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Tag: SaaS startup

  • 5 Ways to Tweak Your Business’ Sales Process to Generate More Revenue

    5 Ways to Tweak Your Business’ Sales Process to Generate More Revenue

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    Opinions expressed by Entrepreneur contributors are their own.

    Is your sales process really helping your organization maximize its potential revenue? It’s a question well worth considering, especially when scaling your sales team. Complacency in sales can be problematic, to say the least — and failing to address known issues can be even worse.

    Regardless of the size of your organization, understanding the necessary adjustments to your sales process can go a long way in helping you land more customers and increase your revenue.

    1. Make demos focused on benefits — not features

    In their book Guerrilla Marketing in 30 Days, Jay Conrad Levinson and Al Lautenslager write, “The latest and greatest equipment means nothing to a prospective buyer unless that feature translates into lower costs, quicker delivery or something else of value. Being established 100 years ago means nothing to a prospective buyer unless that feature can be translated into a benefit of reliability and a guarantee of being in business in the future. […] Benefits sell. Benefits clearly answer customer questions, such as “what’s in it for me?” or “what results will I get that will improve my current situation?”

    This mindset is especially pertinent when offering a sales demo to a prospect. Focus on all the features your product provides, and you can easily overwhelm them. Demonstrate its true value and potential impact by focusing on benefits, and you reveal how it will solve their problems.

    Making your sales process focused on benefits requires extensive buyer research. But when your team understands the actual problems prospects need to solve, it will be far easier to make a successful pitch.

    Related: 5 Secrets to Winning More Sales

    2. Shorten the free trial period

    Many SaaS companies offer free trials as part of their sales process, the idea being that giving prospects hands-on time with their software can be the most compelling sales pitch of all. This is true — to an extent. Most SaaS companies average around a 25% conversion rate from their free trials.

    While that conversion rate is certainly good, it can be improved upon. One common pitfall is that providing a full month for prospects to test the software can actually be too much time. This can reduce the sense of urgency, especially among prospects who simply want to get a closer look to see what your solution provided.

    Instead, offering a shorter trial period (such as seven to 14 days) can create that sense of urgency that drives prospects to actually use their free trial. This can encourage a deeper dive that makes them more likely to convert.

    3. Use CPQ (configure, price, quote) tools

    One of the best ways to enhance your sales process is to use a CPQ (configure, price, quote) tool to streamline your team’s ability to generate accurate quotes for prospects. These programs use automation based on a set of rules preprogrammed by your company, such as acceptable discount thresholds, product customizations and other factors.

    In a DealHub case study, one company was able to increase its average deal size by 15% while decreasing quote and contract errors by 95% by using a CPQ to enact automated pricing mechanisms. By preventing pricing errors and ensuring consistency in the quoting process, your sales team will have an easier time following pricing standards and guidelines so they can close deals faster and achieve appropriate revenue earnings.

    4. Offer additional plan options

    Most SaaS providers offer monthly plans, as lower prices and the lack of a long-term commitment can seem more customer friendly — in fact, it’s estimated that 70% of SaaS companies only offer monthly pricing options.

    In reality, you can improve your sales process simply by also giving customers the option to choose from annual pricing plans. An annual plan can lower customer churn and increase their lifetime value by ensuring that they will remain customers for an extended period of time. This will also improve your organization’s cash flow and make customer acquisition costs more manageable.

    Many of the most successful SaaS platforms understand prospects’ potential reluctance to sign up for a yearly plan and counteract this by offering a discount for annual plans. Providing more options (and offering the right incentives) can lead to more conversions and more long-term sources of revenue.

    Related: 6 Super Simple Tricks for Closing Way More Sales

    5. Focus on your existing and former customers

    It typically costs between six to seven times as much to acquire new customers as it does to retain existing customers. Needless to say, your sales team should be dedicating a significant amount of its processes to how it will generate more revenue from your current customers.

    One of the best ways to do this is through upselling or cross-selling. For example, if your business offers multiple subscription tiers, you could upsell a customer to go to a higher-paying tier.

    As with the initial sales pitch, upselling and cross-selling pitches must be tailored to the individual needs of the client. This time, however, your team has information on past interactions and how they are using your current services, making it easier to custom-tailor the pitch. Increasing the lifetime value of existing customers can be far less cost and time-intensive, and has higher odds of success.

    Creating a better sales process

    By following these best practices for enhancing your sales process, you ensure a better experience for prospects and customers, as well. This doesn’t just help you close more deals and earn higher revenue off the initial sale. It helps ensure that your customers will stay with you for the long haul — which will perhaps have the biggest influence on your lifetime revenue of all.

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    Lucas Miller

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  • Hack Your SaaS Growth With These 3 Easy Strategies

    Hack Your SaaS Growth With These 3 Easy Strategies

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    Opinions expressed by Entrepreneur contributors are their own.

    Contrary to popular opinion, you don’t have to build an audience before you launch your SaaS business. SaaS affiliate programs give access to other people’s audiences. You will access tons of early users in a few weeks that would otherwise take years. Of course, it comes at some costs that this article aims to help you get ahead of.

    SaaS affiliate programs work so that when an affiliate refers a prospect that purchases your product, the affiliate gets a commission in return.

    Related: How SaaS Is Changing the Way We Work

    Three strategies to launch successful SaaS affiliate programs

    If you are planning to launch your SaaS or looking to grow your customer base fast and you’re short on cash supply and not a marketing fan, pay close attention to these strategies.

    1. Play the long game with your funnel and pricing structures

    Before deciding on your affiliate commission structure, you must determine your SaaS pricing structure and profit margin. Do you want one-time pricing or recurring pricing? Since we are all about hacking growth for a new Saas launch in this piece, a proven strategy is to combine both pricing strategies. Yes, it is counterintuitive!

    But SaaS entrepreneurs who have launched successful SaaS products at a nitro-speed mode know this is the secret sauce. The engineering of this strategy will be done in your funnel structure, where your affiliates will send traffic. Your front-end funnel will be a pay-once-access-for-life offer or lifetime deal (LTD). Lifetime deals are limited paid promotions.

    However, communicate and enforce usage limits or restrict access to certain premium features for the LTD package. Next, put a subscription upsell in place. This is very important to have to compensate for costs incurred in offering LTD. Also, remember that your recurring revenue has to outgrow your LTD revenue to keep the model sustainable. Here are a few tips to keep this on lock:

    2. Offer a limited number of lifetime accounts

    Use in-app prompts to nudge users to upgrade to a yearly subscription when they reach LTD usage limits. Use LTD customers’ first-party data to optimize advertisements for the subscription offer. You need a viral loop, as your LTD is a promotional strategy. This is where affiliates come in.

    Lifetime deals sell fast, and affiliates jump on it real quick. This fact is what the million-dollar SaaS LTD platforms and their vast affiliate network thrives on. When you throw in recurring commissions (on the back of the commission for LTD sales) to affiliates whose leads take up your subscription offer, you are in for a treat of quality leads.

    3. Find niche affiliates

    Next up is finding the affiliates that will form your viral loop. You have two options:

    1. Reach out and recruit affiliates. Think of this as making cold outreach to affiliates. So, where should you fire your cold shots? It’s best to start with blogs and review sites, content creators and influencers, online communities or brands with complementary products.
    2. Tap into an existing affiliate network. This is the growth hacking route. Of course, you have to be ready to part with some of your revenue.

    It is possible to launch on these platforms and have zero affiliate sales. This is where affiliate managers come in. They help you onboard the big whale affiliates and manage your launch in exchange for some percent of the launch revenue.

    Here are a few tips to ensure you get the best affiliates for your saas affiliate programs:

    1. Ensure they have access to your target audience
    2. Go for those who have experience promoting SaaS
    3. Verify that their traffic sources are genuine
    4. Ask how they intend to promote your SaaS to make sure your interests align

    SaaS marketing requires a lot of moving parts to achieve success. Hence, do some heavy lifting for your affiliates by providing them with marketing materials to promote your product.

    Your SaaS affiliate program promotional kit should include promotional email templates, a media kit, explainer videos, ad creatives, testimonials and case studies. You can support affiliates by hosting live webinars. All affiliates have to do is drive traffic to the webinars.

    The LTD offer in the hybrid approach to SaaS affiliate programs will give you the runway cash, the feedback and the marketing data you need to scale your subscription revenue quickly. At the same time, the recurring commissions keep your affiliates motivated.

    Related: A Quick Checklist for Building SaaS Businesse

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    Said Shiripour

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  • Why Are Founders Still Ignoring This Easy Way to Boost Profits?

    Why Are Founders Still Ignoring This Easy Way to Boost Profits?

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    Opinions expressed by Entrepreneur contributors are their own.

    It’s not every day that you stumble across a truly surprising statistic, but this one should shake any entrepreneur in their boots. The average SaaS company spends just 6 hours determining its pricing strategy. Now, that isn’t 6 hours every month or even every quarter. That’s 6 hours over the entire lifespan of a business. Ask any founder how long they spent choosing fonts and layouts or adjusting the logo’s size in the document’s header. The answer will, without a doubt, be orders of magnitude longer.

    Not devoting time to pricing means entrepreneurs miss out on a crucial part of optimizing their business. They already work to optimize everything else, and pricing strategy can significantly affect their company’s bottom line. The investment required to optimize it is minuscule relative to spending hours and wasting labor on choosing the perfect font.

    Related: How SaaS Is Changing the Way We Work

    A widely quoted Harvard Business Review piece published thirty years ago already made a case for optimizing pricing models, and still, founders haven’t caught up. In the article, aptly titled “Managing Price, Gaining Profit,” the authors assessed how much an increase in price affects the average company’s bottom line compared to an increase in volume. Price won out by almost four times as much.

    With such high leverage on price, even if a company’s managers are spot on in their pricing 90% of the time, there is a big payout for improving that to even 92%. Even though these results were corroborated years later in a McKinsey study, it seems founders are still coming up from behind on this issue. It also bears to note that pricing is a double-edged sword — if a 1% rise in price can improve your profits by a significant margin, then a 1% price cut can damage them.

    What is it that the price reflects?

    Companies often look at price as simply what the customer will be willing to pay, but that might be a mistake. That approach fails to consider the thousands of moving parts that need to seamlessly work in unison, almost like magic, to provide value. The price should reflect that.

    Researching pricing can be overwhelming because the sheer number of pricing models, strategies and tactics available is gigantic, so it’s almost impossible to know where to start. And frankly, there is no shortage of the mistakes you can make, i.e., pricing based solely on undercutting your competition, not segmenting customers, not trying enough price points, overcomplicating pricing presentation, and dozens more. But thankfully, in the world of tech, a conversation about pricing is brewing, and there are some surprising and exciting developments out there.

    One group of products notoriously difficult to price is legal cases. If a class action lawsuit has a 50% chance of reaching a verdict or settlement worth ten million dollars, the case has an expected value of five million dollars. However, valuations of commodified legal cases usually run on gut feelings and lawyers drawing from their own experience.

    Pricing and valuation is virtually a neglected field regarding the commodification of legal cases. An AI-powered justice intelligence platform called Darrow has seized on this and developed an algorithm that uses big data to value legal cases accurately. This platform finds a fair price and opens the door to a new suite of investment opportunities.

    As Software-as-a-Service is a relatively new concept, it makes sense to step away from old-fashioned pricing models. We’re no longer in the ’90s, and the SaaS buyer experience needs to reflect that. Software company Stigg, for example, has built software and API that gives companies fine-tuned control over what can be priced and packaged separately, helping businesses ship better plans to their customers.

    The irony of using software for pricing is that management will likely not spend more than 6 hours deciding between freemium, trials, subscriptions, usage-based pricing, etc. But at the very least, a program is doing the thinking in the executive’s place. Such software can serve executives particularly well today as companies cut costs, slow hiring, and search for ways to boost productivity.

    Thirty percent of CFOs are considering layoffs, and most expect a recession to come, according to a new Grant Thorton survey. Considering the state of the economy and rising inflation, companies can no longer afford to keep hires on board that aren’t holding their weight, and decisions to make certain pinpointed cuts make total sense. But sometimes cuts — especially in layoffs and reduced benefits — tend to hurt morale.

    Finding ways to maximize profit before resorting to cuts should be a top priority, and updating pricing is an excellent place to start. Pricing is too important to simply be left up to ad hoc decisions and gut feelings, and industry leaders would benefit from remembering that.

    Related: Don’t Try to Maximize Growth and Profitability at the Same Time. It’s Impossible.

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    Ariel Shapira

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