SaaS is short for “Software as a Service”. It is a software distribution model in which a provider develops and manages a web application for customers to use through an online platform.
Customers do not buy or own the software product that they’re using. Instead, they make regular payments in exchange for use of the product. So, SaaS can be considered a software subscription licensing model.
SaaS Sales Process
There are two main strategies of SaaS sales that vary by the approach rather than whether they’re B2B or B2C, or other details.
1. The SaaS model with minimal personal contact suits the majority of customers and allows them to start using the product without time-consuming personal interaction with company representatives. In this case, the main sales channels are the official website of the product, email marketing, and social networks. A free trial is a huge benefit that often helps to boost sales.
2. The SaaS model with a strong personal touch is designed for cases where onboarding requires significant human resources – the sales team sell prospects on the benefits of the software, then customer success help to deploy it and keep in touch to ensure continuous use.
It is unlikely that both methods will serve equally well for any given SaaS products. In most cases, one method will have obvious benefits, depending on the complexity of the product.
Sales and Profit in SaaS Business
SaaS platforms don’t have a set value. The value of the business is closely tied to the recurring revenue that it generates.
That means that when the conversion rate increases by one percent, not only monthly revenue increase by one percent, but market capitalization also increases by a similar amount.