When I used to run a customer feedback self-serve SaaS solution for startups, one of the biggest decisions I had to make was whether or not I should leave it as self-served or move it to a sales assisted model.
The decision wasn’t easy and I had to consider a lot of pros and cons for each and every one of them.
Because of that, I’ve decided to put together an article to help all the SaaS founders out there determine the pros and cons of both and whether or not it’s the right time for you to move onto a sales assisted SaaS model.
The self serve SaaS model
Companies like Dropbox hit viral growth and made tons of money by creating great products and letting them sell themselves.
But a self serve SaaS model only makes sense for so long. The next step to keep growing is to move upmarket and sell to enterprise customers.
To achieve massive revenue growth, you will need higher paying customers. For example, if you’re only charging $25/month for your SaaS product, think about how long it’ll take for you to hit $35k in MRR?
It’s a slow process and you have to wait month to month to get paid.
You want to hire quick and grow quick and that’s when you should consider a different strategy and move onto a sales assisted SaaS model.
The next step to keep growing is to move upmarket and sell to mid-market or enterprise customers.
In other words, if you’re looking to grow revenue and profits, all SaaS will eventually need to move onto a sales assisted model.
The hardest part is understanding the timing for moving onto a sales assisted SaaS model. Is your team ready for it? Do you have all the hire in place? Do you have an enterprise solution in place?
There’s a lot of things to consider, that I’ll be breaking down shortly.
The general rule of thumb for CLTV
In theory, you need to hire sales people for a sales assisted SaaS model. The general rule of thumb that most SaaS companies use when considering this model is whether or not their CLTV (Customer Life Time Value) is above $1000.
Need a calculator to calculate your customer life time value? We literally made one for free for you to use. Check it out here.
If your company’s average CLTV is below $1,000, an internal sales team doesn’t make sense.
In the case your company should either tweak the product’s pricing or create a separate model for enterprise and higher-end customers.
What if your company is borderline $1000 CLTV?
$1000 CLTV is just a general rule of thumb, of course the higher the better.
If your company has surpassed $1,000 CLTV, anything is possible. By focusing more on the enterprise, why couldn’t that number grow to $5,000? Or $10,000?
This doesn’t mean that you have to remove your smaller pricing plans, but instead just add on a couple higher paying plans for the enterprise market.
Segment your conversion rates
The next step would be to segment your users. How many people go from trial to a higher paying package?
If bigger leads are converting at a lower rate than individuals, it indicates there are hurdles in the buying process that a salesperson can help overcome.
This might require a dedicated customer success manager or account manager to personally onboard the new users.
Your company just has to segment its leads and compare the rate at which bigger companies move through the pipeline versus smaller ones.
This can actually be helpful even if you’re not thinking about moving your SaaS sales model.
Another thing is to add a “Request a demo” button to your pricing page for the higher end deals.
When you do that, you’re giving the large accounts that have difficult buying requirements a way to head straight to you and ask you the questions that you need.
For us, we put “Need a custom lead amount?” Get in touch. We noticed that those people have more advanced requirements, but they’re willing to pay more.
Are we ready to hire a sales team?
One of the biggest questions you should be asking yourself as a founder is whether or not you are ready to hire an in-house sales team.
That requires a lot of resources and capital to start, but it’s necessary when you are selling to enterprise or moving to a sales assisted SaaS model.
Another option you have is to outsource your entire sales development or at least a part of your sales development to accelerate this process.
You can always reach out to GrowthOK for a reliable and quality outsourced sales solution.
Before you decide to hire a sales rep, it’s important that you have your ideal customer profile in place.
Just hiring a sales rep won’t solve any problem, you need to be able to have all the training, resources, and materials in place for them.
Do I know what’s my main target market?
Do I know who should my sales rep be reaching out to?
Do I know which part of my sales funnel do I need to have the rep to work on?
There’s many more questions that you need to ask, but make sure you have a defined target before hiring your first rep.
That will allow you to hire for the right position and interview the correct candidate.
Again, you could always outsource a part of your sales development.
For example, you could hire a SDR for prospecting, but use a lead generation solution to supercharge the SDR with quality data and research, so that your SDR can focus on prospecting.
Fixing budget problems with sales assisted model
Another common pitfall with a self serve SaaS model is that bigger companies might discover your product, but they’re comparing it with your competitors at the same time.
You can’t really negotiate a better deal for them because you’re not in contact or have a salesperson to handle this type of work.
Overcoming comparison and budget-related problems can be done with a sales assisted SaaS model.
It’s never too early to start building out your sales funnel for the bigger deals. It’s a great way to start scaling.
If you’re unsure whether or not this model will work for your product, you can always test the market with an outsourced managed sales solution that works.
If you’re looking for a quality outsourced solution that works, don’t hesitate to reach out to us at GrowthOK.