SaaS Marketing is different than traditional enterprise software selling and the differences vary by the type of SaaS sales model.
Regardless of whether a company sells a SaaS or on-premise solution, the goal is the same—maximize revenue and minimize the cost of acquiring customers. With a SaaS solution however, the role of marketing within the sales process changes and here is how.
Specifically, in a self-service SaaS sales model, marketing is in essence taking on the entire sales process –assuming that marketing owns the website and ecommerce. On the other end of the spectrum, while in an enterprise SaaS selling model the role of marketing is similar, there are some important differences to selling on-premise solutions.
SaaS Marketing – Sales Models
Basically, there are three types of SaaS sales models – Self Service, Transactional and Enterprise.
Self Service – in this SaaS selling model, an organization sells its SaaS offering via ecommerce. Typically there are offers like a free download, try-before-you-buy and/or freemium-to-premium models for SaaS that are at the front-end of the sales process. All of the information a potential buyer needs is found on the seller’s website. In short, the website is designed to facilitate the sales process by use of meaningful and relevant content (text, images, videos, charts and whatever other supporting material necessary) to attract and move prospects through the sales cycle. And, all engagement with the prospect (initial contact through purchase) occurs in an automated, one to many manner. Price points for self-service SaaS solutions are usually under $5K.
Transactional – this SaaS selling model is a hybrid model of self-service and enterprise selling. Some purchases can be made through ecommerce while others may require the assistance of an inside sales person or customer success manager. In short, 100% of the buying process can’t be automated in a transactional SaaS selling model and a prospect must have a verbal dialogue (on the phone or in-person) to complete a SaaS purchase. Price points for transactional SaaS solutions are usually under $50K.
Enterprise – enterprise SaaS selling is and continues to be a complex sale at a high price point. Enterprise SaaS selling requires field sales reps selling direct to customers. Many times, enterprise selling also includes an inside sales function as some deals do not require on site visits. It’s important to remember though that enterprise selling does not mean the website and online content should not be used to facilitate the purchase. It simply means that enterprise purchase decisions are usually made by a rather large group (10 – 20 individuals when one includes the decision maker, approver, recommenders and influencers). From this perspective, enterprise SaaS selling is similar to traditional software selling. Price points for enterprise SaaS SaaS solutions are usually over $50K.
SaaS Marketing – Key Differences
There are many differences between marketing an enterprise SaaS sales model and marketing and on-premise offering. With the SaaS model, the key differences for SaaS marketing are:
- Users have much more of a say in purchase decisions and often times own the budget as they are typically LOB
- Information to support the sales process has to be readily available online, in a format that prospects prefer and on a social channel that they frequent
- Onboarding is critical and needs to be methodically thought out and executed
- Support has to be killer
- Customer satisfaction determines renewals, expansion and ultimate success
- Selling organizations need to be integrated from first touch through daily customer usage
- CRM becomes critical as it provides one view of the customer for marketing, sales and service
- Customer Acquisition Cost (CAC) and the Lifetime Value (LTV) metrics are king for SaaS marketers
SaaS Marketing – Net
In general, SaaS has forced vendors to deliver on their value proposition. Gone are the days of multiple vendors patching hardware, software, networking and consulting services over time horizons spanning years and requiring huge capital expenditures. Buyers have multiple technology choices, functionality is released weekly, flexible contracts are used and customer expectations are that the vendor will make them successful on their timetable. If not, they drop the vendor and move on.
Most SaaS go to market strategies are based on a “land and expand” sales strategy. Landing is a little easier today as users often have budget, need, and are motivated to act on solutions specific to their needs. However, expanding is directly correlated to realizing the value proposition — and that is measured in terms of customer satisfaction.
SaaS companies need to focus on investing in customer-facing resources to successfully sell and onboard SaaS customers. Selling to existing customers increases sales velocity, decreases the customer acquisition cost and increases the lifetime value metric.