Your SaaS company has been doing well. Very well. Your churn rate is manageable, your sales cycle is short, and everything is dandy. Pat yourself on your back, light up a cigar and celebrate!
Well…without growth in your sales, your manageable churn rate will soon turn unmanageable. Nobody is going to use a single SaaS product forever, as while the industry is booming, it is due to an influx of competing companies.
Can you count how many project management SaaS products pop up every month? One can, but the point is that the SaaS industry is in a state of growth, and to keep your company’s head above water you need to grow as well.
While you may have led your team to glory in terms of mastering customer support, marketing, sales and software design, you did so with a limited customer market. So, how to expand your market and penetrate new sales territories, and in a manageable manner?
Before we get started, make sure that you of course approach expansion into a new territory with deliberation, but also excitement! Afterall, if you can and need to approach a new sales frontier, it means you have been doing something right, that your SaaS product is valued. Now you have the opportunity to grow further, and you should be thrilled that you have got something that customers want to use.
Still, you need to be careful to not get carried away, and stay in control of your sales expansion. Here’s how:
What has been working for you so far?
The first step when planning to enter new sales territory is to identify the causes for your initial success. There is not a single reason why you have cornered a market and are turning a profit – rather, SaaS success comes from a collection of practices that have gotten you where you are today.
It is important to take an inventory of what has worked, but also what hasn’t, and what your team has learned from it and adapted to in order to generate success.
Break it down
The reason to take an inventory of what has and hasn’t worked is because you should be repeating helpful practices while also learning from mistakes. This may sound elementary, but when a company is growing, and looking to expand and increase sales, it can be easily forgotten what got you there in the first place.
A CEO should never lose track of what created past and present success when seeking future success.
While taking your company’s inventory of successful practices, list the individual components of what generated decent sales for your company. Here are some of the basics of what should be investigated:
- Product development
- Inbound or outbound marketing strategies
- Sales methods
- CEO’s vision
- Hiring practices
Depending on the scale of your company there may be more or less to account for, but your assessment should be comprehensive. Meet with the heads of your departments together and go through step by step what has been working, because that is what will work for you in the future. After doing so you can approach expansion with confidence, but not so fast…
Define a single, lucrative new territory
A slice of pie is fine, but if you eat the entire pie you are going to end up with a belly ache. Entering new sales territories should not be done all at once, as you will spread your resources thin. Instead, understand which markets you have already penetrated, and which single market out of the number of those available is most valuable to enter next.
In similar fashion to how you have taken an inventory of your successful business practices, take an inventory of untapped territories and prioritize them based on the following factors:
- Amount of competition
- Amount of potential customers
- Traditional customer buying habits
- Current trends/shifts in buying habits
- Appropriateness/product suitability
Some markets may have more potential customers, but less cash available to spend on services. Some may have more cash, but thick with competition. Markets are in a constant state of flux, so it is vital to account for which markets are the most predictable for the near future before you approach them. After taking a full inventory, you will be able to prioritize with your team which new market to penetrate with laser-precision.
Assemble and prepare your team
After you and your team have selected a new market, prepare for an increased workload. The capacity at which you have been operating at was good for the past, but is it for the future? Entering new sales territory does not simply require finding and communicating with new leads, but requires company expansion across the board.
Depending on the scope of your company, you may need to take on new sales staff and marketers to adequately manage finding and closing new customers. However, for larger companies, you will also need to fortify your stock of project managers and team leaders to handle the day to day of your increased staff.
Meet with your managers, salespeople and marketers and assess their potential. Ask the following question:
Is your current team capable to take on more responsibilities?
Ideally, the answer should be yes, as penetrating a new market should be as least costly as possible. Maybe you have not been utilizing your team to their fullest potential, or maybe you have, but there is only one way to find out – ask.
Do not forget your base
It is not just about remembering how you became successful enough to celebrate entering new sales territory, but it is also about remembering who got you there to begin with. Neglecting your base while trying to enter new lands is business suicide.
As the owner of a SaaS company, your first and remaining customers are your lifeblood. Attracting new markets and such is necessary for growth, but to sustain that growth you need to rely on your core. Your core market is your core for a reason – they are your natural market. However, especially with the peril of churn creeping behind your company as you move forward, they need to be coaxed into renewing their subscriptions to your service.
This ties into the previous point of we made about assembling and preparing your team. There needs to be able bodies to support your core customer base just as there needs to be able bodies on the frontlines during expansion.
If you are adding new sales, marketing and customer support staff, pay close attention to whether the newbies or the veterans are more suited to enter new markets. On one hand, the veterans know their practice well, and may have the skill set to propel your business further. On the other, they may have developed personal relationships with particular core territories and invaluable for your business to be reassigned.
Factor in how vital or not the personal relationships your senior team members are to working with your core, and whether or not a new hire can fill their shoes or should be assigned to take on the new turf.
Never forget the power of referrals
Referred leads are not just some of the reliable avenues for gaining long-term customers, but also are a valuable means for discovering new markets that your SaaS is capable of entering. 84% of B2B purchases are made at behest of a referral.
First, if you do not have a referral strategy in place, well, we are surprised you are reading this in the first place, and second, develop one. It is how many SaaS companies have built empires out of even unsexy products. Why not have your customers do your marketing for you?
For those of you that have referral strategies, let us ask how well are you using them to break into new markets for your company? Take yourself for example: it is likely that you have a lot of friends and acquaintances that you have made while working in your industry, and would likely refer them to use a service you use if you were incentivized. That being said, you also have friends and family that are outside of your business sphere, and would also refer them if incentivized to do so.
Not everyone you referred from outside your business sphere would of course use the service, but there would be some unexpected, valuable biters for the company.
Use your referrals to identify potential new territories. For example, have a system in place that asks for referred leads select the industry that they work in, their geographic location, etc. By tracking referred leads’ demographical data, you can help determine which territories are the ripest to enter.
Enjoy your new territory
Entering new territory is no doubt an exciting time for any SaaS company, but it is also a challenging, trying time. That being said, after reading this guide you know the methodology to discover fresh pastures of sales success, and stay in control of your company while forging ahead.
If you have had any success stories or additional lessons learned, share them below in the comments. We always love to hear from fellow explorers.