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Top 10 Resources To Help You Manage Your SaaS Sales Like a Genius

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Do you want to grow your SaaS sales team and improve your processes? Here is  a collection of 10 resources that will help you: 

 

  1. maintain healthy atmosphere in your Smarketing team,
  2. make smart choices regarding your SaaS sales model, strategy, pricing, 
  3. build smoother connections both with your prospects through optimized sales process.
  4. better understand Inbound, and learn about major tactics that you can implement,
  5. master your SaaS pricing page and increase your conversions. (We know, sounds promising!)

 

If you look through the contents, you will notice that we cover pretty much all important aspects related to SaaS sales. From sales & marketing alignment to SaaS salespeople compensation. And from SaaS sales models to SaaS pricing. (Did we miss anything? Hopefully, no. 

 

You can still contact us via our live chat or contact us page if there is still anything that keeps you awake at nights.

 

If you are satisfied with your sales model and need to learn about employee compensation model, just skip the first article.

 

Take as much as you can from this collection. The more you learn, the happier we are.

 

P.S. Our collection is rich in screenshots, bullet points, examples, statistics. Hope you will enjoy your time reading it.

 

TABLE OF CONTENTS

 

SaaS Sales Models

  1. Do you you know 3 most popular SaaS sales models? Choose the right one for your SaaS startup

  2. Which SaaS sales model to choose for your company? (3 examples for you)

 

Skills for SaaS Sales Team

  1. 6 Essential skills for SaaS inside sales team to boost product’s sales. (and how CEO’s can measure these)

 

SaaS Sales team compensation 

  1. What’s the typical commission for SaaS salesperson? [Really 10%?]

 

SaaS sales & marketing alignment 

  1. Inbound sales methodology: What it is and how it works with inbound marketing

  2. How marketing and sales synergy model works for SaaS companies

 

SaaS Sales Strategy

 
  1. Do you also ignore these 5 sales strategies like most of the SaaS CEO’s do?

 

  1. 8 Smart tactics for your SaaS customer acquisition strategy

  2.  

SaaS Pricing

 
  1. What are the most successful SaaS pricing models and what you may be doing wrong

  2. How to optimize your SaaS pricing page? (Best Practices + Examples)

     

     

     

  3.  
  4. YOU KNOW 3 MOST POPULAR SAAS SALES MODELS? CHOOSE THE RIGHT ONE FOR YOUR SAAS STARTUP

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Your startup has finally landed on its feet, but something still seems off?

 

No wonder, since the SaaS industry is expected to reach a whopping $157 billion by the end of 2020. The cloud application service market remains a huge challenge for all newcomers. A question may arise, what is sales model and what’s the difference between it and sales process. Well, we will keep it short and simple and let you know that sales process is how your prospects become your customers (from awareness to decision making stages). While sales model is your company’s fundamental approach to sales. 

 

We’ll introduce you the three main SaaS sales models and share some tips on how to choose and what challenges to expect.

 

1. Self-Service

 

When you’re looking to generate significant revenue as a newbie in the SaaS market, your product prices shouldn’t go above $5000.

In fact, recommended prices for the self-service model are in between $1 and $1000, since that’s how much your target audience is ready to pay. The self-service sales model is thus all about low-priced products accompanied by a fully automated customer journey. Most commonly, startups that employ it sell their products completely via ecommerce, so that they can remain focused on quality of the product and design.

 

Focus: Product and Customer Journey

 

In order for this model to work, both your product and your customer acquisition strategy need to be absolutely frictionless. The product itself should be developed with single user persona or small teams in mind, while every touch point between the potential customer and the actual purchase should be lean and optimized for self-service. The same goes for the website, customer support, and user onboarding.

With such low SaaS product prices, you should be more careful with your large investments in lead generation and control your resources even more effectively.That means that the customer experience you provide should be streamlined and infallible enough to generate leads and convert customers on its own.

If you have decided to be more economical with your marketing as well, a viral message or an outstanding content marketing campaign can help you a great deal.

 

2. Transactional

 

Being a hybrid between self-service and enterprise, the transactional sales model requires a product that’s more expensive than $1000 and a provenly efficient lead generation strategy. Typically, the price point for this model is can reach up to tens of thousands of dollars not higher than $3000. The product price is not the main difference between these models, though.

When compared to those that employ the self-service model, SaaS companies with a transactional sales model offer expert customer onboarding as well, in addition to an automated ecommerce site.

 

Focus: Customer Onboarding and Face-to-Face Conversion

 

Thanks to the higher priced products, SaaS startups that choose the transactional model have more money to spend on customer acquisition. This means that such companies are product-oriented as well, but also include a small inside account management team to help them catch and convert by providing real-time assistance during the software purchase process.

That way, potential customers can browse the website and make a decision on the spot, but they must reach out to a company’s dedicated account manager or a sales engineer one-on-one face-to-face in order to complete the purchase.

The transactional model will suit your goals if the target audience you’re addressing is comprised of medium-sized and large businesses, and if the product you’re trying to sell has a high revenue expansion potential (if a customer is likely to pay more and more over time).

 

3. Enterprise

 

With this sales model, a SaaS service provider can earn more than $100,000 per year for a product, but only as long as the company is equipped to meet all the requirements of enterprise B2B sales. By definition, this includes a number of things, all equally important for making this model work. First, both the product itself and the customer service that comes along should be enterprise grade. Then, your company’s sales team should be skillful and experienced enough to handle the delicate, long-cycle sales process that’s usually associated with enterprise B2B sales.

 

Focus: B2B Enterprise Sales

 

Selling to enterprises is never easy, simply because these businesses have longer decision making time, and sometimes not until a majority of board members feel confident enough to give their vote. As salespeople have a whole lot of work to do, it’s easy to understand why they have to be nothing but experts in their niche.

It’s also the reason why SaaS companies that employ the enterprise sales model have to be able to rely on both in-house and field sales reps, which doesn’t come cheap.

 

On top of that, dealing with high-class clients means that your company’s website content and customer service should be spot-on as well. For startups that are still making their way, the enterprise model is for all of these reasons considered to be too expensive and risky.

How to Choose the Best Sales Model for Your SaaS Company?

 

With the enterprise sales model being so unsuitable for self funded SaaS startups, your decision should fall somewhere in between the self-service and the traditional model if you don’t plan any.

 

Schedule a free consultation 

WHICH SAAS SALES MODEL TO CHOOSE FOR YOUR COMPANY? (3 EXAMPLES FOR YOU)

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For a SaaS company (and almost any business), both success and failure depend on decisions that founders make: team members, target groups, product functionality, and of course business model. In his “SaaS Sales Models: Strategic and Organizational Choices” report, Joel York said that choosing the right software sales model would help SaaS companies to smoothly grow from seed funding to A route to B round and beyond. Choosing the right model can set your business in the success path and choosing the wrong model can leave your SaaS company with nothing.

 

There is no single “right way”

 

If you are walking down the right path and you are willing to keep walking, then eventually you will make progress. However, this does not mean that there is only one path to success for SaaS companies. 

 

According to Jeffrey M. Kaplan, one of the most commonly accepted myths of the SaaS industry is that it is inherently a high-transaction business. This view has been fostered by the rapid growth of many commodity-oriented SaaS companies and public cloud services. 

 

However, just as the overall technology and software industries have different paths to success, so are the SaaS and cloud-computing segments evolving in a variety of directions, requiring different sales techniques and models.

 

As an example, Kaplan mentions Passkey, a SaaS company that provides group-reservation systems to major international hotel chains. While the majority of SaaS companies offer free online trials in order to win leads and customers, Passkey starts at the top of the corporate level, catering directly to CEOs.  

 

This is a unique SaaS sales model and the benefits are stark. Besides selling a high-priced SaaS software, Passkey also makes multi-year deals that can be worth millions of dollars. Even more surprisingly, Passkey is able to convince its customers to pay for their multiyear contracts upfront. Though It may be challenging and difficult for many SaaS companies to operate like Passkey, to charge high prices and target large, established corporations, it could perhaps be exactly what your SaaS software requires.

 

This example shows that there is no one right way in SaaS sales models. It is important to have an open mind and make sure that you have considered all the options, rather than going straight for a high-transaction model.

Picking the ideal software sales model

In general, there are three main software sales models: customer-self service, transactional and enterprise. While mature SaaS companies may employ all of the three models, a SaaS startup will likely only have the resources to master one of them at first.

So, which one is the best choice for your SaaS company? Let’s go deeper in each of the models.

 

1. Customer Self-Service sales model

 

The customer self-service SaaS sales model is also known as the higher-volume, lower-price method. It is a model that is designed to achieve significant revenue at a low average selling price (ASP) with the help of free trials and freemium offers.

 

Achieving substantial revenue at a low price means removing complexity and cost from the purchase, in order to prepare a ground for high volume. Complete customer self-service can be the ideal sales model, but in this case, customers need to be able or willing to serve themselves, understand the value of the products themselves, including things like purchase, use, support, etc. However, even if your product is so simple that it can provide a 100% self-service purchase, you can never get away with 100% self-service support, as your customers need you in order to solve their problems, or you risk ruining your brand image and reputation.

 

The customer self-service SaaS sales model typically breaks down across customer-facing functions in the following way:

 

  • Sales: None.
  • Marketing: Full responsibility for the revenue, for creation of awareness, educational content and automation capable of driving business through the entire purchase process from awareness to close.
  • Support: Provides automation and tools for easy on-boarding; provides templates and educational content that lets customers to resolve any issue that they may experience.

The customer self-service model is used by companies like Dropbox, Zoho, Yammer, Basecamp, whose customers are single users or small teams which are acquired through the company’s’ online platforms.

 

2. Transactional sales model

 

The transactional sales model is a scalable one, with solutions that are typically sold over the phone or messaging service to medium-sized or large companies.

 

As pricing for certain SaaS products increases, customers become less willing to spend their money without at least knowing that there are real live, actual trustworthy human beings behind the company’s website URL. Higher average selling prices bring higher expectations for these business relationships, such as signed contracts, premium service-level agreements, invoicing and the ability to speak to a staff member whenever problems arise.

 

The risk-driven needs for a more interpersonal business relationship drives the SaaS sales model away from customer self-service into a transactional sales model, which is characterized by efficient, high volume sales and support operations, short sales cycles, and rapid onboarding. Some SaaS companies that make use of the transactional sales model include Marketo,  Zendesk, and Xignite.

 

The transactional SaaS sales model typically breaks down across customer-facing functions in the following way:

  • Sales: Sales representatives are supported by online content, automation, necessary tools, training, incentives and other metrics that enable higher efficiency and many transactions per sales representative.
  • Marketing: The marketing team feeds highly qualified leads to the sales team in order to build the sales pipeline. The marketing team improves efficiency by removing possible roadblocks with the help of educational content and automation that drive complexity out of the purchase.
  • Support: Support representatives must meet a range of SLAs from limited pre-sale support, through premium post-sale support with tools, training and metrics that enable high efficiency and many transactions per support representative, complemented by customer self-service tools, templates and educational content.

 

If your SaaS product is suited for it, the transactional method can deliver to your company the best of both worlds in terms of customer communication during the sales, marketing and customer stages for highly desirable, highly useful yet pricey SaaS products. For mid to high-level SaaS agencies who would like to choose the right SaaS sales model for their company, transactional sales model is the right decision.  

 

3. Enterprise Sales

While most of the SaaS companies out there today gravitate toward transactional sales or customer self-service, some SaaS startups have products that provide so much value per customer and are so complex to implement and master that their natural starting point is traditional enterprise sales.

 

The enterprise sales SaaS model is also known as the lower-volume, higher-price method, as it focuses on providing sophisticated, cutting-edge solutions that justify their high price tag. SaaS companies that make use of this model have exceptionally well trained sales teams, who can explain the product’s concept in depth in order to show the customer why such a high outlay is expected on their path. They have an intimate knowledge of the software, and can explain all that it can do, demonstrating its entire value to the user.

 

Two good examples of product categories that this model is suited for are cutting-edge Internet marketing tools, that are employed by brand consumer marketers such as BazaarVoice and BrightEdge, and feature-rich suites that automate strategic, core business processes for mid-to-large enterprises, such as Netsuite, Workday or Passkey.  

 

The enterprise SaaS sales model typically breaks down across customer-facing functions in the following way:

  • Sales: Sales reps are focused on a narrow set of target prospects and they are directly supported by product marketing and sales engineering resources at the deal level.
  • Marketing: In this model, high-end marketing that facilitates brand awareness, education and trust-building is used. It is then supported by the sales team, including telemarketing spending to target prospects and detailed marketing tools such as product roadmaps, ROI calculators and so on.
  • Support: Highly engaging support up to on-site issue resolution is used, which is complemented by educational tools and training tailored to the specific needs of individual customers.

 

Customer self-service, transactional, or enterprise – choose your software sales model wisely…

Choosing the right SaaS sales model for your SaaS company is a make or break decision. Choose the right model and you will grow smoothly; choose the wrong model and you will end up having horrible sales results. The guide mentioned above is a simple but powerful strategic framework, one that hopefully can answer questions like how to choose the right software sales model for my SaaS company.  

6 ESSENTIAL SKILLS FOR SAAS INSIDE SALES TEAM TO BOOST PRODUCT’S SALES. (AND HOW CEO’S CAN MEASURE THESE)

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In the world of SaaS, there is a common belief that great products sell themselves. While this is true to some extent (and there are a few very vivid examples of such cases like DropBox), a skilled sales team still plays a very significant role when it comes to growing the business. Your SaaS company may be able to achieve fast growth with the help of enthusiastic early adopters at early stages, but at some point, your inside sales team will need to assist in closing more deals.

 

Sales and marketing teams are there to show potential customers how innovative and valuable your SaaS product is and, as a result, to boost the product’s sales. The best SaaS sales teams are able to do this with ease, yet, such teams are few and far between. For the success of your SaaS company, you need to have the right inside sales team. Here are the six essential skills for SaaS inside sales teams to boost product’s sales.

 

1. Being tech-savvy

 

Any sales rep selling a SaaS product must be comfortable with both using and discussing technology. Though traditional sales teams usually have an understanding of only their product, this cannot be the case with SaaS. Besides the technical aspects of the products, software sales reps should also know how it fits in with and complements other technology in a business’ software stack.

 

In other words, besides their industry’s specifications, SaaS sales teams need to also pay attention to the general technology trends and development. A good sales team needs to be technologically fluent, easily understand/adapt to new technology and learn to use it quickly. The reason is because high-performing sales teams are the first to embrace technology:

 

2. Understanding the value of the SaaS product

 

It does not only matter how innovative your product is, because there will still be many people who don’t fully understand the value of your offer at first. Many people will believe that they are fine with managing their current workflow, and they don’t need your SaaS software for better effectiveness. Potential customers often either do not have the budget or don’t see a need for changing the status quo. This is where your software sales team should come in.

 

Qualified SaaS sales teams should be able to easily present the value of your product and fully understand how it can revolutionize companies from within. A great sales rep will be able to easily prove the high ROI of a SaaS product and convince prospects that they will lose out on a huge opportunity if they do not make use of the software. Good sales teams know that a powerful value proposition is the key to success for SaaS products.

 

3. Knowing customers inside and out

 

Naturally, analysing and understanding the ideal buyer persona is a must for any sales team, but it’s much more important in the SaaS industry than most others. The reason is that in traditional sales, in order to hit the monthly quota, reps might be able to sell their product to a customer who is not exactly the right fit. However, in SaaS, sales teams might actually hurt the business if they close a deal with the wrong customer. Those customers who don’t truly need the SaaS product are likely to waste the resources and investment the company makes while onboarding them.

 

Qualified sales teams clearly know who are their potential customers. If the prospect is not the right fit, sales teams should be able to quickly disqualify them and shut down the sales process before it goes too far.

 

4. Customer centricity

 

The key word in SaaS is not “software” but “service”. The main difference between traditional software vendors and SaaS companies is that instead of just selling a tangible piece of software, SaaS companies provide services, assist their customers in implementation and usage of the product, etc. According to Mike Arenth, former executive vice president of customer success at Ariba, “The difference between selling SaaS and traditional enterprise software is that with SaaS you are selling an outcome to your clients instead of just selling them the tools to get to the outcome themselves.”

 

Being customer-focused for a sales team means that each of the reps should clearly understand what their customers are hoping to achieve and how they can help them deploy the product for maximum effectiveness. Selling SaaS is not a one time deal. SaaS sales teams should maintain close customer relationships over the long term and act as a consultant for their products. 

 

5. Data mastering

 

The SaaS model gives sales teams the opportunity to implement and use data analytics to gain direct insight into how their clients use their product, what works, what difficulties there are and what efforts should be done in order to maximize their customers’ long-term value. A good sales team should have data mastering skills in order to take advantage of this.

 

Data analytics allow sales reps to pinpoint any problems, highlight successes and adjust their strategy accordingly. It is known that high-performing sales teams are 3.5 times more likely to use sales analytics than underperforming teams. So, companies who are hoping to advance their SaaS offering need to be sure that they have an inside sales team, whose reps are experienced in data analytics.

Companies striving to advance their SaaS offering need to be sure they find an executive who is experienced in data analytics.

 

6. Strong networking skills

 

In today’s SaaS companies the traditional traveling sales reps don’t exist. Because most SaaS companies focus on inside sales teams, there are many situations where reps need to call and email prospects daily. Very often, sales teams need to close deals without even meeting with the prospect in person. This means that sales reps need to have robust communication and networking skills in order to build strong interpersonal relationships using just email, phone calls and/or video chats.

Qualified sales reps have great written and spoken communication skills and understand the inside sales challenges very thoroughly. The best sales teams are able to engage prospects through email and phone calls, just as well as traditional reps close deals with customers in person.

The following are the most essential skills for SaaS inside sales team to boost their product’s sales. To make sure that your sales reps master these skills, CEOs need to continuously measure them and see whether their product’s sales increase thanks to the sales team. Here are four ways to do so:

  • Measure the speed of deals through the pipeline

This is all about the average time that it takes to close a deal. Let’s see the comparison of two salespeople in order to see why this is useful:

 

Let’s say that John closes deals in 6 weeks on average and Kate does it in 3 weeks on average. At this point, we can see that they must have huge differences in their communication skills and work methods. Based on these numbers, we can see that John does not have the habit of gaining small agreements during the sales process. Velocity is low, because John is always hunting for the “big yes”. Therefore, we can infer that Kate continuously uses confirmations and checks in order to see if even a small buying decision has been made by the prospect.

 

Deal velocity should increase over time and higher velocity means that the sales team is more skilled and experienced. Here is the formula for sales velocity:

  • Measure the size of a sale

Like deal velocity, the average size of deals should also increase over time. Average sale size is an excellent indicator of the sales team’s negotiation and communication skills. This measurement can show how good a sales rep is at finding out the real needs and preferences of prospects, and matching them to more premium products.

  • Measure the number of leads

Probably the clearest way CEOs can measure the skills of SaaS inside sales teams is by measuring the number of leads in the pipeline during a specific time period. If the number of new leads is low, this means that either the sales team is not very good at initiating first contact or they simply don’t put much effort into it.

An increasing number of sales can speak volumes about the skills and work ethic of the sales team and is a good indicator of sales success.

  • Measure total win conversion and conversion by stage

Most CEOs measure win ratio and in this case as well, the information is much more useful if you look at it by sales stage. For example, if Kate has a 70% conversion from the “first meeting” to “proposal” stage and John has 35% conversion, this probably means one of the following two things: either Kate is much better at turning the prospect’s needs into identifiable “pain” or John wastes time with hopeless cases. This is why you always need to look at this metric by comparing one sales rep to another.

We are done here, as we have the six essential skills for SaaS inside sales team to boost your SaaS product sales, along with four ways CEOs can measure the success of the sales team. If you have other points on your mind that you would like to add, please share them with us.

 

  1. WHAT’S THE TYPICAL COMMISSION RATE FOR SAAS SALESPERSON? [REALLY 10%?]

     

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Asking “what’s the typical commission for SaaS salesperson?” is like asking “how expensive should I price my SaaS product?” or “how long should I spend on developing my software?”. 

To answer your questions correctly, we need to ask for clarification and more details about your software, its complexity and company goals. 

If you search on Google, Youtube or Quora, answers will tell you that 7%, 9%, 10% or more is the common approach. Since we don’t want to repeat the same statistics, we will show you how you can find the perfect answer. How? We will write about:

  1. common software sales comp plans,
  2. some rules you’d rather follow when working on your remuneration structure,
  3. what factors to consider before defining your SaaS sales commission percentage.

In the end, a bonus section is waiting for you! We will share 8 ideas on how to increase your sales team’s productivity and help them close more deals.

What are 5 common software sales compensation models? See below!

No base salary, commission only

 

Pros: This model is great especially if you are a startup. Mainly because you don’t get much funding (or at all) and can pay your sales reps only when they bring you paying users. Besides, your startup doesn’t have to pay taxes for commission-based only employees and offer benefits. For your sales team members, this approach may be beneficial because they are more independent and working schedule is flexible. The harder and smarter they work, the larger their commission check will be.

Cons: For your recruiter, finding contractors who are a good fit will be more difficult. The reason is that commission-only position doesn’t guarantee a fixed financial compensation at the end of each month. Consequently, only a small group of jobseekers will agree upon facing this risk. While talking to your prospects, they will try to close the deal immediately to make money, forgetting to qualify the prospect and asking some essential questions. One more thing. You have to pay higher commission rates than if you offered base salary too.

 

Base salary + commission

Pros: You will offer your salesperson a certain amount in advance and know how to plan your expenses. Your sales reps will feel more confident and secure. Because they aren’t starting out the month from $0, and new deals will add more financial resources to their already existing salary.

Cons: Base salaries are sometimes small numbers. And often they don’t attract experienced salespeople. If you increase the fixed salary, it will force you to lower the commission rates. This plan will suit you if your growth is stable and predictable and you can offer decent base pay.

 

Profit-based commission

Pros: Any company would like this idea. You exclude development, support, marketing and other costs and pay commission only based on the amount of net revenue. Your sales reps should learn how not to make discounts and how to close more expensive deals. 

Cons: You’d like to go for this approach but we should understand that your profit will be a considerably lower amount than the actual deal size. However, if your sales team is closing 5-6-figure deals or your operational costs are low, your employees will definitely support your approach. 

 

Tiered commission 

In this case, you offer X% commission if your sales team doesn’t exceed the quota and increase commission rate when they exceed. When they outperform, you reward them more generously.

Pros: With this way of compensating, you reward high-performing sales reps when they show they can do more for you! When they exceed monthly or quarterly quota, you pay them higher commission rates. For example, your salesperson will get 11% if he reaches $50,000 monthly, and will get 13% of every deal he will close after it. 

Cons: Hard to find major drawbacks for this approach. The main thing you should consider is to know how to set initial and further rates wisely not to hurt your company budget and not to hurt your team members’ success either. 

 

Residual commission

This one is less common in the SaaS industry but in general is considered by subscription based service providers. You pay your salesperson when your existing users don’t churn and renew their subscription. 

Pros: Thus, you motivate your employees retain your users and provide high-quality customer service. You can do that if sales team is actively included in customer retention process and contributes to customer success.

Cons: If your marketing and success teams are dealing with retaining customers, rewarding your sales reps becomes a non sense. You do pay them for the initial deal and retention is another department’s job. Multitasking will and adding multiple KPIs for your closers will not help them be more effective. Moreover, it can hurt their daily productivity and make them fail on all fronts.

 

Wait! You aren’t going anywhere without these 6 golden rules

 

No matter which SaaS sales compensation structure you will go for, here are 6 rules that will help you make smarter decisions. These principles are industry norms and if you follow them, you won’t get into trouble.

  1. Salesperson salary = 50% base + 50% commission – Especially if you are a startup, you can follow this principle which is common among SaaS companies. For example, your sales rep’s base salary is $20,000 and you offer him additional $20,000 if he drives $200,000 in revenue.
  2. Commissions are valid only for bringing new subscribers – Have you seen SaaS companies who offer LTV-based commission? That’s not about being wrong, that’s more about being unfair. Here’s why. Sales team’s responsibility is to bring new customers. New and expensive customers. Marketing and customer success teams are in charge for retention. So if you think of compensating anyone for preventing churn, you already know who to reward. 
  3. Quotas should be 5x the OTE (On Target Earnings) – In case you wonder, OTE is your sale’s reps base salary + expected bonus if he exceeds the quota. In other words, it’s your sales rep’s full salary. So for example, if your team member’s base salary is $1,500 and you offer additional $1,500 monthly, his quota should be at least $15,000. Your sales rep will receive a 10% commission which is a good number. 
  4. Avoid discounts – If you don’t want to look unconfident and strive to show the actual value of your software, don’t include discounts in your strategy. Your sales reps also should acknowledge that lower-price deals affect their commission size too. Sales teams in SaaS companies mainly work with large companies for whom 10 or 15% percent discount doesn’t make much sense. All they want is a working product. 
  5. If your salesperson generated an expansion revenue, calculate commission based on the added price – For example, the initial deal size was $10,000 and now your user is going to pay $14,000. You have already paid your sales rep for the initial deal, so this time you should calculate X% of $4,000, not the whole amount. 
  6. Pay your sales team when you get paid – Contracts that you sign with your sales reps should contain information about this process. Usually, you arrange the payment within 30 days after receiving cash from the customer. What if the customer withdraws and changes his decision? 

Now, it’s time for you to make a decision. Let’s move to our next section.

 

-How to discover the ideal SaaS sales compensation percentage?
-Take into account the 7 things mentioned below.

 

  1. What’s the typical rate in your country / worldwide for SaaS companies like you – You should follow this approach mainly for comparison purposes and what you find out shouldn’t be your final guide. Salaries in the USA or Canada, for example may be quite higher than in South America or Europe. And even companies in your own country may work with different SaaS sales compensation models. At least, this research can help you refine your remuneration model and give you some precious insights. According to numbers in HubSpot’s guide, average base pay for SaaS sales reps is between $34,613-$53,000.
  2. What’s your net revenue – You pay not only your sales reps but your engineers, marketing and support specialists too (you hire at least these professionals). Depending on what prices you set and how much revenue you are expecting to generate, you will know what’s the most reasonable commission rate to offer.
  3. Whether it’s one, two or multi-year contract – The longer the period that a customer wants to work with you, the higher your sales rep’s remuneration should be. Because you acquire a user who will be committed to your company and finding this kind of clients is always harder. 
  4. Whether cash is paid upfront or no – Receiving cash in advance means you can manage your financial resources more easily and plan major your expenses. In this case, your sales reps deserve higher compensation than if the user paid monthly. 
  5. Whether you set quotas monthly or quarterly – If your sales cycle is less 45 days, monthly option will work well. But if it is less than 90 days, quarterly option is more reasonable. 10% commission rate is good if you set monthly quotas. But in case of quarterly, it’s definitely a small number.
  6. Whether your sales reps exceed the quota or not – Say your sales team will receive 9% of revenue, in case they hit the quota. When they start closing more deals after reaching your target number, you can share with them 11% of revenue they will generate. 
  7. Whether your team closes “special” customers – As a service provider, you might have a list of companies with whom you’d like to work with. They can be both world-famous companies and businesses that are well-known in your industry. Or you might want your sales reps generate sales not from your CRM database, but tactics like cold emailing and cold calling too. And once they bring customers from these channels, you can offer a higher commission rate.

 

8 steps towards creating a high-performing SaaS sales team

 

Here’s is the final section we have prepared for you. Let’s see how you can help your employees and earn more.

  1. Give your sales team time to master your software usage – Only communication, asking the right questions and diagnosing the prospect isn’t enough. Words play a significant role but … you are selling SaaS and your salesperson should know your product like the back of his hand. Even better. As customer-centric “doctors” who want to discover the patients’ problems, they should know whether your software solves prospect’s issues. And if yes, then how. Otherwise, your prospects aren’t going to convert into paying users at all or will walk away from you after a short period. 
  2. Teach your sales reps marketing – Every  day your salespeople have face-to-face meetings with potential clients. They definitely excel at personal communication and know how to address prospect’s weak spots. Make sure they know your buyer personas and buyer’s journey as good as your marketing team. Because wrong customers exist, and your salespeople should avoid closing them at all costs.
  3. Align sales and marketing teams – We are not about reviewing their responsibilities. We are about encouraging them to cooperate and share thoughts. For example, digital marketers can ask salespeople which kind of content brings the most qualified leads and high-paying customers. Based on real-time answers, your digital marketing team can prioritize their tasks and create better offers.
  4. Make a stronger sales staff with a training plan – Do you only rely on your salespeople’s knowledge or there are things you’d like all of them to know? That’s true, personal experience is second to none but your company, software, prospects are unique. And there are certain techniques, rules, principles you’d like your sales team to know. Your sales manager should be responsible for designing a plan that will benefit both the company and its closers.
  5. Let your sales reps choose their reward – Money is not the only way to thank and remunerate your team. Instead of guessing what advantages they will appreciate, ask them. One of your closers may be fond of travelling, another one – sports, the other one would like to attend a professional conference abroad. Trying to achieve their passion will become a great source of motivation, positive mood, and productivity.
  6. Help them grow with constructive feedback – Your sales rep’s success is your company’s success. When they fail to hit the quota, when they are losing, you suffer too. Instead of blaming, try to find the reasons behind their failure, evaluate their performance even if everything looks pretty good and voice the mistakes you wouldn’t like to see in their conversations. That will help you work with a better team and better train newcomers in the future. 
  7. Set challenges, make their workday exciting – As salespeople love winning, they love facing challenges too. Confess that sales process sometimes is like a game: whether you lose or acquire. Promise your sales reps a larger compensation if they close a deal with a Fortune 500 company. Or if they close annual or biannual subscription package with upfront payment. 
  8. Increase commission rate once they exceed the quota – This approach works. Imagine your sales reps have performed the way you were expecting. They completed their monthly/quarterly task, you met your goals, time to set new rules with new and higher commission rates. 

 

Summing up

We tried to guide you throughout the whole SaaS sales compensation process, told what rules you should follow and what factors you’d like to consider. Research others’ experience and compensation policy but your final decision should be based on your company’s uniqueness.   

You should take care of your SaaS salespeople because they close actual deals and drive revenue. How to do that decently? Reveal the nuances with us.

For more info watch this video on Youtube 

 

 

Schedule a free consultation 

 

INBOUND SALES METHODOLOGY: WHAT IT IS AND HOW IT WORKS WITH INBOUND MARKETING

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Marketing used to be all about cold calls, trade shows, email list buying and other activities that people would deem spam-worthy in today’s day and age. However, today we have access to inbound marketing, which is better catered to the individual buyer than the mass marketing methodology that we once considered a best practice. 

What is Inbound Sales Methodology?

Let’s think about it this way: when salesmen are cold calling a lead, is it because a lead has expressed that they need your product or are your salesmen making an assumption? The core concept of inbound sales methodology is that it encourages buyers to give that information to you, so you don’t have to make assumptions or persuade them.

By puzzling out the buyer’s actions during the inbound marketing process, smart inbound salesmen craft a sales approach personalized to the buyer’s interests.

To define the sales philosophy in a single sentence – inbound sales transforms the sales process to match the way people buy, not the way that a product is sold.

The two philosophies that drive inbound sales methodology are:

  1. Inbound salespeople base their entire sales strategy on the buyer rather than the seller
  2. Inbound salespeople personalize the entire sales experience to the buyer’s context

These two concepts can create a competitive advantage for your company and are enough in order to create an experience that your buyers will love.

In order to help your company begin the transition to inbound sales, here we present the new inbound sales methodology provided by HubSpot. The main four stages of the inbound sales methodology are:

  1. Identify
  2. Connect
  3. Explore
  4. Advise

Below we will go deeper into each of them.

 

1. Identify

 

In this stage, the process of researching and identifying those leads that are active in the buyer’s journey begins. Here, salespeople need to make use of all of the resources and clues available in order to get valuable information. These clues might be found in blog posts, forums, tweets, LinkedIn groups, etc. Such activities help salespeople identify the active buyers and make it easier for them to position themselves as leaders in their industry. Check out this useful guide by HubSpot that makes it easier to identify active buyers over passive buyers.

Inbound sales methodology is all about basing the entire sales process on the buyer’s journey and personalizing the sales experience to suit the buyer’s context. Here are some tips to start implementing the ‘identify’ stage of inbound sales methodology:

  • Make sure to constantly read blogs in your target industries and comment on new articles
  • Monitor and join LinkedIn groups of your industry. Look for conversations about your niche and provide comments that would add value for your prospects
  • Follow thought leaders of your industry on Twitter and other social media channels, share interesting comments, posts, etc.
  • Submit guest articles to company blogs or industry publications

 

2. Connect

 

The second stage of inbound sales methodology is all about starting conversations around the buyer’s pain points, plans, goals and challenges. The best way is to lead with a message that is personalized to the buyer’s industry, professional role, interests or common connections. In this stage, inbound salesmen need to build trust with buyers by identifying their interests and priorities, and then demonstrating a genuine interest in helping them. Here is an awesome article that will help in finding customer’s pain points.

If your salespeople can assist and help your prospects in solving their problems, then they will become qualified leads. What your prospects access and request will help your salespeople understand what kind of content they need to provide them.

 

There are  three definitive steps for setting up the ‘connect’ strategy:

  1. 1. Define your personas – focus on the perspectives of each persona at the awareness stage of the buyer’s journey
  2. Define the sequences for each person – define an outreach strategy based on the methods you will use to reach out to each persona, what time will you do this, and if you don’t connect the first time, how many times will you continue to reach out before giving up?
  3. Define the outreach content for each sequence – keep the second step of the inbound philosophy in mind. Personalize the entire sales experience to the buyer’s needs.

Below are some best practices for defining your outreach content:

  • Make use of your existing content
  • Keep the outreach communication short but sweet
  • Mention the buyer at least twice as much as you mention yourself
  • Pay attention to email subject lines, that they get right to the heart of the buyer’s pain points
  • End your emails with questions that you plan to answer with your product/service
  • Show a helpful and humanistic approach

By providing value during the ‘connect’ stage, insightful information from the lead will be received and your salespeople will be able to transition a qualified lead to the ‘explore’ stage.

 

3. Explore

 

This is the stage where your salesmen start to truly understand how they are going to help your prospects. It is a vital stage of inbound sales because it allows you to continue to craft a buyer’s experience and strengthen your position as a valuable resource that can potentially solve their problems.

The ‘explore’ stage begins when the buyer expresses interest, which gives you the chance to develop additional trust and uncover deep buyer goals through a conversation. You need to leverage the buyer’s initial interest and use your credibility as a thought leader to uncover the buyer’s specific goals and challenges.

As a professional company, your inbound salesmen need to show buyers that they are able to help them more efficiently and thoroughly than they could on their own, without your company’s product.

 

4. Advise

 

A modern buyer needs to understand how your products/services connect directly to their challenges and how they can help them. On the other hand, salespeople need to make the necessary transformation to position themselves as trusted advisors. Here are some tips for salespeople who want to become trusted advisors for their prospects.

 

The new role of inbound sales people is to develop trust by creating a plan based on the buyer’s timeline and their objectives/goals.

 

Here are the basic steps your company needs to take during the ‘advise’ stage:

  • Suggest ways the prospect can achieve his/her goals and overcome the main challenges that he/she faces
  • Recap your exploratory call
  • Confirm budget, decision-making processes and timeline
  • Secure buyer commitment

The most important part of this stage is to provide specific, customized advice to the prospects in order to show that you really care about them.

 

Both inbound marketing and sales share a common thread: instead of interrupting and trying to convince potential customers, these methodologies advise and educate prospects until they are ready to buy whatever the company sells.

 

Inbound marketing starts the process. Inbound marketing ensures that your business is found when potential customers are looking for similar products and services. It does not matter whether it is via search engines, social media, relevant websites, mobile devices or referrals. When people express interest in what you are offering, you need to be there for them with personalized assistance for their persona.

 

This help takes the form of educational content that is created specifically for your buyers. The content is used to convert an anonymous searcher into an identified contact. Once a person expresses any level of interest in your business, it becomes possible to use nurturing tactics, like email marketing and social media, to continue the conversation.

 

If this is done properly, your contacts will reach out to you and ask for even more information, converting themselves from an unqualified contact into a prospect. We commonly refer to these prospects as marketing-qualified leads. This is where your inbound sales efforts need to kick into high gear.

 

Now, when your salespeople have the lead, you need to do everything in order to keep them. So, instead of just selling and convincing, your salespeople need to continue the educational experience. Make it a personal, one-to-one experience. Successful inbound sales teams are able to get to know prospects quickly by asking them smart, qualifying and relevant questions. These questions continue to make the prospect feel safe, but they also help you understand exactly what they need in order to make a buying decision.

 

Effective inbound techniques include a well-defined process that flows and continues the educational experience from the marketing efforts and helps the sales team to better understand their prospects and solve their problems.

HOW MARKETING AND SALES SYNERGY MODEL WORKS FOR SAAS COMPANIES

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Sales and marketing teams share almost identical goals: driving revenue, increasing profits and delighting customers. However, a lot of bigger companies in the SaaS industry have a real challenge of getting the two teams to actually work together and align their processes. The development of synergy between the sales and marketing is a growing focus in many organizations. Here’s why:

  • As much as 80% of leads that are produced by the marketing team are never acted upon by a sales rep.
  • According to the American Marketing Association, about 90% of selling content is never used in selling.
  • According to CMO Council, salespeople spend around 40% of their time creating their own messaging and tools.
  • Only 27% of the leads sent to salespeople by the marketing team are qualified first.

 

Pretty sad statistics, right? So, why is this happening? It is because of the absence of synergy between sales and marketing teams. In many SaaS companies these two teams are highly disconnected.

 

According to Kae Kronthaler-Williams, Global VP of Marketing for Exact, there are four important ways you can align sales and marketing for a positive impact on a company’s revenue:

  1. Get sales onboard early – both the VP and the team. Working with a small group of salespeople will give you the chance to set examples of how the work should be done. If there are a larger number of sales personnel, bring in the managers to help share ideas, processes and insights into onboarding the sales staff.
  2. Share relevant information, such as statistics, customer data, and organizational successes with sales team in order to build credibility.
  3. Both sales and marketing teams need to be as transparent as possible in order to facilitate the working process and create trust. 
  4. Align KPI’s (key performance indicator) of the marketing team to the sales KPI’s and financial metrics. This really helps the collaboration begin and continue. They will see how many of their goals are aligned with one another.
  5.  

In order to achieve the perfect sales and marketing alignment, you need to clearly understand their synergy model. Below is how marketing and sales synergy model typically works for SaaS companies.

The marketing and sales synergy model consists of four parts:

  • Education
  • Revenue Language
  • Communication
  • Shared goals

Let’s discuss each of them one by one. This is vital information for your company’s success, so we will try to be as clear as possible while not boring you to death.

 

1. Education 

 

First of all, in order to create healthy relationships between sales and marketing, you need to educate your marketing team on all things related to sales. The reason is that you cannot simply create a marketing team relationship with sales without understanding their world, their way of thinking and their main activities. It really won’t work. So, in order to get into the sales world, you need to clearly understand what are their goals and key initiatives. Ask and then identify what is the sales process, who are sales team members, how does sales define their pipeline, what is their cadence of their internal meetings, customer calls and so on. Here are the 7 most important questions marketers should be asking their sales reps.

 

The best way to help marketers understand sales is through having them participate in sales meetings and sales calls. Once they begin to understand the sales team and their processes, your marketing team can begin to assist the sales staff with what matters the most to them: closing deals on leads.

 

2. Revenue language

 

Like sales, marketers should also begin embracing the language of revenue as per your SaaS company’s standards. In the brave new world of SaaS marketing, language of revenue is less about pretty fonts and printed slogans on mugs and more about driving revenue. Typical revenue marketers ask sales questions like: what number do you need for hitting your new acquisition target? What does your current opportunity pipeline look like and how we can help your team? What is your average deal size and how we can increase it? Why are opportunities not closing and how can we help you with them? Asking such questions and being involved in such processes will lead to faster sales cycles, bigger deals and, you guessed it, increased revenue. Those SaaS marketing teams that are aligned with their sales team can help accomplish these key metrics, because everybody is now on the same page as one another.

To create a hyperbolic example, imagine: what if the marketing team members had no idea of what the phrase ‘buyer’s journey’ meant whenever the sales team mentioned it? When the sales personnel mention that they do not have enough leads in the consideration phase of the buyer’s journey, what would the marketing personnel do? They simply would have no clue what is being referenced, and thus no idea of how to address the lack of leads in the consideration stage. While this was an extreme example, it underlines the point that shared company terminology between the sales and marketing teams is key for synergy to exist between them.

 

To get your marketing team speaking the revenue language, set up a series of 30-minute meetings and ask your sales team to make presentations on these topics for marketers. If your SaaS sales team covers each of these areas this will help you accomplish several things:

 

  • Your sales team will feel more empowered
  • The sales team will begin to connect with marketing team at the cognitive level
  • The sales team can provide their views and share their opinions with the marketers without any barriers
  • Your marketing team will clearly understand what is important to sales, and how to help increase revenue
  • A relationship and two-way dialog between the two teams will grow

 

3. Communication

 

Once your SaaS marketing team starts to head down the revenue-boosting trail, the role of this team changes in the company as in how it begins to relate to the sales team and building revenue. As a leader in your company, in order to get ready for sales revenue-targeted marketing and in order to engage in a meaningful relationship with the marketing team, you need to have an effective vision and a game plan in place.

 

In a leadership position, it’s your responsibility when it comes to setting the vision, creating and communicating the game plan, collaborating with managers on refining the game plan and getting the teams to buy-in to your game plan. You need to clearly communicate the vision in order to make the sales team understand what’s in it for them, that you are making a plan not just for increasing the company’s revenue, but increasing their own as well.

 

Creating and getting commitment to a jointly developed game plan takes a good deal of time and repetition. You cannot just simply walk into a meeting and expect your sales team to fully and clearly understand your 30-minute presentation. You have probably spent months attending conferences, reading books and educating yourself about the benefits of revenue marketing. So, in order to communicate it to your sales and marketing teams effectively, you need to create a plan for multiple communication methods, meetings and events for sharing your vision and crafting the ultimate game plan. For example, you can set up a nurturing campaign based on company personas, such as VP of sales, sales team leader, etc. and nurture them with what revenue marketing is all about, why you need it and how well it is coming along in its development.

Here are 6 sales and marketing communication tips to build smarketing.

 

4. Shared goals

 

The importance of sales and marketing having shared goals, aligned compensation and complementary organizational structures cannot be ignored. In the SaaS sales world, no revenue accountability for marketing means ZERO respect from sales! If we take a look at the most successful revenue marketing machines, we can see that here the marketing team has the same kind of goals as the sales team. If the sales team has a number tied to new account acquisition, so does marketing. If the sales team has a number of enterprise accounts, so does marketing. If sales has a number for a new product, so does marketing, and so on.

 

You need to think about the goal alignment in terms of a maturity model. Based on the technology, processes and the people of your SaaS company, you can take a step-by-step approach to assigning KPIs to the marketing team. The natural procession of KPIs might look like this:

 

  • Number of leads produced
  • Percent of leads accepted by sales and the conversion rate of lead to SAL (Sales Accepted Lead)
  • Number of opportunities created and the conversion rate of SAL to opportunity
  • Percent of contribution to pipeline
  • Percent of contribution to revenue
  • The quota that aligns with the sales number.

Here are more 16 marketing KPIs to measure

 

  1. DO YOU ALSO IGNORE THESE 5 SALES STRATEGIES LIKE MOST OF THE SAAS CEOS DO?

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Selling SaaS is far more challenging than selling lemonade. 

 

First of all, everybody likes lemonade on a hot summer day (try it warmed up in the winter time, too). If you don’t, then you don’t have a soul, but the point we are making is that a physical, well-established, and universally enjoyed commodity does not take much effort in selling. How often do you hear of a lemonade stand going bankrupt?

 

Enough with the absurd mental images we are forming for you, but SaaS is a challenging market to prove successful in. It has a lot going for it, but also against it. Like any concept, service or commodity new to market, it took some time until customers became rather familiar with, and most importantly, have faith in SaaS vendors.

 

Still, SaaS presents unique challenges for CEOs when it comes to getting their software subscribed to, and renewed. This isn’t just selling a video game.

Above all else, when it comes to increasing your company’s sales, keep in mind that your SaaS company is not in fact selling software, but selling customers a service, not software. The difference here is that in order to thrive, and for customers to keep coming back to you for your service, you need to develop a relationship with them beyond the initial lead-to-customer conversion.

 

The SaaS industry is booming, and will continue to grow in global revenue, but one cannot ignore that 90% of SaaS startups fail within a few years. If you are the CEO of a younger company (which you likely are, as SaaS as a business model is only about 15 years old), you would be wise to heed our words. No matter how great your SaaS is, if you cannot sell it you might as well cut your losses.

 

Today we are going to go over four largely ignored SaaS sales strategies that will make or break your sales and customer retention rate.

 

 

1. SaaS Influencer marketing

 

Influencer marketing is a quite widespread and working tactic for B2C companies and presently it becomes a preferable form for B2B companies and especially SaaS businesses too. What are the key elements that make influencer marketing campaign rewarding and profitable? You need to collaborate with an influential person in your niche who is also active on at least one virtual platform (runs his own blog, posts frequently on Facebook or Twitter or is a popular vlogger on Youtube), gets high engagements and is ready to introduce your product to his audience. It seems like the potential SaaS influencer has to meet many requirements to actually be considered as influencer.

But believe, decision makers will hardly turn blind eye to the fact what others, especially niche experts talk about a product they consider to buy.

 

Sujan Patel, a growth marketer and entrepreneur tells in his Youtube video that various SaaS businesses have approached him so he write about their software. But he says it’s important to give a person time to use the software for some period and understand, is it actually good and is it worth promoting. Patel also mentions a real example from his experience. SemRush (SaaS that offers an SEO tool) provided their software to Patel for free for 6 months. During this time Patel was enjoying the software and when the company asked him, he was eager to write and talk about it as the tool deserved it (Tactic #14). So be ready to allow time and free access to your potential influencer so he is confident about promoting your service in a genuine way.

 

2. Cross-functionality; CEO, sales, marketing, and customer service teams

 

Why settle for 2 when you can make 1 + 1 = 3?

Cross-functional company arrangements are greater than the sum of their parts. Being that a successful SaaS sales experience is a continuing relationship between customer and company, rather than a one time deal, cross-functional teams are able to provide greater value to customers than those with clearly defined, individual roles (read: limited).

 

Each member of the team should be aware of and concerned with sales as if it is the responsibility of everyone, and it is, being that sales keep everyone employed. However, what we mean by the value of cross-functionality is that the buyer needs to be nurtured well through every step of the process.

 

Many users will take SaaS products for a spin (usually for a free-trial) and not convert to dedicated user. How to fix this?

The CEO should convey the vision of the company’s cross-functionality to the team, that long-term renewing users are the top priority. The marketing team is for getting the name out there, sales team for closing the deal, customer support team for keeping customers satisfied and happy to come back for more.

 

However, between each department the CEO should reinforce a vision for synergistic operation, which is what drives the strongest long-term sales. Customer service needs sales, which needs marketing, so by blurring the lines between departments the collective ability is multiplied for gaining long lasting customers, who feel valued every step of the way.

 

As seen above, vision delivered from the top-down has an even greater impact on company performance that sales training.

 

3. The human experience; adding a personal touch 

 

Sometimes it is easy to become distracted with sales metrics, product development, sales training and whatnot, and end up losing sight of the larger picture regarding sales. Ask yourself, what are your customers?

If you answered “managers” or “medical researchers” you are wrong. Well, not exactly 100% wrong, but the right answer is “people”! No matter what service your software is providing, it is being purchased by people first, and users second.

The most successful SaaS companies personalize the buying experience for their customers. After all, the vast majority of buyers make their purchasing decision based on their experience with the human selling it to them, rather than on the strength of the company.

 

There are any number of ways to personalize the SaaS sales experience. Take a look at this excellent example from Intercom:

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(source: intercom.io)

See the language that they used? First names, a message in the first person, a personal photo, etc. This is not the only way to increase a personalized buying experience. Piggy-backing on our previous point, many CEOs think that the customer support staff should be the only ones to take care of emailing customers who are using a free trial. Not so.

A personalized email from the CEO to a customer is worth its weight in gold regarding free-trial-to-paying conversion rates, and only takes a couple minutes. There really is quite little that can match the power of the human touch, but too often SaaS companies overlook this factor.

 

4. Speed up the sales cycle; don’t hunt for only the big fish

 

Fish of all sizes need love, not just the whales, and this especially rings true for the SaaS industry. A measly 15-20% of free-trial users will convert to subscribers, and many more drop off after a few months.

In traditional, on-premise software sales strategies, the company would focus on developing software and hoping to land a handful of lucrative purchases from a few massive accounts. That is where the real money was at. However, that business strategy is suicide for SaaS companies, especially startups.

 

The question is, how to get your SaaS into the hands of everyone it’s appropriate for, quickly, and without excessive marketing costs?

 

One of the swiftest ways to speed up your sales cycle is to go to where the fish are: identify which channels your target audience is frequenting the most, and invest the bulk of your time and marketing resources there. It isn’t just about casting a large net, but where you cast it.

 

For example, if you provide project management software, it will likely be wiser to frequent marketing and/or architecture blogs instead of Pinterest or Twitter. Remember how we told you the value of the human touch? If you incorporate that along with rapid-fire communication with your leads, you can effectively shorten the sales cycle and keep churn to a minimum.

 

5. The power of the referral; incentivizing customers

 

One of the most frequently overlooked sales strategies is the power of a referral program. Of course, every company knows how valuable customer testimonials are for your landing page, but many don’t yet know that SaaS empires have been built on incentivizing customers to refer their contacts.

 

One of the most famous of SaaS company referral success stories is Dropbox, who in 2008 grew their customer base by 3900% over the course of 15 months, 35% of which was through their referral program. Let that sink in for a minute…

 

Referrals will only happen if your customer is incentivized to take the time, and doing so involves as little friction as possible. This was a challenge in Dropbox’s case, as their product is not the sexiest or warranting of much customer engagement. So what did they do to get customers to let their friends and family know to sign up?

 

Dropbox offered users added storage space when they referred contacts to use Dropbox. That’s a nice incentive, but more importantly, the company made it super easy for customers to import contacts into the referral request prompt. Piece of cake, and the company is one of the most widely used in its industry today.

 

The example with Dropbox is just an example, but there are a plethora of other methods you can employ to get referrals. Remember, the easier you make it for your customers the more they’ll get new customers for you.

 

Strategize before you sell

Your company likely has a “try before you buy” trial period, so why not have a strategize before you sell (emphasis on before) policy as well? Your referral program, customer communication language, and other under-utilized sales strategies should be aligned prior to launch. However, if you have already launched don’t worry too much, as it is never too late to improve your sales!

  1. 8 SMART TACTICS FOR YOUR SAAS CUSTOMER ACQUISITION STRATEGY

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Just look at customer acquisition vs retention statistics. What do you see?

 

  1. 1.  When you acquire a new customer, it costs you 5x more than if you retained your existing customer.
  2. 2. If you increase retention rate by 5%, you can increase your company’s profitability by up to 95%.  
  3. 3. Existing customers are 4-5x more likely to repurchase, refer your product and forgive your mistakes (source).

 

And the list goes on. But now you are asking a logical question. What if I am starting out a business and don’t even have leads, not to mention SaaS customer acquisition strategy? What if my customer base consists of only a few paying users and even if I retain all of them, I can’t grow? 

 

Acknowledging the power of customer acquisition for SaaS companies in any stage, we have combined 9 practical and working strategies so that you can help more users and grow more rapidly. But first of all…

  

How to avoid mistakes while implementing your SaaS customer acquisition strategy?

 

Are all mistakes equal? Of course not. But the ones listed below can be equally dangerous for your SaaS and impede its stable growth. To hold you back from possible misperceptions and undesirable outcomes, we want to share 6 cases that are common in business. 

 

#1 Being stingy and escape investing financial resources – Economical is not the same as stingy. You should be careful in spending money, provident in controlling your budget, and understand in which marketing channels you invest. That’s maybe your company’s strategy because you get funding from investors or because that’s what you consider a reasonable approach. But if you think that SQLs and opportunities will appear in your database without any spending, sorry, that’s not gonna work.

 

Tip: See which marketing sources drive the highest number of leads & the most profitable customers and go on investing there.

 

#2 Speaking about the company and product not customer’s challenges – You and your team may be proud of your SaaS company’s achievements, experience level, and quality of services. Your customers and prospects usually aren’t. They will be proud of themselves when they notice tangible improvements after choosing your software. Stories about your company and team are worth sharing and they help you build a strong brand. But when a prospect is contacting you or signs up for a free trial, that’s the moment you should stop caring about your story and start caring about your customer’s success. 

 

Tip: Ask questions to your prospects about their pain points and aspirations. Let them tell why they reached out to you and what they expect from you. Learn as many things as you can.

 

#3 Focusing on product features not solutions – You can’t imagine how simple it is! Your users may not be familiar with a technical vocabulary and have difficulty in figuring out what is data export or integration (seems trivial but that’s real). Besides that, people love hearing how a particular feature works, not how it’s called. So instead of mentioning “Google Data Studio Integration”, you can mention that your users can bring your software and Google Data Studio together into one system and generate better reports (for example). 

 

Tip: Change the words, keep the meaning. Solutions and results are what your users want to see.

 

#4 Thinking that everyone will convert – That’s confusion. Some users will not love your software (make sure to know why), some will prefer competitors for a cheaper price, others will stay with you for months and years. When you see new subscribers, new leads, new free trial signups, discover how they found you, analyze your data, do your best to convert them. But don’t get frustrated when you lose a sale – that’s not always your fault and that’s sometimes for the better.   

 

Tip: Learn from everyone, serve the ones who appreciate your software.

 

#5 Starting without preparation – Remember we started our guide telling that you need a website. An awesome one. That’s what we are talking about now. Do you have landing pages to welcome your visitors after they click your ad? Have you provided enough information on your website? Do you have a customer success team to answer user queries? If you just run an ad but are not ready for the further developments, you will end up spending a huge budget and don’t get what you desired. 

 

Tip: Read the first section of this article

 

#6 Treating all prospects equally – Who are your prospects? Free trial signups, ones who contact you, ones who provide their personal contacts and  agree to connect with you. Do they have the same background, are they in the same stage of the sales funnel? No. Nurturing a lead from less to more quality one takes time and you should not send the same email sequence both to your free trial user and an eBook downloader.

 

Tip: Respect the uniqueness, use a different language for prospects in different stages.

 

How to get SaaS customers: Our 8 tactics

 

Finally we reached this section. Hope your way wasn’t tedious.

 

Don’t be surprised but we are not going to recommend you running social media or PPC ads. Not because they are not inbound tactics or are worthless. The reason is that there is so much info separately about paids ads and now we want to concentrate on some content-driven approaches. 

 

#1 Get published on tech blogs – You can tell your startup and SaaS story on Mashable, Hackernoon, Indie Hackers, TechCrunch, The Verge and other websites with high traffic and large number of social media followers. What’s the best part about it?

 

You don’t talk about a side topic, hoping that readers will scroll down until the end of your article, see your company name and visit your website. You will be talking about your product from a broad perspective. You will answer questions like how you started your SaaS business, what motivated you to develop a new product, what was missing from the market and how your software helps people.

Only developers follow these blogs? Please, no. If your software truly stands out with its functionality and value, you will receive a bunch of opportunities to promote your product via influencers and among real users. The aim of these publishing platforms is to introduce the latest achievements in the tech industry at first hand. If you have created something incredibly awesome, it will get noticed and your company won’t feel a shortage of customers.

#2 Leverage review websitesProducthunt, G2 Crowd, and Capterra are among the most reputable sites where you can list your software, gather customer reviews, and get found when someone is looking for a product similar to yours. 

 

How does it work? People go to Google and search for anything under the Sun, including software. These sites are miniGoogles envisaged for finding online tools. Be sure not only to create a profile and disappear but ask your previous and existing customers to leave feedback about you. Your future customers will notice your well-designed profile immediately, become interested in your company and get ready to using your services.

capterra

#3 Join Facebook groupsStartup product launches, SaaS growth hacks, SaaS revolutionaries. Top 3 Facebook groups where you can

  1. Answer users’ questions when they ask for a specific tool (that tool may be yours and you can promote it!)
  2. Share information about your software and introduce it (even share your Product Hunt launch page and get upvotes)
  3. Place links from your website in the comments section to answer a user’s question
  4. Get advice from other SaaS owners, marketers and build new relations.

As you can see, you can use these communities not only for reaching potential customers but also increasing brand awareness, getting traffic, sharing your knowledge and positioning yourself as a thought leader.

 

P.S. 1 Don’t forget to read the rules before joining the groups. 

P.S. 2 Overall, 20 000+ FB users are members of these 3 groups. Not a small number.

 

#4 Launch an affiliate program – We want to describe this approach with a real-life example. Robbie Richards runs a blog on online marketing strategies. He wrote an article called How to Find High-Value Competitor Keywords (Actionable 5-Step Guide) and recommends the readers to try SEMrush. He clearly mentions:

“Disclaimer: This article does contain affiliate links. If you purchase a tool through one of my links I will receive a small commission at no additional cost to you.” 

robbie richards

You can reach out to a suitable candidate and ask him for partnership. The benefits?

 

  1. You will not pay any fees until someone subscribers to your software
  2. Your partner will promote his article via social networks and email 
  3. You will increase your brand awareness and the chances of your product to reach the right audience.

#5 Encourage users to refer – Word-of-mouth is a powerful strategy for at least 3 reasons:

  1. Creates higher brand awareness
  2. Increases your customer lifetime value
  3. Reduces SaaS customer acquisition cost

And you should incentivize your existing users to refer your product to their friends and colleagues. 

 

How to do that – with a referral program.

How to reward your users – offer them (and their friends too) a 10% discount or reward with points. For example, FreeAgent, accounting software, is ready to provide a 10% discount to those who refer this tool. 

 

#6 Reach out to an influencer – If you offer translation software, you should find a blogger or vlogger who writes (speaks) about the translation industry. Whether he is just a blogger or translator, he may become an invaluable source for high-quality leads and, consequently, customers. 

 

Maybe you will pay your influencer for writing an article about your software or recording a video about it, maybe you are going to pay him per post or per lead who signs up for your free trial. No strict rules, you both are going to define them! 

 

For example, Mari Smith is a social media expert and thought leader. In the screenshot below, you will see that she is partnering with Wave.video, an online video maker tool. That’s a quite relevant choice as her followers want to learn new tips and tools to perform better on social media. And an online video maker tool can definitely help them create highly engaging posts.

mari smith

#7 Find and answer Quora questions – Let us share a secret with you. Quora works best maybe for online tools and software (if you use it for promotional purposes, not for fun or leisure). What’s your product? CRM tool? Email marketing tool? Product management tool? Live chat tool? 

 

People are asking about all this on Quora and you can usually come up with multiple questions requiring the same answer. See how many questions are out there only about customer success tools.

quora

#8 Invest in blogging, optimize for speech recognition – Voice searches are gaining popularity. Website owners are inserting speech recognition tools on their blog so a machine reads the text out loud for visitors (maybe they are lazy or want to “read” your guide while doing something else). Despite these strong changes in user behavior, writing new blog posts and updating old ones remains a priority. 

 

Target long-tail keywords (especially questions keywords), publish regularly and make your visitors’ life simple with modern technologies (you are SaaS, you know the power of it).

 

Wrapping up

 

You already know what strategies you can implement to reach your SaaS customers, what are some common mistakes made by business owners and what are some essential online elements you should build to attract a considerable amount of new paying users.

Schedule a free consultation 

 

WHAT ARE THE MOST SUCCESSFUL SAAS PRICING MODELS AND WHAT YOU MAY BE DOING WRONG

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SaaS (Software as a Service) has proven to be a very elastic, scalable and progressive industry. According to IDC, cloud services market grew 28.6 percent in the first half of 2017 and the revenue totaled 63.2 billion (the biggest share belongs to SaaS).

Another research firm, Gartner Group says that SaaS industry remains the largest segment of the cloud market. The industry revenue is expected to grow 17.8 percent and reach 85 billion in 2019.

With such numbers, the SaaS industry has no signs of slowing down, and it has already become a very attractive space for startups. However, getting into SaaS with creative ideas is one thing, but being successful with it is a beast of its own. There are hundreds of articles focused on the development of successful SaaS companies, but the focus of our article today will be on the SaaS pricing models.

 

Before getting into the successful SaaS pricing strategies, some background needs to be covered. According to Lincoln Murphy, pricing models are not about the pricing page you use. In order to be successful, companies need to give serious consideration to market position, service level and customer satisfaction. Here are some important factors you need to consider:

  • Where will you position yourself in the market?
  • Who is your target audience?
  • Do you serve businesses (B2B), direct customers (B2C) or both?
  • How many customers do you desire/will be able to serve?
  • What are the main benefits your customers will get?
  • How long is your customer lifespan?

Thinking about these questions will give you the chance to clearly understand the value of your SaaS. That, in its turn, will make it easier for you to think about pricing tiers and bundles. SaaS subscription pricing models (on a monthly or annual basis) are the most popular ones in this industry.

 

And this popularity is maybe the biggest thing SaaS businesses have in common. But if we go deeper, we will discover more and more differences and details. Now, here we present the most successful pricing models for SaaS. You will also find real-life SaaS pricing examples and learn everything necessary about software as a service pricing mistakes.

 

1. Per User Pricing

 

This is a popular SaaS pricing model, where you have users pay different amounts based on the number of individuals using the software. However, according to Patrick Campbell from Price Intelligently, this common pricing model may hurt some SaaS companies, especially if you are working with client companies where there may be multiple individual users.

 

The reason is that when you implement per user pricing, you are cutting down on the number of people within a company who will use and love your software. Moreover, such a pricing model limits the potential number of users, which is not good for the health of your SaaS company’s profits. Sometimes, this pricing model can work for SaaS companies, but in many cases you need to implement a value-based approach.

In the pricing models of SaaS companies, the number of users usually is not the only factor that differentiates free and paid plans. For example, in case of Pure Chat, a live chat software, the Free plan is limited to 3 users/operators, while the Growth plan is available for 4 and the Pro plan for 10 users.

 

2. Tiered User Pricing

 

The mechanism of this strategy is somewhat related to per user pricing. In the case of tiered user pricing, the number of permitted users increases in bands rather than single digits. For example, a SaaS product may cost one price for up to 5 users, another price for up to 10 users and so on.

Bitrix 24 who provides tools for communications, tasks and projects and CRM, offers 4 pricing plans where user limit is different for different pricing strategies. In the CRM + plan the maximum number of users is 6, in the standard plan 50 and in the professional plan unlimited.

Besides the main disadvantages mentioned in the per user pricing model, tiered user pricing also has several potential drawbacks. For example, this model does not represent value for clients like solopreneurs, who may only need base features but not additional features. If you are offering tiers, make sure to think about the number of options you offer and the method in which you display them, as this can affect your revenue.

 

3. Flat Rate Pricing

 

A flat rate pricing model is when a company charges a single fixed fee for the software (or single fee regardless of target group). For example, SDL Trados Studio is a translation software that offers 3 studios and you can buy any of them with a single payment.

The first plan is for freelance translators who will be able to translate, review, use terminology, and machine translation. The second plan is for translators with two PCs (allows extra activation license) and the third plan is designed for global teams (allows to share a license with multiple users in several locations).

The main disadvantage of this approach is that you simply can’t retain your users (they get what they want with a single transaction) and every time you need to acquire more and more new customers (acquisition is always more expensive than retention).

While in case of monthly or annual subscription models, you can develop an attractive retention strategy and make them pay for a long time on a regular basis. On the other hand, you can price your software considering how much a single customer would stay with you and how much his Customer Lifetime Value (CLV) would approximately be.

Another approach can be found on Basecamp’s pricing page. It is project management and team communication software. With just $99 per month, you get unlimited users and projects, all Basecamp features and 500 GB of file storage. $99 is their only pricing plan.

 

4. “Pay as You Go”

 

In the “Pay as You Go” SaaS pricing model, the customers are charged based on their usage of the service. A prime example of this pricing model is Amazon Cloud Server.

The advantage of this model is that, for example, small companies (or companies with fluctuating service usage) won’t need to pay huge amounts of money if they are using only several features.

 

However, the disadvantage for clients is that it is impossible for them to know for sure what their resource usage will be, which makes it difficult for them to calculatetheir costs in advance.

 

Since we were talking about pay-as-you-go model, let’s focus on something called SaaS billing models. Almost always it is used interchangeably with SaaS pricing models.

 

The thing is – billing model is more about how frequently you charge your customers, pricing model is more about based on what value metric you do so. You users can pay you monthly, quarterly, annually – that depends on your billing model. Pricing model is a broader term, pointing out to how to price software as a service as a whole. You can learn more about monthly/annual SaaS subscription model from our another article.

 

5. Feature Based Pricing

 

Another popular SaaS pricing model is differentiating prices in tiers based on the services and upgrades available to customers. For example, if your client is running an invoicing company, then he/she will probably be focused either on the number of customers they can manage, or the number of invoices they can send. In such cases, the feature based pricing model is a very wise choice.

 

Let’s look at the example of QuickBooks which is an accounting software.

 

With their simple plan, you can track sales, expenses, and profits, create and send unlimited invoices, track and manage your sales tax.

When you decide to choose their second plan, in addition to the simple features, you will be able to manage and pay bills, transact in multiple currencies and generate sales quotas.

 

And the third version will allow you to track inventory, create purchase orders and track project or job profitability. As you can see, the more features, the higher pricing plan.

 

6. Per Storage Pricing

 

Cloud storage SaaS companies often use tiered pricing models based on the amount of storage customers need to use. For example, Google allows its users to use 15 GB of storage across their accounts. And if a user wants extra storage, then he/she needs to pay a fee.

Dropbox lets you have 2 GB of storage for free, after which users desiring increased storage pay for it. This is a clever pricing model, as it allows people to become familiar with the software/service, which may encourage them to upgrade when they hit the storage limit.

 

7. Freemium

 

The freemium SaaS pricing strategy is similar to the per storage pricing model. In this model, the company is providing great functionalities for free and also offers a range of upgrades. For instance, you can get a lot out of LinkedIn with its free version, but there are some upgrade packages that are tailored to the specific needs of job seekers, recruiters, business owners, etc.

This can be an awesome pricing model for your SaaS company if your add-on services are super valuable to your target market. However, there is always the danger that most of your customers won’t need your upgrades. In this case, you may end up with a lot of free users who are using much of your support resources without the revenue to stay afloat.

 

8. Free, Ad Supported

 

In the free, ad supported pricing model, you make your core software free, but you earn revenue from allowing advertisers to run ads within your software. In this case, you do not charge for your software, except for when customers choose to pay you for an ad-free version.

For example, with Spotify, you can have access to millions of songs for free, but you have to be ready for coming across a lot of ads. You can enjoy ad-free music, listen offline, have unlimited skips if you use a paid plan.

So, what are you doing wrong?

These were the primarily used SaaS pricing strategies. However, don’t think that just because you use one of them you can’t use the others. Becauses there are many companies who mix and match pricing models depending on their audience.

Now, when we know which are the most useful pricing models, we can move on with presenting what you may be doing wrong with your pricing strategy. Here are the most common pricing mistakes that SaaS companies make:

  • Failing to optimize pricing page

Price is not just about numbers. It’s about communicating with visitors the right way, knowing how to motivate them and finally, desiging a high-performing pricing page. While doing it, you have to invest all of your imagination and follow some principles people consider before making a buying decision.

When you show the more expensive plans first, then gradually offer cheaper plans, that’s one way to influence your prospects. Mentioning buyer personas on tiers, recommending a certain plan again play great roles in this game.

Even creative illustrations can impress your prospects and evoke associations: don’t underestimate the power of copy & design on your pricing page.

  • Basing price on costs

Traditionally, when selling one-time software, sales people were focusing on covering large upfront and marginal costs. And then they were adding a profit margin which is also known as “cost-plus” pricing. However, times have changed. The way SaaS companies need to approach pricing strategies is different from one-off software sales. Instead of basing prices on the raw costs of developing the service, you should base your pricing on the ongoing value that customers get from your software.

  • Basing prices on competitors

Similarly, your competitors may be a great source of insight on where to start your prices. But, again, your SaaS price points should be based on the value it offers to customers. No two products are exactly the same. And you may miss out on revenue if you offer the same price, but you have additional features on your software. Or, if your software is more streamlined, then of course you should offer lower pricing than their SaaS.

  • Having only one price option

The amount of money that people are willing to spend varies a lot from one client to another. You can get more customers and thereby more revenue if you offer different plans, with different bundles of features for different target audiences.

For example, SalesForce uses a pricing strategy based on the number of features in the package each customer chooses. In this way, it allows customers to sign up initially at a lower tier and encourages them to upgrade over time.

  • Having too many SaaS pricing tiers

On the flip side, though customers like options to choose from, too many options can also be counter-productive. When you have too many plans with different features, it can complicate the overall checkout process. That can make potential customers feel overwhelmed.

It is a good idea to have around three or four different plans, which is the status quo for most SaaS companies that charge for their services.

Besides that, SaaS companies usually have an Enterprise plan on their pricing page. But they mostly ask to contact them for additional information. That’s because enterprise SaaS billing models are harder to define and the prices depend on that particular company’s request. You can find an example on SurveyMonkey’s Plans & Pricing page.

  • Avoiding transparency

What could be a sound reason for not being clear and transparent with your prospects? Maybe because you want to make as much money as you can from every deal. Or maybe you can calculate the actual price once you know what your prospect wants.

Any of these reasons can be logical for SaaS companies. But again let’s speak about how your prospects will perceive this situation.

They visit your website and can’t find “Pricing” or “Packages” section. All you offer them is “Request a quote”. They should provide large amount of information about their company and wait for an answer. At least a few hours or even days. This process requires additional time both from you and your prospect.

Besides, that encourages a prospect even not to submit a form and visit another website where pricing options and plan features are easily accessible.

Learn from the experience of others

So, there you have it: the most successful and basically the best SaaS pricing models and the main mistakes you might be making. If you have other unique pricing strategies, or pricing mistakes you have learned from, please share them with us.

For more info watch this video on Youtube (How to Evaluate the Right B2B Pricing Mode for Your Software Startup)

  1. HOW TO OPTIMIZE YOUR SAAS PRICING PAGE? (BEST PRACTICES + EXAMPLES)

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Psychological facts about your consumers + advanced pricing page tips + real SaaS examples = your SaaS pricing page is ready to close! 

Let’s assume your SaaS pricing page is the final food you want to prepare and you have to use the right ingredients in the right way. Design, pricing strategy, the order of pricing plans and other elements are your ingredients. You can combine powerful design solutions and persuasive title with buyer persona-focused plans and don’t be surprised, your pricing page is all set to close more customers. So keep reading to discover how you can prepare the most “appetizing” SaaS pricing page. 

Before we start, we want to mention that some SaaS companies offer Contact us option instead of introducing separate plans. For example, look at LeanLinking who provides tools for procurement and supplier management. You can write your message, contact them and get a quote that is designed considering your exact goals. Or when you visit DataHen’s website (web scraping services), you fill in a form, tell what kind of data you need and get a quote.

 

When is it preferable to design your pricing like this? In most cases, companies don’t mention prices because it’s difficult to divide the services into separate plans and the cost totally depends on the request. If this is not the case for your company, then keep reading!

 

SaaS pricing plans: Where to start from and where to go? 

Well, your first step is to figure out which pricing strategy or business model you will go after. In other words, what’s your value metric.

 

If we look from the “technical” side, you can charge monthly, annually or both ways. The third case is what SaaS companies usually do. The truth is, annual billing is what you’d like to see – reduced churn rate and projected revenue. On the other hand, customers are not always ready for a long-term commitment. Being flexible will create new tasks for your team in terms of calculations but you will attract a greater number of customers too.

 

When it comes to the “practical” part, here are the most popular pricing models:

  1. Per-user pricing – based on how many users use your software (Jira)
  2. Flat rate pricing – a single fixed price monthly no matter how many users (Basecamp)
  3. Pay as you go – based on what features customers use (Amazon Cloud Server)
  4. Per storage pricing – based on how much space the customer needs (Google Drive)
  5. Feature-based pricing – the more features the business needs, the higher plan it should choose (QuickBooks).

 

Which business model your SaaS company should follow depends on what type of service or product you offer. The most common models, though, are per-user pricing and feature-based pricing.

 

Our next sections are dedicated to consumer perceptions and best practices of creating a high-performing pricing page. You will learn what details to consider and how to take your SaaS pricing page to a higher level.

 

User psychology: How prospects think and how to make them want your SaaS

Psychological elements are the spices of your page and they decide your pricing strategy. Several ingredients fall under this category, from pricing principle to offering a recommended plan. But let’s move forward step by step.

  • About buyer personas

Design a separate plan for each buyer persona you target. That’s the first tip we would like to give you. Your every persona has its unique needs and goals and you know them perfectly because you have done your research. Let’s see how SaaS companies follow this principle.

 

FreshBooks who offers accounting software has created 4 plans for 4 personas: self-employed, small business, growing business and thriving business. When a growing business owner visits this page, he is already directed to the third plan. It makes him think “Here it is. We are a growing business. Let’s see the details.” and come to a decision faster. Or SDL Trados, a translation software provider, has targeted 3 main groups on their page: translators, translators with 2 PCs and global teams.

freshbooks

  • About defining your price

You will also see that prices are not always round numbers. For example, when you look at pricing pages of Ahrefs ($99, $179, $399), Riddle ($19, $49, $249) or Hootsuite ($19, $59, $599), you will see prices ending with 9, not 0 or 5. That’s because, for example, 99 is associated more with 90 than 100.

  • About the price tiers

When you have a single plan, the prospect is considering whether to buy from you or not. But when you have 2+ plans, the prospect thinks which one to buy. Moreover, offering 3 different prices is regarded as the most effective tactic. “This one is too little for me, that one is too much for me. I will choose the one in the middle.” This is how approximately most prospects make their estimations.

  • About social proof

Have you heard about mob mentality? It’s when people follow the behavior or opinion of their peers rather than try to find a rational explanation. That’s why including feedback on your pricing page from your previous customers can be a truly influential factor.

 

On 3dcart’s Pricing page (they are an e-commerce platform, designed to help online store owners succeed) you can see both short testimonials from their customers and the logos of well-known companies they have partnered with. Your visitors will definitely start appreciating you more if they hear positive feedback about you from other people or discover that global companies have decided to partner with you.

3dcart

  • About recommending a certain plan

Do you think of recommending one of your plans? Yes, that’s a nice idea because you kill three rabbits with one shot. First, you help and guide your prospect if he is confused. Second, you impact his final decision if he can’t decide between your pricing  plans. Finally, you awaken the fear of missing out. “If most people choose this tier, then it’s the most convenient one. I also must use it”.

 

Look at the examples of BuzzSumo, ActiveCampaign or Moz. They all follow this simple principle. Some call it “Recommended”, others say “The most popular” but the idea is the same.

  • About the order of plans

You probably think that your free plan should be on the left side and your paid plans should go from less to more expensive. But that’s not the best decision.

 

You visited the pricing page, you saw $299 and said: “Oh, that’s too much. I don’t need that high price. But wait, #14.99 sounds pretty good. It’s excellent for me.” When you see the large number and then a smaller one, that second option seems even smaller in your eyes. See, Hello Bar is one of the few examples.

hellobar

The best spices for the best pricing pages: Start closing even more…

#1 Value metrics of your pricing tiers

It’s natural that your software has both primary and secondary features. Providing 24/7 support is a secondary feature because your customers don’t get the actual value of your software from that feature.

 

But if you charge your customers based on the number of software users and number of videos they can edit (let’s assume you offer video editing tool), those two numbers become the value metrics of your tiers. And those metrics should clearly appear on your plans as key value providers.

#2 Your pricing page title

Don’t forget to spice up your pricing page with a special title that will communicate a clear and promising message.

 

In many cases, on the top of the page, we read “All plans include free trial” or “No credit card required”. But let’s look at, for example, Marvel’s title: “Supercharge your design productivity” or Unbounce’s title: “Pick a plan to power up your marketing”. Wistia’s pricing page title is also worth mentioning: “Get more from your marketing videos. Choose your plan. Put on a party hat. Make video marketing magic”.

wistia

Of course, you want to communicate additional messages to your visitors but you can add them to other parts of your page and draw attention with a promising and beautiful title.

#3 Simplicity of your page

Never overlook the power of simplicity”. This is a quote by a Canadian writer who has nothing to do with SaaS but what he says has much to do with your SaaS pricing page. Don’t think that the more complicated your language is, the more influence you have on your visitors. Help them compare your plans, highlight the main differences but do it in a simple and understandable way.

 

This refers not only to features but pricing mechanism too. For example, HubSpot’s pricing is a bit difficult to understand. First, you choose a plan, then you are invited to add additional services to your plan such as consultation, paid users, separate Add-ons and additional Premium services to have your final plan. That’s time-consuming and confusing as people never appreciate when they have to put additional efforts in technical aspects of the buying process.

#4 The list of your software features

No one loves reading never-ending lists and comparing all the features one by one. It’s a time-consuming job. Instead of including too many checkmarks on your page, like AgoraPulse, you can simply add View more features button under the plans or write “Everything in the previous plan + these features” and not overload your page. After that, make room, for example, for the FAQ section or customer testimonials.

#5 FAQ section

You insert your FAQ section to answer all major and minor questions related to the purchase process. Questions like “Do I need to submit my credit card information before the free trial?” or “How do you charge in case of another currency?” are important, so FAQ can be a great part of your successful plans page. You can find examples on the pricing pages of Easy Projects, Teamwork or Unbounce.

#6 CTA button

Start your free trial, Get started, Start for free, Sign up now… This is how SaaS companies trigger action among their visitors. It has long been proved that CTAs like Submit or Buy now don’t have a positive impact, so it’s not desired to insert one of them as a CTA.

Let’s have a look at Textedly’s example. Even though they offer 3+ plans, the differences are mentioned clearly without making the reader feel confused. Contrasting colors on the CTA buttons are what we want you to pay attention to. They not only highlight the difference but also awaken colorful emotions. Don’t think that business owners are extremely serious and will not notice your great design efforts.

textedly

 

#7 A/B testing

It would significantly help your digital marketing activities if you decided to include A/B testing in your strategy. In case of your pricing  page, testing your design or title sounds professional but when it comes to prices, the question becomes more complex and even dangerous.

 

Imagine you sell the same product at $29 per month, then after a few months you raise the price to $39 and then charge $29 again. Nobody wants to be deceived and pay more than a product’s actual value is. But if you are serious about your price testing, be extra careful regarding how long your split testing will last, what changes you are going to make to your prices and what features you will include in every plan.

When ideas and colors matter: 6 Impressive Examples of SaaS Pricing Pages to Inspire You

In the end, we have created a gallery section for you – creative approach, memorable design, and deep idea.

 

#1 EmailOctopus is an email marketing service provider that helps send emails to subscribers via Amazon SES account. Their pricing plans openly demonstrate the situation in the market where shrimps, tunas, stingrays, sharks, and whales compete with each other. So the companies have to choose a plan based on what size of “fish” they are in the market.

octopuc

#2 Freshdesk is a cloud-based customer support software. They again have found a creative way to make a differentiation among small, medium-sized and large businesses. Customers have to figure out whether sprout or blossom is enough for their needs or creating a garden/estate/forest is what they actually want to build.

freshdesk

#3 Buffer is a social media management software and helps schedule your social media content. Let’s agree that their designers have done a great job: a beginner painter matches with Pro (=startup), a mid-level painter best suits the Premium (=growing business), and advanced painter is compared with the Business level (=large company).

buffer

#4 LiveAgent is a help desk and live chat software. On their Pricing section, they not only use three different colors for three different plans but also have approached businesses in a unique way by matching their needs with a vehicle’s opportunities. A bicycle is basically used for fewer needs, a car is something in between and a rocket means speed and advanced features.

liveagent

#5 Drip is CRM software for e-commerce. In their Basic plan, you can see a small team of around 20 members which obviously refers to small businesses. The larger the team, the higher the pricing plan. Another interesting thing is that by default all three teams are in black and white. And once you hover over a plan, it adds blue, pink and yellow colors to the team members.

drip

#6 SuperOffice is CRM software for sales, marketing, and customer service. The dart board symbolizes that the right targeting is the primary marketing goal, increase is revenue is the primary goal for sales, and the customer support should be provided with love.

superoffice

7# Autopilot is marketing automation software. In this case, a house symbolizes a small business with basic demands, while a building and a premise point to growing and established businesses whose needs and goals are more complex.

autopilot

That’s basically all we would like to share with you related to the best practices of SaaS pricing pages. Share your own experience in the comments below, follow the best practices and close as much as you possibly can!

HOW TO ALIGN
SALES AND MARKETING TEAMS
TO ACHIEVE
TOTAL BUYER ENGAGEMENT

Inbound Marketing Best Practicies book

INBOUND MARKETING
BEST PRACTICES
TO INCREASE
SAAS
 COMPANY’S SALES

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