Not too long ago, if you wanted to use a piece of software, you’d have to buy a physical copy (maybe on CD or, for those with a particularly good memory, floppy disk). Then, with the rise of high-speed internet, it became possible to download a digital copy.
However, with Software as a Service (SaaS), users could now “rent” software with a subscription model rather than having to buy it outright. Instead of having to install and later uninstall apps on individual computers, users could use them in the cloud, accessing them anywhere with an internet connection.
This means SaaS sales requires a significantly different approach. Rather than simply trying to close a sale and moving onto the next lead, SaaS sales effectively means asking prospects to keep on buying, either on a monthly or annual basis. While we normally talk about a sales funnel, for SaaS services it might be better to think of it as a continuous sales cycle with no designated end.
Thanks to the popularity of B2C services such as Netflix and Spotify, people are far more familiar with the idea of subscription-based services. As a result, salespeople rarely have to convince prospects about the benefits of SaaS. Instead of paying several hundred dollars for a CRM package that will be out of date next year, they get access to the latest version of the software with ongoing support for a (comparatively) low monthly fee. In return, SaaS companies can enjoy a consistent income. What’s not to like?
But the popularity of SaaS has also led to an increase in competitors, and your prospective customers can jump from one solution to another without any commitments or costs. For SaaS business owners, this means your solution has to offer high long-term value. If you’re working in SaaS sales, you need to effectively convey that value and explain why your solution is the best choice.
What’s it like working in SaaS sales?
SaaS sales covers a wide range of duties, but the exact responsibilities will vary depending on the company and the job title. As an example, one recent job opening for a SaaS sales executive listed the following duties:
- Defining and executing territory and account sales plans for your assigned geographic territory
- Prospecting, qualifying, managing and closing sales opportunities within the assigned territory
- Developing and managing multiple opportunities through the sales pipeline
- Managing and tracking customer interaction and transactional information in a CRM system
- Coordinating presales resources throughout the sales cycle
- Providing presentations, product demonstrations, and general support to prospective customers
- Executing a land-and-expand sales strategy with well thought out enterprise sales strategies
- Regular reporting of prospecting, pipeline, and forecast through the CRM system
- Staying current on competition, competitive issues, and products
- Effective, excellent communication with management, customers, and support staff.
- Traveling to customer locations in support of sales efforts.
- Other duties as assigned.
As you can see, SaaS sales involves more than just selling, something that all types of salespeople have to deal with.
According to Pipedrive’s State of Sales, only 53% of salespeople spend most of their day actually selling. Other tasks can include sales-related work, such as prospecting and qualifying leads, to more mundane jobs like admin work and IT support. SaaS sales isn’t immune to this, and you’ll likely find yourself assigned many more different duties as part of your day-to-day activities.
If you’re looking to take your first steps in SaaS sales, you’ll most likely begin your career as a Sales Development Representative (SDR), also sometimes referred to as Business Development Representatives (BDR). As an entry-level position, employers won’t typically require SDRs to have any previous SaaS sales experience, with training provided as part of the SDR onboarding.
Instead, employers are more likely to be interested in seeing whether you have the right mindset and attitude to be an SDR. For example, how have you previously shown confidence, persistence, empathy, and other similar qualities? Of course, experience and knowledge of sales or SaaS will give you an advantage in the interview process.
The SDR’s main responsibility is usually to generate new leads and handle the initial outreach, serving as the first point of contact between the company and the prospective customer. They’ll then be handed over to an Account Executive (AE) who in turn will continue to build and nurture that relationship, potentially doing demos and holding meetings, until they’re able to close the sale.
Depending on the SaaS company structure, the AE will either continue to look after the account after the initial sale or hand them over to a dedicated Account Manager.
As you move up the career ladder, you’ll find other sales roles such as Sales Managers who are responsible for their team’s performance, up to VP of Sales, responsible for the overall SaaS sales strategy and and performance of the entire sales organization. At the very top, the Chief Revenue Officer (CRO) is responsible for all the revenue-generating activities.
According to the latest figures from Payscale, average salaries for these roles in 2022 are:
|Sales Development Representative (SDR)
|Account Executive (AE)
|Regional Sales Manager
|VP of Sales
|Chief Revenue Officer (CRO)
It’s important to note that these figures are for the base salary, excluding bonuses and commissions. Skilled salespeople can make much more, depending on the company’s bonus and commission structure. If you’re looking to learn more about the sales commission structure for SaaS, check out our Commission Calculator.
Before taking on any SaaS sales role, find out if you’ll be paid just a base salary, just commission, or a combination of the two. If you’ll be paid commission, confirm how that’s worked out. Is it tiered, with a higher percentage paid out the more you sell? Is it based on total sales or just profit? Do you get commission on the initial purchase or also when a customer renews their subscription?
The commission structure can have a massive impact on your take-home pay, so don’t be afraid to ask exactly how it’s structured.
The three main SaaS sales models
While every SaaS business involves subscription-style pricing, there are still different sales models within SaaS to consider.
If you’re looking to create your own SaaS company, understanding the right model for your business ensures you’re using the right resources without leaving money on the table. For those looking for a role in SaaS sales, knowing the different models and how they operate will help you understand the different requirements for the sales team.