The German B2B market for SaaS is tricky, but if you nail it, it can be very profitable for you and your firm. It’s tricky because German buyers are generally very skeptical, even in SaaS sales plays. That means they tend to expect a personal demo or face-to-face meeting, and maybe the lowest execution you could get away with is a live webinar.
To sell SaaS in Germany and DACH nations B2B, you need a very personal approach. But that also creates problems.
The personal isn’t easily scalable
That leads to a higher customer acquisition cost (CAC) and longer sales cycles, which can be a drain on your revenue. You also need to be considering culture and language, which is time-consuming. If the expected model of SaaS sales is quick and revenue-boosting, it won’t always work that way in German B2B markets.
There are three main types of buyers you’ll find in German B2B SaaS:
Pro Users and small SMB: This is the most competitive section, generally, but also the quickest turn. Because there’s usually just a single decision-maker, you can get a faster, transactional sale in this section of the market. Purchases can be automated or semi-automated, which saves you time. The problem is: this section has the lowest annual recurring revenue (ARR), so it’s hard to consistently make your bones here.
Mid-Size: This is the most painful to sell in. You have more than one decision-maker, but they are not as savvy as you’ll see in enterprise; often they don’t know exactly what they want or need. It’s a much higher CAC than small businesses, although the ARR is also significantly higher. You might need some heartburn pills for those sales cycles, though.
Enterprise: This is the section that requires the most sales skills and relationship-building (although remember, relationship selling is not ultimately scalable on its own). You do have a high CAC, but a very high ARR. And then you get to the gold of German B2B work: the churn is very low. Because you have to jump through a lot of personal contact hoops to get the deal, customer loyalty in DACH countries is usually exceptional. You can retain the deal, and the high ARR, for years once you capture it. That’s the beauty of German SaaS B2B, although it does require a sales skill set to get that loyalty.
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So what now?
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