The essence of the software-as-a-service sales model is volume and speed. It is a reflection of the larger SaaS business model that assumes large economies-of-scale and low subscription-based pricing. The result is that the SaaS sales operation needs to be managed as a tightly integrated service delivery system, like an airline or a luxury hotel, with each functional group working in tandem to deliver a coherent customer experience. It requires a motivated sales team on the front line that is backed by a strong process infrastructure and a service-oriented culture, as contrasted with the lone-wolf road-warrior approach of traditional enterprise software.
This is the first post in a series of 10 Tips for the SaaS Sales Executive tasked with growing revenue and building the sales capabilities at an ambitious software-as-a-service startup. This post will discuss key aspects of sales organization strategy. Future posts will provide additional tips for accelerating revenue growth, improving sales process efficiency, and finally scaling the sales operation profitably in a high growth environment.
SaaS Sales Tip #1 – Instill Customer Service Excellence
Customer focus is not a new idea, but the difference between theory and practice can be striking from one business to another. Achieving customer service excellence begins with values and culture, but in a high-volume business it must also be ingrained in process. The best values in the world will not help if your salesperson fails to satisfy your customer due to faulty systems or information. In fact, over time faulty service processes will erode even the strongest cultural values, because everyone will lose faith as they see the hypocrisy between what you promise and what you can actually deliver. Moreover, if your business is going after the SMB market or some other under-served segment, then service can be a critical differentiator. It is more likely than not that your high-end enterprise software competitor qualifies out and ignores your sweet spot prospects, because it cannot service them profitably. This creates frustration that you can turn to your advantage by outperforming the competition in good old fashioned customer service. However, this advantage will be forfeited if you fail to establish a strong service culture and back it up with the right sales support systems, including your web site, communications infrastructure, sales automation, selling tools, training and interdepartmental cooperation, so that your sales team can deliver the goods.
SaaS Sales Tip #2 – Build the Right Team for the Job and Keep it Motivated
Sales is a tough job in any industry, but it is particularly so in SaaS. The skills required to bring in a $1M quota when the average deal value is $10K are distinctively different from those required when the average deal value is $1M. That’s 100 deals vs. 1 deal, and that can easily translate into 100 times the activity level and 100 times the frustration if sales staff are not supported by the right management, process and culture. SaaS sales reps are a unique breed and must possess a personality with an extremely high level of energy and enthusiasm that thrives on human interaction and constant activity. But, even the most energetic sales rep will need frequent encouragement and regular breaks in the action to maintain the level of motivation necessary to succeed over the long haul. Therefore, it is essential to maintain a work environment that is as motivating as it is intense. How this is accomplished will vary by organization but public celebration of individual success, ongoing coaching and mentoring, team building activities and a few fun perks are good places to start. Beyond that, it is a matter of hiring the right people, because hiring the wrong salesperson can be a very expensive mistake in terms of lost revenue and costs. To balance sales performance against acquisition cost, it is important to find candidates with just the right skill fit for the job. Over-hiring and under-hiring are both easy mistakes to make. You should develop a clear understanding of the ideal candidate profile required for success in your specific business before conducting a single phone screen.
SaaS Sales Tip #3 – Kaizen
Kaizen is the Japanese concept of continuous improvement popularized in the Total Quality movement that originated in Japan and was exported to American manufacturing and service organizations throughout the 1980s and 90s. The SaaS sales organization should strive for continuous improvement that drives up sales efficiency and squeezes out unnecessary acquisition costs without degrading quality of service. In a rapidly growing business, continuous improvement can take on many different flavors. Although essential, it is not only a matter of increasing efficiency by automating routine tasks, such as online purchase or pipeline reporting. When your business is growing, your sales organization and process must not only improve, it must also adapt, which means maintaining a high degree of flexibility and tolerance for change as you increase efficiency. For example, you will frequently hear that you should separate sales and account management, hunters from gatherers. But, this is only one organizational variation that you may need to evolve into as you grow. Reps may wear multiple hats for months or years, and then need to have their responsibilities redefined as the organization grows. Have a long term organizational vision, watch the trends, and consciously decide when to take on new organizational complexity or to eliminate a manual task through automation. Keep your team in the loop, because the best improvements often come from the ground up. And, nothing kills motivation like missed expectations. One day your best rep is both a hunter and a gatherer. The next day this rep is only one. And, the day after that your best rep quits–unless you have managed the change effectively.
To be continued…
Note: Â The other three posts in this series are now available and focus onÂ SaaS sales process efficiency, accelerating revenue growth, and scaling profitably.
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Joel, I’ve enjoyed and quoted your observations about the SaaS industry for a while. Your reference to the Kaizen principle and the need to apply it to sales was particularly surprising to me bec this is a concept that my company is really pushing – building a process-centric, predictable, consistent sales machine. When my CEO asked me to refer to Kaizen to explain the concept, I dug in and said not many would understand what we are saying. Reading yor blog post, I stand corrected 🙂
Essential post for the B2B SaaS Sales Teams who focus on the SMB Market. In particular Tip #2 “Building the Right Team” is an area of focus for our organization. False Starts waste critical cycles, so we put each candidate through several interviews, require a written exercise, and ask each candidate to complete several practical exercises in our platform.
We feel as though this method weeds out weak candidates, and helps us find good, hard working, smart individuals to join our Sales organization.