8 Common SaaS Sales Mistakes
When a software as a service (SaaS) product is marketed incorrectly it sells less effectively. Fewer sales means less revenue. Improving the sales strategy behind a SaaS product results in higher conversion rates, increased income, and lower churn rates. Ensure the success of your SaaS product by avoiding the most common mistakes.
1. Lack of Advertising and Marketing
The idea that a product sells itself is a myth. Having a strong SaaS product makes sales easier, but does not guarantee sales. A high-quality SaaS product leads to more satisfied customers, an easier time demonstrating product features and function, and increased word-of-mouth leads. However, it doesn’t replace an effective sales team. Expanding a customer base via targeted advertising and marketing strategies is the best method for achieving high SaaS sales.
2. Ignoring Metrics
Ignoring metrics is a common mistake often made by early-stage startups. Focusing on growth and neglecting metrics can lead to operational issues. Carefully monitoring metrics can gauge whether growth is sustainable long-term or not. Metrics also help to target the most ideal and highest-value leads. With the help of a qualified sales team, leads for the most-likely conversions are identified.
3. Too Many Metrics
Measuring too many metrics can be detrimental to the success of a SaaS product. Measuring everything, but not extracting any actionable insights is counterproductive. Certain metrics, such as social media followers, total traffic, number of installed users, etc., measure aspects that lead to actionable insights depending on the goals of a business or product. Confirm that any metrics regularly utilized are instrumental to the goals of a SaaS product. If a metric isn't instrumental to the goals of a SaaS product discontinue measuring it.
4. Inaccurate Customer Information
A clear description of a SaaS product's target customer is needed to develop effective advertising and marketing strategies, as well as determine which metrics should be regularly monitored. Segmenting prospective customers leads to a wealth of actionable insights, such as which features should be emphasized in product demos, where efforts should be focused to land the biggest accounts, etc. Customer information, including skill, interest, pay, etc., are all necessary to develop a clear and concise customer profile.
5. Misrepresenting a Product
Dissatisfied customers, a high churn rate, and a poor reputation are all side effects of overpromising product performance, features, and function. Misrepresenting what a product is capable of can cause a variety of issues for an entire userbase. Ensure a sales team is trained well and is accurately describing the abilities of a SaaS product.
6. Neglecting to Consider Competitors
There are often several companies, in most markets, that provide similar solutions to a digital problem. Some leads may be looking into a specific type of SaaS product for the first time, but many prospective customers will already be using a competitor's product. This is necessary information for a sales team. Acquiring market share rests on the ability of a sales team to tailor the appeal of a SaaS product to its target demographic.
7. No Focus on Retention
In many cases, existing customers are the most valuable source of revenue. Losing focus on existing customers, while attempting to acquire new customers, can lead to poor retention. Whether a dedicated sales or customer service team, a SaaS product must be represented effectively. Limiting growth, ignoring existing customers often leads to a significant sales decline.
8. Not Evaluating Lost Customers
Whether poor retention practices or a missed sale, lost customers should be evaluated. Lost sales are a valuable source of information. It's possible the wrong features were emphasized or the wrong audience was targeted. Whatever the case, understanding why a prospect chose a different option paves the way for further refinement of sales processes.
Overcoming common SaaS sales mistakes is important to the success of a SaaS product. Whether a hard or soft sales strategy, knowing who the target audience is, the exact capabilities of a product, and determining the metrics needed for continuous success are all very important. Ensure the success of a SaaS product by correcting any areas a sales strategy is neglecting.