Selling Enterprise SaaS: What Exactly are you Selling me?
The “old” software enterprise selling model went something like this: you paint a “vision”, develop a detailed proposal for the client and sign the business, which became a relationship. The customer then slowly begins to discover what they thought they were getting, but aren’t and will have to pay more for, which is why professional services revenue was typically eight times bigger than the product licence revenue. They usually also discovered that the proposal over-promised and under-delivered, and the gap was filled by endless “change requests”, otherwise known as a licence to print money. As software sales professionals used to say: we don’t sell software, we sell mystery!
Some companies – and far too many salespeople – are trying to apply the same vision-proposal-relationship model when selling their SaaS product and it’s not working. The reason is that in the SaaS world, it’s the product that has to perform, no matter how you wrap it up in visions, states or solutions. You can’t shout your way to a SaaS product sale, like you could with old enterprise software. You are usually selling a tool – call it something more sophisticated if you want, but it’s a tool of some sort – and buyers need to see two things upfront:
1 How can you make it easy for me to decide if this tool can bring me value, before I enter into a signed contract?
2 How exactly does your pricing work?
This has big implications for companies that need to recruit B2B (and often senior) salespeople to sell corporate and enterprise SaaS. Buyers are increasingly not using traditional presentations and proposals to evaluate products, solutions and vendors. They want what might be called an Engagement Path that has a clear beginning and an end, in a fixed timeframe that helps them evaluate, test and compare products and the likely value they will get. In practice, it means we are moving away from vague trials, pointless demos and RFPs to active trial, testing and live usage. If you have one of those SaaS demos with the much-loved “dashboard analytics” screen, it might be time to re-think your approach!. Buyers are asking salespeople to answer this question: how are you going to enable me to experience the value of your product (tool) quickly and clearly?
We’re not talking here about selling product features, just in case the consultative selling people are starting to feel unwell; we’re talking about how you facilitate easy evaluation and quicker decisions by the customer, and removing the mystery and the promises. Progressive companies are therefore equipping their salespeople with tools such as :
- Live data trials, where the product is quickly commissioned using the company’s existing data.
- Proof of Concept, where the product is being used in a live (“production”) environment, sometimes by the most demanding and sceptical users.
- Product module usage i.e. where one module of the product is used by real users, for an agreed period.
Of course, you need to have a management framework underpinning and guiding these types of engagement, but they are a world away from the traditional “meet-and-propose” approach to selling.
There is also a strategic issue here for the product development people; today you are not just developing the product for long term use, you are developing it in a way that it is easy for the sales folks to sell using the product as the star.
This is not to say that the salesperson is no longer important. It means that they use a better approach to help customers decide what to do, that is more tangible and tool-based. They still need to act as advisor, discoverer, domain expert and opportunity manager, but they are not selling a dodgy vision or a dream; they are helping you experience value you probably thought was not available or possible, except in a clearer, faster way. This is good for the customers, reduces the sales cycle, creates instant preference for the best vendors, and more especially for start-ups, speeds up cash flow.