How to sell SaaS: Part 1
Software as a service (SaaS), sometimes referred to as "software on demand," is software that is deployed over the internet and/or is deployed to run behind a firewall on a local area network or personal computer. With SaaS, a provider licenses an application to customers as a service on demand; through a subscription or a "pay-as-you-go" model.
So what is it about SaaS that makes businesses weary about introducing it to their sales model? They're afraid SaaS will ruin their business, be an added drain on resources and ending up costing them in time and money. Sound familiar? But this should never be the case
Too focussed on cost
The service element you are offering is paid for by the customers, your price should reflect the service that is expected. Don't put yourself under pressure trying to keep to rock bottom prices when this, more often than not, can be more damaging to your business if, in order to keep these prices the level of service and quality of product suffers as a result. Don't allow you or your business to become too focussed on cost; pricing should be nothing more than a logical value given to a product or service that reflects the value your customer will garner from it. As I've said before, if a customer thinks they are paying too much for your product or service but you whole-heartedly know you are at your most competitive and offering a good value for money product, then the problem isn't your price but rather you're not communicating that value! Make sure you TELL your customers about what all they are getting for their money, don't keep it hidden in the copy of a sales pack that gets flicked through!
Businesses often have this thing about keeping all their ‘tricks', the extra value inherent with their offerings until stage 2 of the sales process, when you've allowed others to be deterred at the first stage by a standalone price?
Shout about how good you are, win the battle with your level of service and what you offer in terms of measurable value and the price will be a mere formality…
If people want cheaper, i.e price over value, then strip down your service offering to the bare minimum, let them see what their money gets them (this way you can build it up again in stages, sometimes people just need things broken down)
Single service or a-la-carte?
So what to do?
Do you supply a single holistic service or allow your customers to pick and choose. Well there's good and bad points for both. Holistic may be much easier for you to provide, as all your customers are getting the exact same provision and all aspects of business from marketing to accounts are singing from the same hymn sheet. However, as we've said above sometimes holistic services may hide some of the value they hold and it may be harder for customers to understand pricing or what they're getting. Also with holistic you run into the people who don't want that bit and could you take out that feature this month…. Yada yada yada.
Allowing customers to pick what they want gives them the feeling of control, and they don't seem to mind paying the extra 30p every month for an extra feature when they've chosen it themselves, and not had it forced on them in a package. This way they can account for what they're getting and they can easily associate the value with each individual offering. It also allows tailoring for specific business needs and from your perspective when you break down all your offerings and price them individually, you'll actually find your profit will increase because some features that just get ‘thrown' in to bulk up or make a single package offering more attractive, now has its own price tag. Obviously though, breaking everything up and designing tailored packages takes a bit more effort on the employee front and it can be a little bit more difficult to manage.
Bundles are perhaps the middle ground needed! Design a gold, silver and bronze offering of your SaaS so you're still giving customers the ability to choose and offering different budget choices that clearly reflect differing features, but this way you are still in control, it just means you now have three holistic packages now rather than one… tripling your market appeal
What do SaaS customers want?
The thing to remember about your customers is that they're not all computer geniuses! What they want is to know what they're getting in plain English. It's important to remember that for your customers, service is often much more important than the features themselves. If you do want to showcase how great your features are, you should do so in terms of the relative business productivity that these features offer your customers!
Tec guys can tend to get too hung up on features but what the clients really want to know, is how these features increase efficiency and profitability
You (and I don't just mean the marketing people) should talk to customers in real terms that they'll understand, don't baffle or overwhelm with jargon because it'll just put them off ringing back, and let's be fair most of the stuff can be reduced down to pretty idiot-proof instructions.
If someone does want a more techy answer then go for it, but 9 times out of 10 people want to understand what they are being sold without feeling totally lost. It's to your benefit to make your customers feel confident in and fully understand what you're supplying them with!
Security and privacy are constantly coming up in surveys as being the big issues that consumers have when online. Listen to this research!! These people are your customers so listen to what they're saying and offer them a solution in your service… Worried that emails containing viruses are entering your inbox… we can stop them before they get there and keep you protected!
You need to reassure your customers too of data protection and that their details and email is safe in your hands as this can be a big issue for them, particular if your end-users are working in health, legal or government professions, so make sure they're comfortable dealing with you! Some businesses also feel that admitting to outsourcing data works in their favour, ‘we provide much higher security by outsourcing data'.
The important thing is to work out what's right for you and for your customers!
So… when your selling SaaS
So, in my opinion the best thing to do when you're selling SaaS to the end-user is to climb off the techy high horse and get back to basics.
Customer's should be able to know what your service is doing for them in the plainest of terms, this jargonless approach will also be much more market friendly, meaning if your customers see and understand your value fully they will spread the word much more quickly!
My advice, find the least techy person in the office and let them explain to the customer what you do and how you can help them, they'll appreciate this much more than being left more confused than before they lifted the phone! It makes sense! And remember don't allow yourself to be ruled by price, rule your price by your value, and depending on your customers work out whether the bundle strategy could work for you!
At this point I was going to go on and talk tactics but eh I've kind of rambled on quite a bit already so I think I'd best give you a chance to digest these ramblings and leave Selling SaaS Part 2 Tactics for another day!