Strategy & Best Practices

How to Sell B2B SaaS: 10 Strategies for Success

By Ideas @ AppDirect / March 18, 2021

Cloud commerce has completely transformed the way people buy and sell almost everything. For businesses, the change has been dramatic, particularly when it comes to software. Procurement processes that used to take months can now be completed within minutes using a credit card and just a few clicks.

It may be easier than ever for companies to buy software, but that doesn't guarantee success for providers. In today's digital economy, software is sold, not bought, meaning providers must take an active role in educating, engaging, and supporting buyers.

Best practices for how to sell B2B SaaS effectively—especially in digital marketplaces—can be hard to come by, which is why we've collected 10 strategies that are being used by some of the world's most successful providers. Each strategy below contains important advice and tips, and taken as a whole, our 10 keys to selling B2B SaaS provide a practical roadmap to help you succeed.

1. Curate a small, highly targeted app portfolio

When you walk into a store and see the shelves stocked with products, it may seem like you’ve hit the jackpot; after all, the store is almost certain to have what you’re looking for. That experience for B2B SaaS buyers, on the other hand, is completely different. When there are too many apps in a digital marketplace, buyers will quickly become overwhelmed.

That’s why you need to start small with software that is highly targeted to your potential customers. By curating the choices that your buyers have, you are acting as an expert advisor, steering them to the solutions that will most effectively address their pain points.

Here’s the full approach—land, engage, expand—that you should take when building out your catalog of applications:

• Land: Start with two or three cloud services that are close to your core business, such as productivity suites or security apps. By sticking to these “anchor apps,” at least at first, you will be able to keep the value proposition simple. This makes it easy for everyone, both internal stakeholders and buyers alike, to understand your offerings and see their value.

• Engage: After you see initial sales, you need to create stickiness by driving customer onboarding and engagement. Keep your customers informed with webcasts, tutorials, and access to a knowledge center where they can go to learn more about their solutions.

• Expand: Once you see that your buyers are comfortable with the apps you offer, you can expand your catalog to include adjacent and / or specialized applications. For example, if you offer Microsoft Office 365, then adding a Symantec security solution for office productivity is a smart move.

As you evolve your software ecosystem with services that are targeted to different buyer segments, you can significantly increase the revenue generated by your marketplace.

 2. Build a compelling value proposition

Never take the value of your apps for granted. What may seem like an obvious benefit to you may not be as clearly understood by a potential buyer. Customers will understand the value of your B2B SaaS offerings when you clearly communicate why they are relevant to them and why they are different from competitive offerings.

Every strong value proposition must do three things:

• Resonate: Buyers have to want and need what you’re selling.

• Differentiate: Buyers have to understand why you stand out from other available options.

• Substantiate: Buyers have to believe that you can deliver on what you say.

Here’s how a major European telecom service provider, Swisscom, created a value proposition for a SaaS product that does just that. 

 How Swisscom Built a Successful Value Proposition

Swisscom offers a SaaS solution, HomepageTool, that allows customers to create a professional website that is as user-friendly on mobile devices as it is on a computer. Swisscom was able to successfully market and sell this product for several key reasons:

• HomepageTool is relatively inexpensive, especially compared to a web design agency, so the use case, benefits, and value were clear. The offer resonates.

• Swisscom developed HomepageTool in house, which means the product is exclusive to Swisscom customers. The differentiation of the offer is clear.

• Swisscom first gave customers a four-month trial with a bonus of 24/7 support, making it a risk-free offer. The company substantiated its offer with a promise to help customers use it.

Learn more about how Swisscom works with AppDirect.

3. Use “pull marketing” to generate leads

There are two basic ways to generate leads for your digital marketplace: push information to buyers and hope they visit, or offer information that will pull them in. Let’s look at these two approaches more closely.

“Push marketing" is essentially advertising. As it grows more sophisticated, push marketing may achieve its core objective—awareness—but it can also generate leads for competitors almost as effectively as for the company that’s footing the bill for the cost of advertising.

Given this, it’s not surprising that many companies have begun to try “pull marketing.” This method gives you the opportunity to pull buyers to your website or social presence by offering content— such as eBooks, white papers, blog posts, and other content—about the topic they want to know more about.

There are pros and cons to each approach, but generally speaking “pull marketing” is more impactful and cost-effective when it comes to attracting prospects in the early buying stage. It can also deliver a higher level of engagement because the prospect shows an interest and takes action without prompting from you.

Here’s an example of a push marketing campaign that failed to generate leads.

Missing the Mark with Billboard Advertising

Early in its cloud commerce journey, German telecom giant Deutsche Telekom launched a campaign for its marketplace that featured billboards placed in airports. While the ads did work to boost generic awareness, they didn’t target specific buyer segments or explain the value of the app store. The campaign drove a significant amount of traffic to the Deutsche Telekom marketplace, but much of it ended up being unqualified and failed to drive any significant revenue.

4. Bundle apps with core services, not other apps

Buyers love a good deal, which is why bundles are always popular. When it comes to B2B SaaS, however, multi-app bundles often complicate both the sales message and the sales cycle.

Instead of bundling apps together, a better approach is to package apps with your core services. For example, a telecom provider packaged a mobile broadband subscription—a core service—with a tablet device and Microsoft Office 365. This bundle generated 1,500 active users in only a few months.

On the opposite end of the spectrum, another large telecom provider offered a package that included several apps—including Office 365, Symantec, Teamlike, and Teamdisk—with its onboarding services. However, the bundle attempted to solve too many challenges simultaneously, making the offer too complex and the business use unclear.

As a result, many customers asked the telecom company if they could “unbundle” because they already had some of the apps offered in the package. When you leave your plan open to negotiation, it creates a complex, inefficient sales process.

5. Use a human touch to sell

We have been programmed by consumer devices to believe that apps will sell themselves. When it comes to B2B SaaS, however, it’s simply not true. Buyers need human assistance. Even when a digital marketplace offers a small, targeted app portfolio, more than 90 percent of first-time sales occur through offline channels, like call centers and field sales.

A cloud marketplace is still essential, however. These online stores can drive qualified leads to your sales team. Moreover, many customers will make additional self-service purchases once they feel comfortable using a marketplace, making the combination of online and offline channels a way to establish a solid foundation for organic up- and cross-sell opportunities.

6. Don’t just sell features; sell holistic, customer-centric solutions

Selling SaaS requires a different mindset. Instead of ticking off speeds and feeds, sales teams need to put potential customers, and their challenges, first. That way, a sales professional can identify the best apps, or app bundles, to address these pain points.

When a customer understands the value that they are getting from their applications, a salesperson becomes a trusted advisor, a key factor in reducing customer churn, and driving future up- and cross-sell opportunities.

To sell SaaS effectively, it is crucial to:

• Listen first. You need a thorough understanding of who the customer is, what their business is about, and what their business pain points are. This will help you find the right solution to fit the right business challenge.

• Communicate clear return on investment (ROI) and total cost of ownership (TCO) savings of your B2B SaaS solutions

• Become an expert at handling objections that are unique to SaaS, including concerns related to security, data ownership, etc.

7. Incent your sales team with a model that’s made for SaaS

Incentives are the lifeblood of a successful sales team that delivers. However, the quotas that worked in the age of large, on-premise software deals aren’t as effective in the age of SaaS. If you give your sales team a fixed bonus for every service sold, their focus, understandably, shifts to driving sales volume. However, this can lead to low activation rates—and unhappy customers who never use or realize the value of the SaaS they’ve purchased.

A better approach is to use a compensation model that is based on onboarding and activation rates. This will incentivize your sales team to guide customers to relevant solutions that they will actively use. With this strategy, customers will understand why your B2B SaaS offering is crucial to their success, a factor that will boost customer retention.

8. Make onboarding a top priority

Onboarding is helping your customers activate, configure, and potentially migrate information to their new SaaS applications. It is also essential to a successful SaaS sales practice.

Without onboarding, your customers are significantly less likely to use their apps. Because customers are usually unwilling to pay for something they do not use, ineffective or missing onboarding can lead to a churn rate of as much as 80 percent. It can also put a tremendous amount of pressure on your customer service team, who will have to deal with a steady stream of unhappy customers.

In addition to driving retention, successful onboarding also establishes trust with your customers and provides opportunities for up-selling and cross-selling. Onboarding is so valuable that approximately three-quarters of businesses need this service, and are willing to pay for it.

9. Keep your free trials simple

Say the magic word—free—and buyers will flock to a product offer. When it comes to B2B SaaS, however, making customers jump through a series of hoops just to access a trial is a sure-fire way to generate high drop-off rates.

A simple three-step activation that requires light registration (an email address and a password) is significantly more inviting. You can keep the momentum going by setting up a series of communications to engage with your customers as the trial progresses. This can drive anywhere from a 20 to 40 percent conversion rate from free to paid.

10. Keep SaaS sales out of internal silos

We are more than two decades into the SaaS revolution, but selling SaaS does not come naturally to most companies. Many must undergo a digital transformation to align their teams and implement the technology and processes they need to make selling SaaS seamless, easy, and profitable.

To start, a company needs a core SaaS team that can tackle the roles of a project lead, a product (marketing) manager, an operations manager, an ISV relations manager, and a technical project manager.

This team will not be successful, however, if it is siloed away from the rest of your organization. To help ensure that your SaaS practice is integrated into your larger business, start at the top. Get buy-in from executives who support your transformation and can drive alignment across your company. In an ideal set up, your SaaS practice would be a cross-functional effort with sales, marketing, and customer success teams aligned to common goals and key performance indicators (KPIs).

A large majority of companies are now using B2B SaaS, but an increasing number are realizing that they need help to be truly successful. With these key strategies, you can not only sell more SaaS, but also help your organization become trusted technology advisors and the go-to source for the solutions that your customers need to thrive.

Ideas @ AppDirect is a leading source for trends, statistics, best practices, and other information related to digital transformation and the digital economy.

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