The key to effective SaaS sales is data. Software companies can use data to create sales strategies and measure the effectiveness of these. One such strategy, the SaaS sales pipeline, is especially important for any brand hoping to perform well.
A sales pipeline is the best way to get a snapshot of your SaaS sales strengths and weaknesses. It’s also integral for revenue forecasting and determining internal skill shortages.
To optimize the SaaS sales cycle and increase revenue, mastering the SaaS sales pipeline stages is paramount. Use this in-depth guide on the SaaS sales pipeline stages as your starting point.
What is the SaaS Sales Pipeline?
A SaaS sales pipeline is a visualization of your software sales cycle and how likely people are to purchase your software. The pipeline showcases where sales might not be as effective.
More than that, SaaS sales pipelines are used for forecasting. Companies can use their pipeline as well as prospect interest to estimate future sales and revenue.
Advantages of Knowing Your SaaS Sales Pipeline
SaaS sales pipelines are an effective sales tool that utilizes data and your company’s unique software profile to create an in-depth snapshot of the sales process.
This data can then be used to support existing sales strategies and fix bottlenecks in the sales pipeline. Whether it’s closing the deal or creating product demos, a sales pipeline contextualizes where your sales strategy isn’t working.
Seeing where the issue lies also allows you to focus resources on the right employees and the right part of the sales pipeline. If there is a team or employee that is bungling sales, the pipeline will pinpoint where they are and allow you to either retrain staff or get new people involved.
Another advantage of SaaS sales pipelines is revenue forecasting. Your sales pipeline is tailored to the complexity of your software and the purchase rate. These two combined can provide an in-depth forecast of the SaaS sales in the foreseeable future.
Lastly, the SaaS sales pipeline lets you see what skills you are lacking. Whether it be a pillar of the sales cycle like prospecting or a SaaS sales engineer to provide technical guidance, using data to determine skill needs saves money and is much more effective.
SaaS Sales Pipeline Stages
The SaaS sales pipeline is broken into 7 stages. Below, we’ll cover the entire sales pipeline.
While we recommend using every stage to your advantage, it’s also important to consider your business needs and software capabilities.
For example, less complex software options don’t need to use resource-intensive stages like prospect meetings. Users can purchase a subscription and understand the software without dedicated onboarding.
So, keep in mind your company’s needs and software capabilities when creating your SaaS sales pipeline.
Prospecting is the first stage of the sales pipeline and is all about finding potential leads. During the first stage, sales reps or the marketing team research and identify companies or individuals they feel will have an interest in the software.
At the prospecting stage, there has been no communication with the lead yet. It’s only about finding leads – usually from social media and other marketing endeavors – and keeping track of them for stage 2 of the sales pipeline.
- Lead Qualification
Lead qualification is about determining interest. At this stage, it’s important to see whether the lead would be worth committing to. If they show a vested interest in your software, then they qualify as a lead.
The sales team can make contact with the lead at this point to gauge interest. Vet the lead to determine if they are the right fit for the software. Compare their pain points to your software capabilities. You can also offer software-related goods like a free ebook to classify how interested they are in the software’s capabilities.
- Product Demo or Meeting
The lead has qualified as a prospective purchaser. It’s now time to bring home the sale with a meeting or a product demo.
The meeting should provide a comprehensive look at your product and how it can improve the lead’s pain points. This is also the part of the sales pipeline where you demo your product. Product demos, especially interactive demos that engage the lead, have a powerful positive effect on purchase rates.
Now that the lead knows how the software works and how it can improve their pain points, present pricing plans. The pricing plans should summarize how the software pricing compares to competitors and what features they’re getting per plan.
The proposal needs to make a strong case that the cost is worth the gains.
- Negotiation and Commitment
Some companies, especially large organizations, will want to negotiate pricing – especially bulk pricing. The negotiation process is usually held in conjunction with other relevant teams from both parties, like accounting and management.
During this section, both parties will work toward a contract that is favorable to both sides.
- Opportunity Won
When all parties are happy and the purchase is complete, you can celebrate. You had a sales opportunity and you won it, hence “opportunity won”. Now that the deal has been closed, it’s time to continue improving your software and move on to post-purchase retention.
- Post Purchase Retention
SaaS is different from traditional products. Instead of a one-time purchase, the SaaS sales experience continues long after the initial payment.
The goal is to increase the customer lifetime value through effective onboarding, great customer service, and continued software expansion. If handled right, a happy customer could be a paying customer for years and years to come.
SaaS sales are different from traditional sales.
The SaaS sales pipeline allows businesses to conceptualize the sales process and cash in on its many benefits. Chief among them are sales forecasting, identifying sales bottlenecks, skill and resource assessments, and improving the sales experience, all of which will increase company revenue and reputation.
Use this guide to visualize your sales pipeline and turn leads into long-term paying customers.
Product demos are an essential part of the SaaS sales pipeline. Use Saleo to showcase your software with interactive and captivating product demos. Request a demo today!