Vivek Wadhwa had an interesting post today on selling in TechCrunch. I’m learning some serious lessons on selling now that I’m the head of marketing at Pixily – although I am very much still a novice sales manager! I reserve the right to be completely wrong/change my mind on any or all of these points 
- Aspiring to a touchless sales model is great, but small business customers like to know they can reach you on the phone. Many great SaaS companies have a great sales funnel that terminates when a customer signs up online without speaking to a sales rep. I think most small business SaaS startups hope to create this type of sales cycle. After all, how can you have a profitable company if you need to have a sales person on the phone closing $15 per month sales? But, at Pixily, we’ve found that phone calls result in sales and great free to paid user conversions. We offer a free trial, and a decent number of our paying customers choose to sign up for the free trial and eventually convert to paying customers. The highest converting (free to paid) lead source is the customers who call us and who we sign up for the free trial over the phone. The convert to paying customers by over 3x vs. the next best source. (Note: “source” is probably not the right word to use, but it’s Saturday and my coffee isn’t kicking in quite yet…) Is this sustainable in the long term? I’m not experienced enough to know at this point.
- Customer service reps make great sales people too! Vivek mentions how developers make great sales people. I’d very much agree, since our developers often drive closed leads from networking events they attend and from conferences they speak at. But we are having success with our customer service reps doubling as sales people. First of all, they know the product. Secondly, they understand how live customers are using the product. Third, when a free user calls in to ask a question it’s the time to try to sell them on an upgrade!
- Customers do the darnedest things with the product – asking them “why are you interested in my product” is really helpful in selling. For example, one of Pixily’s products is a simple document scanning service. We happen to be pretty good at scanning documents, and can offer it profitably as a stand alone service. We had a bulk scanning customer who was a magazine publisher. He wanted to get his old magazine issues (from the 80′s and beyond) online, but only had them stored in print. Once we actually really understood how he wanted to use our product we were able to sell him – even though we were more expensive than a couple of local scanning providers in his area. We’ve sold this particular product a few more times, mainly because we “get” what the customer’s end goal is.
- Managing a sales pipeline is harder than it looks. When you are the VC, you get to see all these pretty sales funnels at board meetings. When you are the person trying to grow the business, keeping the different campaigns and leads all moving along in the funnels is much more challenging! I guess it’s just in my nature to enjoy playing/measuring our sales channels by output, but I have to fight the instinct to not spend too much time in analytics and not enough time in selling/content creation.
- When selling online, content is king. I’ve had a ton of luck getting great content out of a marketing intern we recently hired. Not only has he built an entirely new site dedicated to document scanning, he’s also put out some very helpful blog posts and made content upgrades to our web site. All this content is producing – both in terms of us moving up on Google, getting more traffic and improving our conversion rate.
December 13th, 2009 at 10:28 pm
Great post. Completely agree about the importance of a human touch – especially out of the gate. The 1st few months at Tungle I contacted every user who signed up. We didn’t close more sales because we’re pre revenue. But for sure that high touch drove usage and brought us closer to our users and their needs.
December 14th, 2009 at 4:43 am
Totally agree with this. We are running a SaaS version of our digital signage product – InfoSignz. We initially had this idea that low touch would be beneficial to our sales costs and convenient to our customers. However, we found out that our customers use our product for not only what it is intended for, but so many different things, that we actually had to learn from them. We are looking to now bring in a huge human angle to the selling process where we can understand what the customers are looking to do with our product and then advise them what more they can do and how differently.
Even though customers are just $9.99/ month, that is just the beginning, at least in our industry. Customers can become several hundred dollars a month very quickly if they like what they see.
December 14th, 2009 at 9:00 am
Its quite a task to create a good customer support + sales process online itself!
December 14th, 2009 at 3:22 pm
Talking to customers is really helpful at the early stage – although I do remember recently reading a great post (can't remember where I saw it though) on how the initial customers were quite different than the 501th customer. The first people were the really, really techy early adopters. Over 500+ they started getting people who needed a really simple product and who demanded, kind of ironically in my mind, less functionality.
Pixily has customers all over the place right now. We've got the tech company founders and we've got more old-school (but pretty interesting) small business owners. I'd probably spend all day on the phone with customers if I could, but there is only so much time in the day!
December 14th, 2009 at 3:35 pm
Siddharth,
With your product you really seem to have the ability to scale to some pretty large, recurring revenues per customer. So it probably makes a lot of sense for you to have high-touch customer service!
Good comment; thanks. And good luck with InfoSignz.
Healy
December 16th, 2009 at 11:25 pm
Healy, great post! I agree with every point you make.
December 26th, 2009 at 5:51 am
"When selling online, content is king.." well said.
In SaaS business, we need to closely monitor 2 aspects – customer acquisition costs and customer retention costs. As we can't generate upfront license fee like on premise software, here the volume of sales and retention of a $15 account for next 'n' years are critical.
December 31st, 2009 at 4:54 pm
Great post!
Sounds like you need some sort of marketing automation to control the funnel???? Something like Hubspot, Eloqua or Marketo?
I've blogged about marketing automation for SaaS quite a few times @ http://justinpirie.com
December 31st, 2009 at 5:19 pm
At some point I will clearly need better funnel visualization tools, as I'm doing it manually now and it takes a lot of time. By this, I mean calculating cost per customer acquisition by channel, etc. I'm doing it manually now.
December 31st, 2009 at 5:23 pm
Healy- your reply hasn't turned up yet but the email has… anyway have you seen Matt Breznia from Xobni write about The 4 Metrics of User Acquisition and the Customer Bulls Eye? http://bit.ly/75GhCh
I'm just adding it to TWIS#7 -This Week in SaaS
December 31st, 2009 at 5:58 pm
I had not seen that; thanks for linking to it!
November 30th, -0001 at 12:00 am
Good advice. I think this teaches an important lesson even from an amateur about SaaS. Thanks.