, sales demos, free trials, and upselling and cross-selling strategies.
Don’t be afraid to experiment with each of these to find your perfect sales process and watch your sales team transform into a revenue-generating machine.