3 Common SaaS Sales Models

How do I know what SaaS sales model is right for my digital product?

There is a lot of pressure surrounding choosing the right SaaS sales model for your product because this decision may play a significant role in your product’s success. As you look to nail down a formula that will allow you to acquire new users, you also must consider how you’ll retain your users and what room (if any) you have left yourself to upsell users in the future. To strike the right balance, you must provide a strong value proposition, deliver on it, and find ways to keep users engaged and excited about the product. 

Price point, product complexity, and value proposition are drivers in determining the right sales model for your product. Generally speaking, the more robust the feature set, the higher the price and the more involved the sales process required to bring on new users. Similarly, the more value the product delivers for users, the higher it can be priced, which justifies a more extensive sales process. The three common SaaS sales models detailed below seek to balance price, complexity, and value proposition: customer self-service, transactional, and enterprise. Let’s take a look at these three options in more detail.

Customer Self-Service

The customer self-service model is ideal for selling a lower-priced product at a high volume. In short, users sign themselves up for the product without any interaction with a sales rep or team. This model often leverages free trials and “freemium” pricing to entice users and introduce the product’s value in a low-stakes exchange. Once users understand how the product works and see the benefits of the paid version, they may choose to upgrade to a paid account and guide themselves through this upgrade process all on their own. With this model, sales volume must be high to accommodate the lower pricing of the product. One significant benefit is the cost savings realized by not supporting an expensive sales team to acquire new users. Instead, product adoption is driven by a combination of marketing and word of mouth. 

This type of model is best suited for products with straightforward functionality that doesn’t require extensive customer support, customization, or ongoing touchpoints from sales representatives.

Enterprise Sales

The enterprise sales model may be your best bet for a higher-priced and more complex product where lower sales volume is required to reach your revenue goals. An enterprise sales model means utilizing an experienced, sophisticated, and often expensive sales team that is focused on proactive outbound sales efforts. The sales process is extensive, and sales cycles are long, but the product’s value and the revenue it brings are worth the cost and the wait.

Your solution must be premium to justify the higher cost, meaning you’re providing a lot of value via a complex and customizable set of features that truly moves the needle for your users. 

Transactional

A transactional sales model is essentially a way to meet in the middle of the self-service and enterprise models. For products more expensive than the self-service model but less expensive than the enterprise, this model offers a middle ground. Similarly, this model is often appropriate for products with moderate complexity. 

A transactional model works best with online content and refined lead generation that drives prospective customers to the product and allows them to guide themselves through the early stages of the sales process. Unlike the self-service model, the prospective customer then needs to engage with a salesperson or team to complete the sale. This person-to-person touchpoint opens up opportunities to customize the service and provide a range of price options. In a transnational sales model, once the transaction is complete, onboarding for the new customer should be relatively simple, with minimal configuration required for the customer to begin utilizing the product.

Apex Insights

If you’re interested in diving deeper into the SaaS sales process, we recommend checking out our recent episode of The Digital Footprint podcast. We chatted with Ken Lundin, the President of Ken Lundin and Associates, about common mistakes SaaS sales teams make in their customer acquisition process. Ken shares meaningful advice for developing your messaging strategy and market fit; he also discusses the obstacles you face when building a predictable sales pipeline. Tune in to hear Ken’s meaningful advice to sales teams focusing on the client acquisition process and learn why you should pay more attention to messaging and market fit.

The Right Tech Partner for Your Evolving Business

The most appropriate SaaS sales model for your product depends heavily on the nature of your product, which is why it’s critical to have an experienced team to help you ask the right questions and make the best strategic business decision. Whether you’re a small but mighty start-up or a complex enterprise, we’ve helped businesses of all sizes identify the right sales model for their product. Our team will help you thoroughly understand your options and make a range of recommendations, from how to establish the ideal trial period for your product to what you should include in your sales demo. Get in touch with our team to start the process of weighing complexity vs. price and choosing the right sales model for your product.