Hey, this is Steli Efti with Close.io. In today’s video, you’re going to learn the
biggest difference between SaaS sales and all other types of sales and how to empower
your team to take advantage of that difference. So this morning, I was interviewed on a podcast
and was all about SaaS. I love SaaS. And one of the questions there was what is the biggest
difference between selling a SaaS product and selling anything else? And the really,
the one and only main difference between the two is that when you sell a SaaS product,
you might sell a customer once at the beginning of the relationship, but they have to be resold
every single month because they are paying for a subscription product in most cases and
subscription product that allows them to cancel any time.
So in SaaS sales, in stark difference to many other industries when you’re selling, you
can’t afford to sell to a customer that won’t be 100 percent successful with your
product. You can’t afford to sell to somebody where you think they have tons of money, they
want to give me that money. They think this product is great for them. If I have my doubts.
I don’t think that they are really going to use it. I don’t think that they’re
really going to get out of it what they want. But since they seem eager and willing to pay
me money as a salesperson, I’ll just take it. Let them use it for a few months, and
if they’re not successful with it, they can go somewhere else. That is an attitude
you can’t have in SaaS. In SaaS, you need to make sure that they’re going to be successful.
Only successful customers are worth selling to.
Unsuccessful customers – and we’ve talked about this before – unsuccessful customers
are going to kill your SaaS business for a variety of reasons, right? Unsuccessful customers
are going to require a ton of support, a ton of consulting and training, they’re going
to be complaining, bitching, and moaning., and then they’re going to cancel. And once
they’ve cancelled, they’re going to be going around spreading the bad word that your
product and your company sucks and nobody should use it.
These things are massive costs, right? There’s support costs. Training costs, consulting
costs. There is marketing costs, branding costs. There is morale costs. Nothing worse
for the morale of an internal team than having tons of customers scream and shout how bad
your product is, how bad your company is, how much it sucked to be a customer of yours.
That’s going to bring down morale dramatically. It’s going to have cost in terms of the
planning and the goal-setting and struggling to hit certain numbers because the churn is
much higher. It’s going to have true valuation costs, like a company with high churn versus
a company with low churn. Completely different valuations that are being applied and investments
that are made or an acquisition potentially. There is massive cost. Massive hidden costs
to selling to a bad customer or selling to a customer that won’t be successful in SaaS.
And that massive hidden cost that’s not always there in other industries, in many
industries, sales people only care about bringing in the customer, getting the cash, getting
the money, getting the order, and everything else is really none of their concern. And
not to say that that’s a good idea. I mean, that still will have hidden costs. Maybe not
as high, but still hidden costs when in reverse, if you’re in an industry where nobody cares
about the success of your customer and you do, you can really stand out and build a brand
that’s much more powerful. But independently from that in SaaS, you can’t afford to do
that.
Now, let me just kick my microphone over. The person that was interviewing me on that
podcast said, “All right, that makes sense. SaaS sales you can only sell to successful
customers, and other sales you might not worry about that so much. Well, then, how do you
coach, train, how do you empower, how do you ensure that your sales people within your
SaaS business are doing that? What do you need to do to get them to do that?” And
there are three components that I want to share with you in empowering your sales team
to take advantage of this knowledge and to not make this deadly mistake for your business.
The first thing you need to do is you need to educate them. You need to tell them what
I just told you. You need to educate every new salesperson and every salesperson on the
team again and again and again on the significance of success on this significance of only closing
deals with companies that are truly a great fit, that are truly qualified, where the question
has been asked, “Can we really help them, and can they really help us? Are we truly
a good fit? Is this the best fit for them? And the answer is yes. Only then do we sell.
Making sure that you educate them, you teach them, you teach them on the influence this
has on the valuation of the business and the value of the stock. Teach them on the cost
for support, the cost for marketing, the cost for everybody in the business. Ultimately,
the cost for the business and their job and not being around in a year or two from now
if you have massive churn as a startup and as a SaaS business. Teach them, educate them
on the significance and importance of it. That’s step number one. You have to educate
them.
Step number two, education alone is not enough. You have to demonstrate. You can’t just
tell people what to do. You have to demonstrate it to them. You have to show them. You have
to be a role model. Somebody on your sales team, either your director of sales, VP of
sales, or somebody in the leadership team at large, you as a founder, somebody needs
to demonstrate the type of selling you want them to do. Somebody needs to demonstrate
how to tell a prospect, “This is not for you. I’d love to sell you. I think you’re
amazing. But we’re not going to be the best tool for your needs, for your requirements.
Let me send you off in a better direction, because I care about your success more than
getting a quick sale if it’s not right. Somebody needs to demonstrate this type of
selling so that the sales team and every single individual on the team can see it and follow
suit and go, “All right, we’re not just talking about this. We’re really doing it,
and this is demonstrated to me so I know how to do it. I know how to follow this other
person, this leader, and just do it the way they do it.” So you have to educate people.
You have to demonstrate it to your team after you educated them.
And then the last step is you have to incentivize it. I mean, people will do, and their behavior
is going to be amplified in areas that you incentivize. So if you pay out commission
purely and only based on upfront revenue, then that’s what salespeople are going to
care about most. That’s what they’re going to optimize their results on. If you pay them
to a larger degree, which is what I recommend, on the revenue they bring in, but there’s
also a good amount that comes in the back end based on renewal rates or based on churn
rates, based on customer satisfaction, on expansion, anything that shows the health
of the account, not just that you closed the deal and it’s worth X, Y, and Z, but that
deal was a good deal. That customer stayed on. That customer expanded. That customer
renewed. Pay them another bonus. Pay them something on top when that is accomplished
so you incentivize your sales people to close good deals.
These are the three simple things. So what’s the difference between SaaS sales and normal
sales? In SaaS sales, you can’t afford unsuccessful customers. How do you empower your sales team
to only sell to successful customers? Well, you teach them how to qualify people, and
then you do three things. You educate them, you demonstrate to them how you want them
to do the job, and then last but not least, you incentivize quality and not just quantity.
You incentivize the quality and health of the deals they bring in and the quality of
those dollars they bring in and not just the quantity. If you do these three things, you
keep this in mind, you’re going to build a killer SaaS sales team.
All right, I’m interested to hear what your thoughts are. Leave some comments, let me
know. Share your experiences. Make sure to subscribe to the channel. There’s lots more
content like this. We can talk about tactic strategies, anything and everything you need
to know to build a successful SaaS sales team, and make sure to go to blog.Close.io and subscribe
to our blog. I’m going to see you very soon, and I hope that you’re going to have an
amazing day and go out there and crush it today.