This blog is written for aspiring SaaS founders and takes a look at the sales process to position your B2B SaaS solution. It provides advice on the tools and practices needed to be successful and insights on what works well.
What is B2B SaaS?
Put simply, B2B SaaS is web-based software which is sold to businesses as opposed to private consumers. Because B2B software is sold across whole departments within a business, the sales cycle is typically longer than selling to private individuals because multiple stakeholders need to be involved in the buying process. Some examples of B2B software companies are HubSot, Salesforce and Slack.
Data from Statistica shows that the total end user spending worldwide for all SaaS applications grew from over 31 billion USD in 2015 to over 145 billion USD in 2021. In the future, the SaaS market is projected to continue its strong growth.
Typically, B2B SaaS sales are more complex and more expensive than B2C software sales and often involve the salesperson bringing specialists and engineers into the sales process.
How long is a SaaS sales cycle?
According to Hubspot, the average length of the sales cycle is closely correlated with the annual contract value:
“The length of a SaaS sales cycle varies depending on the annual contract value (ACV) of a deal. The average length of a sales cycle is 84 days regardless of the ACV. For an ACV of less than $5K, the cycle will last around 40 days. If the ACV is upwards of $100K, the cycle will last 170 days — around five and a half months.”
A word of warning
Before you start developing your SaaS solution, engage asap with your target market to understand whether there is a need for your offering. Data from CBINSIGHTS shows that one of the top reasons for startups failing is lack of market demand.
I urge you to get in front of your prospects now and ask them about their needs and wants. You will probably be surprised by their response.
How to sell SaaS B2B: The Process
Your first step is to develop buying personas for the people who will likely buy your solution.
Developing buying personas is important because these inform both your approach to marketing channels and content creation. According to huble digital, developing buying personas involves answering the following questions:
There is no shortcut to this. You have to get out there and interview and observe your audience.
I would recommend using the Is it Real? Can We Win It? Is it Worth Doing? (R-W-W Framework) to understand if the problem is real and whether you have the resources to develop a solution, whilst making a decent profit by doing so. The Harvard Business Review provides an excellent overview of how the R-W-W Framework can be applied to your business.
“Minimum Viable Product” or MVP is a term coined by Frank Robinson and popularized by Eric Ries, founder of the Lean Startup methodology. According to Ries, an MVP is:
“the version of a new product that allows the team to gather the maximum amount of proven customer knowledge with the least amount of effort.” Source
The whole point of a MVP is to get feedback from your audience, by being able to show a minimum level of functionality. This is a crucial step before developing a full-blown product.
According to myva360 there are seven routes to creating a MVP:
See here for a full explanation of these routes.
For example, instead of developing an all-singing, all dancing piece of software, you could just produce a demo video which talks through how the software would work and the problems it solves. I cannot tell you how many founders waste precious money developing a full product only to find that there is no market.
Ask yourself if there are conferences and events where your target audience hangs out. Given that you sell in the B2B space, LinkedIn should be your focus in terms of online sales and marketing. The add-on Sales Navigator Module is a great way to create targeted lists of your ideal customer, allowing you to filter on many variables, including job title, level of seniority, keywords, and geography.
Once you have created a list of your ideal customers, you can start contacting them via LinkedIn messenger to begin a conversation. Look for things you have in common, such as same industry experience or mutual acquaintances. Above all, do not send out generic, spammy messages. I am sure you have all received these and hate them as much as I do. Remember: the idea is to exchange information and not to sell straightaway.
Many Saas founders, especially those ones from a technical background, resort to talking about the features of their product. Instead, focus on the benefits of what you offer to a specific buying persona. For example, if you have developed a software solution that automates invoice processing, your positioning will vary depending on the buying persona. For example, if you are presenting to an end user, focus your benefit proposition on the time savings and reduced stress associated with using your solution. Whereas, if you are presenting to a senior executive, focus on the cost-savings and impact on the company’s bottom line. This is why it is important to have completed buying personas in the first instance.
A key part of your positioning is explaining your USP, or what makes you different versus the competition. This could be related to your product or company values/culture.
Here’s an overview of some of the most common differentiators, taken from simplybusiness.co.uk:
To identify your unique selling point ask:
The fact is, as a founder, even if you are scared about selling, you need to get out there and win your first clients yourself. This is because these conversations and interactions will be incredibly useful to understanding your clients’ pain points and motivations.
Crucially, you will only get to Product Market Fit (PMF) by getting feedback from these meetings and interactions. Indeed, your positioning and messaging will change as you hone your offering to focus on your audience’s core problems.
Hiring a salesperson before you have achieved PMF is a waste of time and money. For a new hire salesperson to be successful, you need to educate him/her on how to position your solution, how the lead generation strategy works and which sales process to follow. The best way to educate them is to have worked all this out yourself.
According to Marc Andreesen, who is often credited with coming up with the term, Product Market Fit (PMF) means discovering a good market with a product capable of satisfying that market.
You will know that you have reached PMF when your customers “get” your product and gain real value/benefit from doing so. What’s more, they share their positive feedback with their friends and contacts.
In their excellent book, T2D3, Stijn Hendrikse and Mike Northfield provide a 10-point checklist for confirming whether you have attained PMF:
Once you have achieved PMF in your market segment, it is time to scale your sales and marketing efforts.
How do I go about sales and marketing? For early stage-startups this subject is a real headache because it means learning new skills and finding the funds to execute both efficiently and effectively.
One place to start is content marketing, which means creating videos, blogs, ebooks and posts which address topics of interest to your target audience.
Stijn Hendrikse and Mike Northfield emphasise the importance of content marketing, citing its importance to:
When producing marketing content, put your target audience centre stage. Write content which answers the important questions they have and the problems they face. The key with content creation is to just get started and write. The more you do so, the better you become.
One powerful tip for you is to re-read your content and, wherever possible, replace “we/us” with “you”. Your prospects care about themselves and what’s in it for them. By using “you” more often, you automatically create empathy by putting their concerns at the heart of what you write about.
You are selling B2B software solutions. This means you need to be interacting and sharing useful content on the the world’s preeminent social network for professionals: LinkedIn. Put simply, LinkedIn is the most up-to-date B2B outreach list available and an indispensable tool for growing your business.
In addition, other social media platforms, like Facebook, are making it harder for businesses to gain any traction without spending a lot of money. LinkedIn, by comparison, still has decent organic reach, without having to spend huge sums of money.
Did you know that LinkedIn had 690 million users in 2020, representing over 57 million businesses? You simply cannot ignore this platform!
From experience, most LinkedIn users struggle to understand how to fully leverage the technology and the add on package, Sales Navigator. They often have poorly completed personal and company profiles and do not post content regularly. They barely scratch the surface in terms of what LinkedIn can do.
I would recommend getting some training asap on how to use LinkedIn as it is such a powerful tool for building a funnel of qualified leads. Invest in a decent book on the subject and apply what you learn. I can recommend Sam Rathling’s “Linked Inbound”, which is a refreshingly clear and a practical guide on how to get the most out of LinkedIn.
A key tool to generate inbound leads is your lead magnet. In simple terms, the way a lead magnet works is as follows:
1) you create some premium content, such as an ebook or article, which addresses some of the key pains points your target audience faces.
2) you create a landing page in WordPress or Hubspot, which contains a short form (usually a minimum of email address) to be completed in return for accessing your ebook or article.
3) You promote the landing page on LinkedIn and other social media platforms. (You will also need to spend some money on GoogleAds to target the key words for your offering).
4) Once you have your target audience’s email, you can nurture your leads via an email campaign. This is important because most of your potential clients are not in buying mode when you first engage with them. By sending them regular emails to maintain visibility for your solution, you ensure you are on their radar when they are ready to buy.
Probably the most important sales and marketing asset in your arsenal is your website. Your website is your shop window, and it is crucial that you communicate your value proposition clearly on your homepage. Too many websites for SaaS companies are visually too busy, lack a clear call-to-action (CTA) and use lots of “techno-babble” or language that no one really understands. State clearly who you are, who you help and how.
A CTA is a clearly stated action you want the visitor to take, such as downloading a guide or scheduling an introduction call. Given the sheer amount of market noise out there, try and use a colour and design on your website which stands out, but is in keeping with your target audience’s style.
In his new book, They Ask You Answer, Marcus Sheridan recommends that you take a client-centric approach to everything on your website and all content you produce. He explains that there has been a recent sea change in the way your customers make their buying decisions. One shocking statistic he cites is that on average:
“70 percent of the buying decision is made before a prospect talks to the company.”
This means that we must be better at helping our clients find out about our solutions and products. We need to answer their questions and handle their objections upfront if we are going to be successful. To that end, your website should focus on answering their questions and educating them on the different options open to them. Produce video and written content which addresses the “Big 5” key concerns:
For further information on how the “Big 5” relate to your business see here.
Hopefully, your sales and marketing efforts have paid off and you have your first meeting scheduled with your prospect. Many founders are understandably nervous and go to where they feel most confident: demoing the software.
However, the demo is normally the side dish in terms of your first meeting.
Contrary to what you might think (and what most salespeople do) the prospect should be talking most of the time. The aim of the first meeting is to:
This guide provides some useful advice on running successful meetings.
When you get to the demo, focus on showing those pieces of functionality which address their main pain points. You do not need to show every single piece of the software as this will often overwhelm the audience.
My observation is that most demos run out of steam after about 5 mins. Therefore, aim to spend about 5 mins demoing and then leave some additional time for questions.
A good approach to adopt is to tell a short story, focussing on the typical tasks the attendees might need to run. Use “you” when telling the story to build empathy and rapport. For example: “As a risk manager, you need to get a clear overview of your factor exposures. By clicking on the overview tab you see an instant heat map across the different exposures.”
When running your demo, keep a measured pace and pause regularly. Make eye-contact with your audience and ask: “does this make sense?” or “is this clear so far?”
Do not automatically assume that the next step is a trial period of your software. And do not offer a trial unless your prospect asks for one. Too many times, I have come across the never-ending trial, where, for various reasons, the trial is extended. This is a delaying tactic and, in some cases, an attempt to get value without paying.
Instead of immediately offering a trial when asked, I would recommend, asking your prospect to clarify what the exact purpose of the trial is. Get them to be specific on what they want to achieve with the trial. Agree at the outset, what these criteria are in writing and who needs to be involved with the trial process. Ideally, this will take the form of a list of questions, which can be answered with a “yes” or “no”. For example; “does the API work with our other systems and applications?” or “Can we replace x, y, z manual tasks using the software?”
You also need to agree on a strict timeline for the trial and ask them when they will have sufficient time to fully engage and test it. Typically, a 2-week trial is a good rule of thumb as this keeps all stakeholders focussed.
During the trial you need to be proactive and reach out to the testers regularly to check whether they have any questions and to provide insights on how best to use it.
At the end of the trial, schedule a follow-up meeting and confirm that you have answered all the criteria questions. If you have done this correctly, moving to closing the sale will be the logical next step.
By following this process you will have a clear roadmap to sell your SaaS solution. Now you have an edge over other SaaS founders and will be well on your way to gaining traction and winning your first customers.
With anything in life, success will not happen overnight, but will come by following this plan and making incremental steps every day.
My final piece of advice is to try and enjoy the journey of being a founder. You have made the decision to do something great. You are now the master of your own destiny. In the words of Jeff Bezos:
“We are our choices. Build yourself a great story”
I wish you every success with your venture!
Daniel Feander – Founder & CEO, salesmentor.