5 Major Sales Challenges Every SaaS Startup Faces & How To Deal With Them

saas challenges

One industry which has witnessed accelerated growth over the past few years is SaaS. The revenue forecast for this industry is expected to reach $380 million by the end of this year alone. The market is exciting and the competition, rampant, as a lot of organizations, both big and small, are trying to create a mark here. So despite the vast scope, SaaS sales has its own set of hurdles and challenges.

In this article, we are going to look at some key trials faced by companies when it comes to SaaS Sales and what are some ways in which you can deal with them:

1) Identification of the right TG:

SaaS companies usually do not have a pre-existing market. You often try coming up with solutions for problems that no one knew existed, or creating customized solutions for newly developed problems your clients may be facing. In such a scenario, it is integral that you make your solutions attractive enough for your potential customers to adopt. A lot of times the problems you are addressing end up not belonging to the current market or are the ones that no one is interested in tackling. The simple solution is to pick up the right market sentiment. You need to conduct intensive market surveys, get feedbacks on your basic solutions and build on it only after garnering a positive response.

2) Establishing a feasible model:

When setting up a new SaaS-based product, you could expect an instant clientele of early adopters but it is the further group that is difficult to convince and attract. You will notice that you have to invest a lot of time and money in setting up the further client base. Not all expenses may be justified and you realize that you can spend only up to a limit on acquiring customers. So it is important that you do this spend wisely; it is not just about getting the customers but also the value that each one of them brings in. Only when the life time value of customers is higher than the customer acquisition cost can you flourish. And for this to happen you must have a feasible model in place.

3) Building Brand Awareness:

Building brand awareness is something that all start-ups invariably need to do to succeed. But when it comes to a SaaS start-up, it is not so much about the awareness as much as it is about the message behind it. You may spend a lot of money in reaching out to audiences and telling them about your product, but if you aren’t able to communicate its benefits correctly, all the marketing efforts may just go in vain. While marketing is all about communicating, this is one space where it is really important to be concise, to-the-point, and communicate effectively. A proper understanding of the potential clients is necessary to make use of the right language and medium. The message should be delivered in such a way that it lingers on their minds and creates an impact.

4) Sales reps with inadequate knowledge about your product:

In SaaS companies, the core managerial team plays a very important role in devising strategies, reaching out to the target market and carrying out the operations. A lot of times, you may have failed to put together a well-trained strong team. These faults within the management will affect the overall working and efficiency of your company. And this will take a direct hit on sales. Hence, the recruitment of highly trained sales is extremely important and it is vital that you give them a comprehensive training session before they begin communicating with prospects. Videonor’s sales training program for its video conference software service, which helped slash down its churn rate by 54% in 12 months, is a great example of how investing in a training program proves to be effective.

5) High customer churn rate and referrals:

The cost of customer acquisition is usually high for a SaaS company. You need to ensure that the customer turnover rate is lower than the customer acquisition rate. If more customers leave the firm as compared to the new ones coming in then then you are bound to fail. So along with constant growth, you also need to focus on keeping your existing customers. You can make use of your existing customers to get referrals and increase your client base.

SaaS sales can be complicated and you may face many failures before you succeed, and realize what is working best for your company. But having the right mix of a good strategy for your business development, using digital tools and advertisements, reaching out to the right audiences and persistently following up with efficient communication will yield you traction and long term results.

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