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Selling SaaS In The Enterprise& the transformation of sales organization
Confidential - Do not duplicate or distribute without written permission from Author
Agenda• SaaS causes a drop in revenues
• Key Challenges & Issues
• Case Study (salesforce.com)
• What to do?
Confidential - Do not duplicate or distribute without written permission from Author
SaaS causes a drop in revenues
Perpetual SW license Monthly SaaS Revenue
Traditional Sales Methods
Success = More deals
HELP?
Modern Sales Guess What? Selling SaaS in the Enterprise. B2B sales has a very high CAC
Cost to Acquire Customer (CAC)
Confidential - Do not duplicate or distribute without written permission from Author
• Company A, which is spending $6,000 to acquire the customer and billing them at a rate of $500 per month, doesn’t break even on the customer until month 13.
• Incurred almost all its costs to be able to acquire that customer in the first place — sales and marketing, developing and maintaining the software, hosting infrastructure — up front. The timing of revenue and expenses are misaligned.
• Income statement alone therefore can no longer tell us everything we need to know about valuing a SaaS business.• The customer often only pays for the service one month or year at a time — but the software business has to pay its full expenses immediately.
• The key takeaway here is that in a young SaaS business, growth exacerbates cash flow — the faster it grows, the more up-front sales expense it incurs without the corresponding incoming cash from customer subscriptions fees.
Growth hurts (but only at first)
Source: http://www.forentrepreneurs.com/saas-metrics-2/
P&L/cash flow trough gets deeper if we increase the growth rate for the bookings.
Confidential - Do not duplicate or distribute without written permission from Author
Case StudySalesforce.com 2015
Revenue $5.37 B
At an Opex M&S $2.75 B
Overall Results ($213) M
The More you spend on M&S
The More you Sell…
Bigger the losses
Source: http://investor.salesforce.com/files/doc_financials/2015/Annual%20Report/Updated/Salesforce-FY-2015-Annual-Report-forweb_v001_n0jhq9.pdfData used here is for presentation purpose only and referred from saleforce.com financials/2015/Annual%20Report
Confidential - Do not duplicate or distribute without written permission from Author
What to Do?
Source: http://futureofsalesisnow.com/
HOW?1
2 3
4
Expanding with SaaS Model
• Focus on Traditional sales Funnel
• Success take place in later stage
Build Around Buyer’s Journey
• Recognize Need• Evaluate options• Buys it• Deploy• IS Successful
• SEO• Peer reference• Social Media• Sales superstar
Redefine sales funnel
Use Cloud• Content • Organization• (Hire, Train, compensate and organize)
in flat structure• Methodology• (Trust, Provoke, & Consult) • Leverage Social Media
Confidential - Do not duplicate or distribute without written permission from Author
Expanding with SaaS Model
Leads
Leads
Leads
Lead
sIn
side
sal
es
Opp
ortu
nitie
s
Field Sales TeamMarketing
Cont
ract
Rev
enue
Sales Ops Customer Success Customer Success Customer Success
Year one Year
TwoYear Three
Year Four
SaaS Model. Success take place hereEnterprise Sales
Recognize NeedEvaluate Option Buys it Deploys
IS Successful
Confidential - Do not duplicate or distribute without written permission from Author
Successful SaaS Sales Strategies• Keep Trial short (Longer trial = Longer deal cycle)• Target Marketing
• Semi-personal: Automated emails• Events Driven: Signup, Trial end, • Call to Action oriented: Schedule a call etc….
• Call quickly- call as soon as somebody signup• Demo benefits vs features: Focus on what’s relevant
• Ask Open question and how enterprise can solve real business problem• E.g. Here how soft dial works, CPQ• Demo values vs teaching functionality
• Set your price ( $nK+ CLTV)• Discount lightly ( only for annual pre-paid customers)• Never close bad deal ( train sales folks to identify quality of leads)• Customer-centric selling- This helps in age of social media (Building trust
over time by working together leads to solving more complex problems.)• Sell Solutions, Not Products• Manage Ongoing Relationships- Customer success team• Map the Customer Journey (KPI that are important to your customers, measuring success against
these metrics.) Be their partner along the journey, guiding them from the basics to more advanced capabilitiesConfidential - Do not duplicate or distribute without written permission from Author
Addressing big CustomerObjective: getting companies to sign off on large deals.• Have dedicated sales team• Generate qualify leads - Fields sales + Inside sales• The Average closing time is 6-9 months• # of potential customer is much lower• Land and Expand is far from the truth for enterprise. Strong enterprise sales
is critical to capturing market share.
Confidential - Do not duplicate or distribute without written permission from Author
Naman RavalManagement Consultant- Fortune 500 Business consulting companyOver 9 years of experience in Product development, Product Marketing, pre sales and post sales, CRM, Channel strategy, Digital, IoT, Payment industry
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