Sales function for SaaS vendors?

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Permalink Reply by Isaac Garcia on August 23, 2009 at 5:06am

37Sigs and Freshbooks rely entirely on word of mouth marketing. Entirely. 100%.

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Permalink Reply by Carl Schmidt on August 24, 2009 at 5:00pm

I've seen Freshbooks banner ads for sure, so it's not word of mouth *only*. ;-) I'm speaking more of the sales side instead of marketing.

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Permalink Reply by Dave Motheral on September 14, 2009 at 3:12am

I would not do direct sales. Put it on Salesforce Appexchange. Pull is a lot better method than push in SaaS.

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Permalink Reply by Dave Churchville on September 18, 2009 at 11:28pm

I'd say it depends on your target market. Where do they hang out? Online or mostly offline? Do they read specific publications, maybe even paper-based ones? Or are they 20-somethings, living entirely online reading RSS feeds and Twitter updates?

Match your marketing channels to what your customers are actually using/doing.

Without knowing a little more about your business, I wouldn't venture to guess, but I suspect for a niche marketing application that appears to traditional marketers, you may need to do a little more than word of mouth.

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Permalink Reply by Carl Schmidt on September 21, 2009 at 4:04pm

Thanks for your comments Dave! Absolutely no doubt that we'll need more than word-of-mouth *marketing*. My question was more around the *sales* function...

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Permalink Reply by Dave Churchville on September 23, 2009 at 1:48am

OK, I don't really separate sales and marketing in our business - anything that generates revenue is a good thing :-)

Word of mouth, Google Ads, banners, newsletters, blogging, social media, affiliate partners, online webinars, etc. are all tactics that help with the real goal - generating revenue.

So in my SaaS business, we don't use a dedicated sales force, but we use variety of marketing channels, and the sales side is more self-service (customers sign up for a trial, and can ask questions, etc.).

To my knowledge, for lower ticket items, most SaaS firms operate this way - it's difficult to support a dedicated outside sales force for a $20 per month subscription :-)

On the other hand, something like SalesForce.com or a higher end app like InsufionSoft that tends to cost upwards of $250 - $500 monthly for a typical customer can probably support a direct sales effort.

I'd say that your sales strategy to some degree is dictated by your price point. If your market is high-end, with a longer sales cycle, you'll probably need either a direct sales force or to partner with a reseller who can do "VAR" sales for you.

For more moderate pricing, maybe the marketing leads could be funneled to an information webinar or something, with a sales person followup.

Hope that helps.

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Permalink Reply by Carl Schmidt on September 24, 2009 at 5:18pm

That definitely helps. As with many things, I guess it all comes down to ROI. If your price point supports having a sales team, then you really ought to be able to generate positive ROI.

This is exactly what I was looking for, comments from someone who has direct experience running a SaaS company, thanks!

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Permalink Reply by Dave O'Flynn on September 25, 2009 at 12:28am

Depends on whether you're a volume business or not. If you want 100,000 customers, you're in a volume business, and using outbound sales to drive $600/year deals is a tough way to make money. If you focus on the marketing - for a broad definition of marketing - instead, you'll be fine. The best marketing is a kick-ass product.

Atlassian (where I work) does not do outbound sales. Most of our customers are behind-the-firewall, but we have a rapidly-growing SaaS effort too. We grow primarily through word of mouth - happy customers tell their friends, or bring us in when they move jobs. It's a solid, dependable way to grow a company, but it only works if your product rocks for *your* customers.

37signals focuses their marketing on content that's informative, useful, and opinionated - their books, blogs, and speaking do lots of marketing for them, and their happy customers do the rest.

Hubspot (inbound marketing, SaaS) also markets by producing objects of use or interest to their target community - twitter.grader.com, Hubspot TV, and the like.

If your price-point and adoption barriers are low, then people will try you because you seem interesting... and if your product rocks you'll grow.

Make sense?

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Permalink Reply by Max Johnson on September 25, 2009 at 3:15pm

the Architecture Journal 21: Service Orientation Today and Tomorrow

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Permalink Reply by Jeff Widman on October 7, 2009 at 10:37am

[Full disclosure--I DON'T have a SaaS business, but I do handle Facebook marketing for SaaS products like Mint.com (loosely SaaS)]

"Word of mouth" is something I've seen successful companies *actively* promote and manage... by manage, I mean they didn't control everything people said, but they worked hard to show up on the radar of relevant bloggers, their fans, etc.

That Signals V Noise blog by 37 Signals is a HUGE marketing effort. Allows them to spout genuine opinions, but also pulls in a lot of traffic through being controversial from time to time.

As Seth Godin says, go give away your expertise so that people view you as an expert. Then, when people want to hire an expert, they'll come to you...

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