Time to bring in that $$$
You do have an awesome product and a great team to take care of it, but it is now up to the Sales Team to bring in the revenue. Let’s see how Sales works in SAAS.
There are two major sources for revenue in a SAAS company: Hunting (acquisition of new businesses) and Farming (up/cross selling with existing customers as leads). To understand both, we need to first know what Lead Generation is and how it works. Let’s take a quick detour and know what it is.
Lead generation is the process by which, after identifying your target audience for the product, the details of individual companies is gathered. This in turn is split into two – Outbound and Inbound. The difference major difference in these two is that in the former, you go ahead and find leads while in the latter, a need is created with the help of marketing team so that leads sign up for your product. The most popular sources for outbound approach are getting paid lists of leads from third party vendors or LinkedIn whereas sign up forms and website visitors are the primary sources of leads for Inbound. Also, Inbound approach is more suitable for bringing in the SMB side of the market.
We have the data and we know whom to contact. Now, each one of these leads will be assigned to sales executives who then do a fitment analysis. In simple terms, they make sure that the requirement put forth by each lead matches what the product can offer. Leads crossing this stage become prospects, who then get educated on the different functionalities available. If the prospect is satisfied with the solution offered and product pricing, they subscribe which makes them a ‘Customer’. Theoretically speaking, the sales cycle ends here but we also need to make sure that the customer is comfortable with the product. To make sure this happens, every SAAS company will need an Onboarding Team to help the customer understand in depth about the product and its scope, and help them build their solutions. This, in a way overlaps with the responsibilities of Customer Success team but let us have a look at it in the next article.
In case of farming, the process is pretty much the same and the only difference is that the existing customers replace leads. Depending on the number of products scope of expansion offered, executives upsell or cross sell.
*This article is to give the readers a basic understanding of how sales works from the views of a person who has been in the Product industry all their career. If you find something wrong, feel free to drop in a comment. Suggestions are always welcome!