Funny story: had the chance, a few months ago, to get an American “influencer” on the phone. In this case, “influencer” means someone with a lot of followers on all the social media platforms — but not necessarily any revenue stream outside of speaking or maybe writing. The influencer was trying to get a company going. I asked him about it and he bellowed back, “It’s a SaaS play!” (Software as a service, if you’re not familiar.) This guy had almost half a million Twitter followers, had written a book, etc. He pounded the pavement on this SaaS sales idea for a few weeks, maybe a few months, and then he stopped. Last I heard, he’s teaching somewhere.
It all brings up an interesting idea about SaaS products, though: aren’t they supposed to sell themselves?
That’s what we’ve been told, and it’s in this article called “If SaaS products sell themselves, why do we still need sales?” from Andreessen Horowitz.
The conventional SaaS sales model
Typically, this is what happens with SaaS: there are models around “try before you buy” and “freemium” (basic applications) to “premium” (more powerful applications), and these models usually lead to fast initial growth. (In the article linked above, they call it “viral” growth.) Many companies have this, even outside of the SaaS market. It’s great because you seem to know there’s a product-market fit and you’re scaling somewhat. But it’s what happens after that period which matters more.
Eventually, SaaS companies will need to sell to enterprise — and that can be a long, drawn-out process. Enterprise companies have a buyer journey, existing legacy technology, they have internal politics, and they have thousands of middle managers who want to feel involved in everything. And even if a SaaS company lands an enterprise client, they need to retain the business, they need to try and upsell and cross-sell, and they need to mine that client for potential referral.
And the answer is…
So yes, SaaS does need sales. It does not sell itself. If it did, my influencer friend above would still be generating revenue from that company instead of teaching a bunch of kids about marketing or whatever he’s now doing.
In the Horowitz article, they note that enterprise sales is about three questions:
- Why should I act at all?
- What’s your solution vs. your competitors?
- Why this vs. investing in another area of the business?
If you have compelling answers to all three questions, you’ll probably make the sale more than 6 in 10 times. The first bullet point above, by the way, is from the Challenger framework — which sees selling as getting rid of the status quo.
Bottom line here: if you have a SaaS solution and think it’s so good that you’d never need a real sales team, think again. You absolutely need a sales team — or, if you prefer, I can start cold-calling universities for you and seeing if they need a marketing professor.