There is no better time to sell SaaS than now. The market looks promising, with an estimated growth rate of 18% annually. With 99% of businesses using at least one SaaS solution, nearly 7 of 10 enterprises are ‘intermediate’ and ‘advanced’ users. And companies are allocating more budgets for SaaS services.
Industry-specific SaaS providers are especially thriving with focal markets and the ability to adapt to the needs of their clients more quickly. Yet the appeal of software sales also comes with looming challenges, from seemingly unattainable quota to customers resisting changes that come with technological advancement. This article will discuss some of the challenges and opportunities in selling industry-specific SaaS.
A Smaller Lead Pool
Industry-specific SaaS providers focus on solutions to niche problems of the niche enterprise. At some point, it can also feel like you may have exhausted your lead pool. What happens when you’ve converted your lead pool into customers?
Opportunity: First, work on scaling with your customers–grow as your customers’ businesses grow. A top priority of niche providers is to continue boosting the success of their customers. Second, consider expanding to similar niches where your SaaS tools are also relevant. Don’t be afraid to enter smaller markets in the same vein as your current customers.
Take inspiration from these winning SaaS marketing examples from the industry’s familiar brands.
Reaching the Wrong Target Audience
Stunted growth could be an indication of advertising to the wrong target audience. Reanalyzing your target description may help you narrow down who your target market is. As much as possible, get more specific. For instance, you may soon realize that you are selling to an entire buying committee with multiple stakeholders handling different divisions in the company.
Opportunity: Focus on having one-on-one conversations with your ideal customers. Listening to them can give you more information about your target customer profile. Learn how they use your SaaS tool. Identify the unique needs and challenges of the various divisions within the company. Identify how your software can provide solutions that would meet these unique challenges. In the process, you may better describe your buyer’s persona. Finally, learn to identify which decision-makers within that buying committee have more influence than the others.
Getting False Hopes from Unqualified Leads
SaaS reps who educate their customers find more success than those who aggressively try to close a deal. However, don’t fall into the trap of expecting leads to be more qualified when they ask for a free trial or a demo than those who don’t.
Opportunity: Amp up your lead scoring or lead qualification process. You can save money, time, and energy otherwise used on low-quality leads. Questionnaires and checklists can help in qualifying leads. Improve your lead scoring model to filter out demo users who may never be planning to convert.
Tip: Learn how you can drive more revenue with lead generation optimized for the SaaS market.
Sales Reps Find It Hard to Explain Your Solution to Prospects
Niche industries can be complex — managing more employees, operating across multiple time zones, locations, and such. Thus, industry-specific SaaS solutions can be complicated as well. These tools support a wide range of users, departments, and goals of the enterprise as a whole. Integration with other enterprise applications is also a must. Moreover, as the product is more complex, there may be no free versions.
Furthermore, it can be a challenge to train SaaS sales teams who will have a deep understanding of the product. Failure to provide vital information about the SaaS solutions can make it even harder for your customers to understand the value of your product. Unqualified salespeople can drive qualified leads away.
Opportunity: Invest in the training of your sales reps, starting with the foundational knowledge about the SaaS tool. Also, teach them how to obtain any additional information they may require along the way. Sales teams should be adept at answering questions, conducting demos that fit your clients’ needs, talking with the different decision-makers, educating and negotiating with prospects. Also, incentivize and retain trained sales reps to avoid the cost of staff turnover.
Understanding the Longer Sales Cycles
Patience and exceptional follow-ups are secrets to thriving amid an unusual sales cycle in SaaS. In particular, SaaS providers who recently launched their sales program may lack precise data on how long it will take to close a deal. It can lead to unrealistic expectations, unnecessary pressures, and unreachable quotas. Another problem is staff turnover that replaces team members who leave the company.
SaaS sales don’t happen in a single transaction. It can take weeks or months for the buying committee to approve the purchase. The complexity and price of the SaaS tool may further lengthen the sales cycle. By contrast, less complex and less pricey solutions will sell faster.
Opportunity: As it is harder to predict monthly and quarterly quotas and manage overlapping sales cycles, consider benchmarking to improve your expectations. Factors to consider include pricing, the complexity of the product, your niche industry, and your customers’ needs. It can take a while to understand the buyer’s process that you can use to set more realistic sales targets.
Leads Lost In the Long Sales Cycle
As it can take multiple decision-makers longer to approve the purchase, leads can get lost in the coming weeks, months, or years. The problem is not much of having a limited lead pool but a poor lead follow-up. It can be tempting to ignore leads when they are seemingly not ready to make a purchase decision.
Opportunity: Encourage your sales team to nurture leads every step of the way in their buyer journey until they are ready to take that crucial step. Consistency is the key to the long sales cycle of the SaaS industry. Avoid neglecting leads by having a system of following-up leads over time. Help them along the sales pipeline by addressing concerns, educating, and adding value.
Lack of Compelling Content to Convert Leads
Niche-specific SaaS buyers are more than willing to be educated. They want to read case studies, white papers, original research, and blog posts. They also consume how-to videos and content that address the questions they have. Moreover, at every stage of the buyer’s journey, they will have varying concerns. It is important not to overwhelm them with the information they do not need at the onset but may want to know later on as they understand more about the solution you offer and the value it provides.
Opportunity: Engagement with your prospects make it easier for your sales team to hit their quotas. But first, you need a library of content that will add value to your customers at every stage of the buyer journey. Map out relevant content at the awareness stage, then at consideration, and finally at the decision stage. Having the right content and the timely delivery of this information to the correct prospects will better prepare your buyers to be sales-ready.
Dealing with Resistance to Change
One of the reasons why enterprises take longer in the sales cycle is the fear of change. They have used their systems for a long time and invested time and money in them. Asking them to switch to a more effective and dynamic solution, yet more complex can be a lot to ask. Moreover, SaaS solutions that require organizations to require their existing vendors to adapt to the new system will also take it slow for fear of damaging their relationships.
Opportunity: Reach out to the primary system users who may better understand the solution your SaaS tool is offering. They can help you better work with the key decision-makers since they recognize how much the solution will save them. Let your prospects use product trials so they can give first-hand testimonials on how your SaaS tool made their work simpler, more secure, and less costly in the long run.
Converts are not Using the System
Even if they said yes, users might not have fully utilized the SaaS tool. Without experiencing the full benefits of the SaaS tool, the user might stop using your product. That will affect your client retention reputation. Find out if this situation becomes the bottleneck for users, causing them to abandon using it.
Opportunity: Focus on establishing a great user experience from the onset of onboarding. Manual intervention may be the missing element. Be there to assist them in reducing the pain of adopting the new software. Make the pain of staying less uncomfortable than the pain of change.
In the process, you are helping your customers understand the product in person. Also, you may detect any complications in your UI that will need refinement to fit your market better. Work on establishing personal relationships with the customers. It can support the lifetime value of your customers and bring in referrals. An effective strategy in client retention is listening to customers and building features that cater to their needs. Add in customer support such as live chat to improve the overall customer experience.
Before You Go
SaaS sales require a strategic approach that should be intentional and consistent. As you overcome challenges, growth and innovation are inevitable. Finally, remember that SaaS relies on customers continuously using and benefitting from the software over multiple contracts.