selling saas in the enterprise

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?


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)


• 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.


Presenter

Presentation Notes

http://a16z.com/2014/05/13/understanding-saas-valuation-primer/ http://www.forentrepreneurs.com/saas-metrics-2/

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


http://investor.salesforce.com/files/doc_financials/2015/Annual%20Report/Updated/Salesforce-FY-2015-Annual-Report-forweb_v001_n0jhq9.pdf

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


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


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.


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