5 Biggest Sales Mistakes by B2B SaaS Startups: How to Avoid And Scale?
“SaaS products are difficult to sell”
This is probably not the first time you have heard this when it comes to a SaaS product.
Admittedly, selling SaaS products can be a tough nut to crack and it takes longer to strengthen your foothold in the market. However, in the end, it all comes down to using the right marketing strategies and making the right roadmap.
That said, no matter whatever roadmap you build, how great your product and customer service is, your brand will still not skyrocket unless you keep making some common sales mistakes.
And looking at the stats, it seems SaaS companies don’t have a very good track record either.
According to a report by McKinsey & Company – unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years.
But don’t fret!
As daunting as it might seem but you just have to be careful of some of the following sales mistakes to finally reap your efforts.
1. Elongating The Free Trial Model
Most B2B SaaS startups want to leverage free trial packages, however, sometimes they forget to draw the line.
For example, while most trial packages fall between 15-30 days, some companies tend to go overboard with elaborate trial packages of about 60 – 90 days.
Now come to think of it – if the user couldn’t come to a conclusion within a week or two then how do you think extending the days would help?
In fact, the longer you extend the trial, the harder it will be for your sales professional to close the deal. So delaying the decision by extending the trial period is actually one of the biggest sales mistakes by SaaS startups.
According to close.io, 99 percent of B2B SaaS products should limit the trial to 14 days, max.
What about the remaining percent?
Actually for some B2B SaaS startups, longer trials are actually a better deal. However, most 99 percent of SaaS startups are following in the similar footsteps.
For example, say, Dropbox. When it comes to a SaaS product like Dropbox, where people upload their pictures and all the important files, they would have to think thrice at least before switching to another platform.
So when it comes to a platform like Dropbox, then there is no harm in elongating the free trial. However, other SaaS product based startups should not indulge in free-trials that extend beyond 14 days.
Also, it is worthy to note that if your product is too complicated, tactics like free-trial would not be enough to compel the prospects to turn into your permanent, paying customer.
So, what should the SaaS startups do when their product is too complicated?
For starters, the best thing to do is to give
If your product requires third party demonstration or has a complex process, then you must follow the demo model of various companies like Infusionsoft and Marketo.
For example, Infusionsoft not just offers free demos, but also gives you options of the type of demo you would like better. From a typical online demo to live webinar demo and to a personalized demo, they have plenty of options.
This kind of attention completely supersedes the typical demos and free trial models.
So the bottom line is: if your product is complex and requires demonstration, then the best thing to do is to offer free demos rather than elongated free trial periods.
2. Getting Into Paid Acquisition
We know that you have just started your business and are keen to acquire your first 100 customers as a startup as soon as you can.
Now amid this excitement and pressure, many SaaS startups end making some common sales mistakes. One of the most common mistakes is to get inclined towards “Paid Acquisition” early on.
Despite what you might think – paid acquisition doesn’t help as much as it might cost you.
And trust me, being broke in the beginning of your startup is not a nice situation to be in.
Why exactly Paid Acquisition such an anathema when it comes to SaaS startups?
Okay, for now, just imagine that you turn on Paid Acquisition and after a few days it even starts to generate some results. But what now?
What can you do now to fuel more growth?
Being a startup, the chances are that you don’t have other funding options either. And you have already spent plenty in Paid Acquisition.
So while Paid Acquisition makes sense if you have enough traffic and pre-existing customers, however, if you are just getting started then the best way to go about it is by working on your traffic and prospecting first.
So what can you do instead?
Rather than turning to Paid Acquisition, use these ways to generate traffic:
i. Extensive Blogging
ii. Guest blogging
iii. Connect with social media influencers
iv. Write Case Studies
v. Lead Nurturing
vi. Build a referral chain
Don’t forget that before working on the aforementioned products, you have to be extra aware of your target audience. If you fail to target your content, then all your time and efforts might just go down the drain.
3. Falling Into The “Discount” Trap
Startups generally lack confidence even if they know that their product is smashing. And the issue is even more drastic when it comes to SaaS based startups.
And generally when startups lack confidence, they tend to fall into the “discount trap”. What I mean by this statement is that they start to give out discount every left, right and centre.
And this is where the things may go downhill.
Why do we consider this a big sales mistake by SaaS startup?
For one, when the customers see excessive and unnecessary discount, they are likely to balk at the idea of making the final purchase. The customer is going to think that either your product is not worth it or you are actually selling at your worthy price but under the garb of a “discount”.
Both the narratives don’t bode well for you, especially when you are just establishing your foothold in the industry.
So avoid this temptation and leverage discount coupons very carefully.
Instead of giving excessive discounts, try to keep it simple. You can project your discounts as incentives, for example, you can offer free services for a month in return for a one-year pre-payment contract. Or two month free services for a two-year contract.
Here’s a perfect example below:
Have a look at this wonderful video that gives you a perfect insight into the right way to leverage discount coupons.
By not falling into the trap of excessive discounts and keeping it simple and concise, you can increase your business very smoothly. Avoid the urge to tempt customers using huge discounts, instead, create a model, a strategy that may look more like an incentive rather than a full-blown discount.
4. Overlooking The Credibility Of The Product
“A perfect marketing strategy alone can carry the product on its shoulders”
If your brain is also inundated with this crap then first and foremost, you need to get this out of their head.
We have heard people talking about how marketing can sell just about anything. They often think that all you have to do is to conceal “The Bad and The Ugly” and just go about exaggerating “The Good”.
While I won’t deny that in this age of social media, you can glorify certain things and such tactics are actually working in the favour of some brands, however, it doesn’t mean that it might necessarily work out for you.
Marketing won’t serve the purpose unless your product is serving the customer’s purpose.
More often than not – you simply can’t market your way out of a bad or even mediocre product.
The most common, not to say the biggest sales mistake by B2B SaaS startup we have been witnessing is that people think that a sales professional can easily conceal their brand’s productivity or lack thereof. As a result, most people just create a whole product based on a vague idea and right away start with their sales and marketing process.
Don’t be that person!
Don’t forget that you have to back your sales and marketing efforts with a credible and productive product that will solve the problem of your target audience.
If you are going by Apple’s marketing strategy, then don’t forget that while they are at the top of their marketing game and know how to sell a product, however, their products are actually top of the line as well.
So you can’t present an “all hat and no cattle” model to your audience and expect to excel.
5. Ignoring Customer Retention
Legendary copywriter Gary C. Halbert once wrote, “the best list of all is your own customer list!”
And overlooking this is one of the biggest mistakes by B2B SaaS startups. In many cases, SaaS startups fail to see that the customers that they have already acquired are way more profitable than a newly acquired lead.
And this statistic is a perfect proof that retaining an older customer is more important than chasing a new lead.
According to Marketing Metrics, if a customer has previously made a purchase from your company, there is at least a 60 percent chance that the customer will make at least one more purchase. Meanwhile, if a new visitor clicks on your site, the chances of that person becoming a paying customer are only 20 percent at the most.
Come to think of it, at present, you are chasing after a fresh lead with little to no guarantee of success. On the other hand, you have a few customers who are already interested in what you have to offer.
Now if you neglect them in favour of fresh leads, then you stand at huge risk of losing your previous customer.
So don’t ignore customer retention and try to provide the best services to your existing customer in order to retain them as a permanent, paying customer.
Hopefully, after this elaborate guide about the SaaS startups sales mistakes, you know what to avoid and how to avoid. Furthermore, we have also discussed what you can do to touch the success and increase sales.
So this works as both a sales strategy plan and a warning against the biggest sales mistakes by B2B SaaS startups.
Which Sales Mistakes By B2B SaaS Startups do you think are most common?