In just seven years, the SaaS industry has grown from $31.5 billion to an astounding $171.9 billion. And by 2024, it’s on track to reach $369.4 billion!
For sales reps like you, the writing on the walls is this—no matter what you sell today, you’ll be selling SaaS in your next sales role. And that my friends is a good thing. Today we’re talking about why, and what you can do to take advantage of this massive sales industry shift.
Let’s get real here. The job you have right now? You probably won’t have it forever. Businesses go under. Goals and needs change. And salary objectives shift. That’s okay! The average person will change their job five to seven times during their working life.
What matters, though, is how prepared you are for that next job. And as a sales professional, it’s incredibly likely that your next position is going to be in an SaaS company. So in order to make that transition as smooth as possible, you owe it to yourself to find out what this industry is all about. And most importantly, what does working in it mean for you?
Alrighty, so starting out, let’s hit a basic question…
1. What Is SaaS?
Well, SaaS is short for “software as a service.” Basically, it’s a model where businesses license software to customers in exchange for a subscription, be it monthly, yearly, or any other timeframe. These businesses also “deliver” the software in a sense by hosting it over an internet connection.
As a result, customers don’t have to install via a CD, have a tech crew come in and set up their system, or engage in any other cumbersome physical onboarding. Connection is on-demand. And with just a few clicks, customers can start using the product for their business.
Think of apps like Dropbox, HubSpot, or cloud-based Microsoft Office 365
Okay so the question is…
2. Why Will You Be Selling It
Well to put it simply, companies across the world are making the shift to this model because it offers some very real and very lucrative benefits. For instance…
A) It Brings In More Revenue
It brings in more revenue. And it brings in more consistent revenue. See, an SaaS model is built on recurring subscriptions. If a customer doesn’t cancel their subscription, they’ll be billed again for the next cycle. And that means the default is staying a customer.
Compare that to the traditional model. The default after a purchase is nothing. Because it takes work for that customer to buy again.
So as long as an SaaS company is keeping its buyers happy, those customers won’t go through the hassle of canceling.
And given our tendency toward the path of least resistance, that often means an SaaS company will bring in more money over time compared to traditional models. Plus, that revenue is consistent, making it easier to plan ahead.
B) Allows for Automatic Upsells
Allows for automatic upsells. SaaS products typically have multiple tiers to choose from. The more you pay, the more functionality and features you gain access to.
So as an SaaS customer’s needs grow and expand, they can seamlessly choose to upgrade to a new tier. No searching for a new provider. No going through a whole new lengthy sales cycle. Instead, they can make the switch with just the click of a button. Easy as that.
C) Higher Business Valuations
Higher business valuations. Now, there are two components to this idea.
First, SaaS is expanding. Remember what I said before? About SaaS growing 5X over the last seven years? And nearly 12X from 2015 to 2024? That means the future is SaaS. And businesses are valuated according to that trend.
Secondly, and this might be above our heads as just knuckle-dragging salespeople. But we sell what drives a company’s shareholder value. The easier it is for US to sell, the better a company is going to fare. And the more it’s going to be worth.
3. Why This Shift Is Great
Why is this shift great for you as a sales professional? What does all this mean for on-the-ground benefits?
Well, first and foremost, there’s…
A) Long-Term Residual Commissions
Long-term residual commissions. If your mouth isn’t watering already at the thought here, it should be.
Many SaaS businesses reward their salespeople with commissions that continue over the course of a customer’s relationship with the product. So if a client stays subscribed for, say, 10 years, you will continually earn a commission for that lifetime.
Just imagine, a single sale can lead to a decade of recurring payouts. Sounds like heaven! The only trick here is that the better you sell them on your product, the more likely they’ll be to stick around. So it’s still worth putting in the effort up front and focusing on your skills.
B) An Easier Closing Cycle
For SaaS products, most customers get the majority of their info from automated funnels. Ebooks, case studies, how-tos, in-depth articles—this is where your clients will dive deep into what your product can do AND what they can do with it.
As a result, you don’t have to do as much selling as with traditional models.
On top of that, implementation is as easy as a click of a button. And the ability to split costs on a month-by-month basis lowers the biggest barrier to buying—expense.
And you know what that means—it’s easier to close!
C) Clearer Selling Points
SaaS products are, by their very nature, dependent on the internet. And that dependence brings with it a few very clear selling points that you can use to nudge buyers towards that “yes.”
For instance, many SaaS products are designed to work in tandem with other solutions. For instance, HubSpot integrates with over a hundred different apps to simplify automating your business, updating your contacts, and much more.
That dependence on internet connectivity also allows for regular software updates and hassle-free cancellations.
And these, like integrations, make selling your product easier. Giving you more time and the opportunity for more sales success.