Trust your product and your customer
Certain sales and marketing tactics should be dispensed with by SaaS providers, says Rodrigo Vaca
SaaS used to be something more than just software delivered over the internet. Back when it began, it was the antithesis of big, clunky software companies such as IBM, Oracle, and SAP.
The big companies were providing expensive offerings with elaborate pricing licences – think of Microsoft's Licensing – and upfront long-term contracts which often end up as shelfware. Whereas SaaS was affordable, promised clear per-user pricing, and allowed companies to pay for only what is truly needed.
However, as both a SaaS vendor and SaaS customer, I'm increasingly seeing the industry veering off course, often because of the sales and marketing tactics used.
Sales pitches happen frequently in my line of work, as they do in many others. I regularly hear from SaaS companies offering marketing automation, SEO, and market intelligence.
When the pitch matches one of our priorities and catches our attention, my next step naturally is to check their site.
Before I will even consider a sales call, I need to know more about the product and pricing. But there is often no information on the pricing.
My experience has shown that the pricing page sits consistently within the top five visited pages.
This is massively damaging to my confidence in them as a prospective buyer. Of course there are valid arguments about selling into enterprise versus SMB. As a marketer, I've dealt with both myself.
But there's still something that makes me distrustful of companies without transparent pricing.
It's not just about finding the lowest price. Pricing is a great indicator of whether that company is ready to do business with us. It lets me know whether sitting through the sales call is a worthwhile use of time for me and for the salesperson.
I'm often cold-called by companies that don't let potential customers try out the software without talking to sales first.
It's perfectly understandable that freemium isn't for everyone, but it shouldn't necessarily follow that customers can't try the software without having to sit through a sales call first to "explain their needs".
There are two types of customers: those that know what they want, and those that need some guidance. When I'm in the second category, I'm more than happy to be walked through it.
But if I know what I want, we both end up wasting our time.
It was understandable, back when software was first installed, why companies would hesitate to let people try it out. The process was cumbersome and could threaten privacy.
But with the software already online, as it is today, it speaks volumes about a company's confidence in the product if they're preventing people testing it.
Companies need to remember that potential customers are individuals, with individual needs and preferences about how to work out what they need.
As a customer, contracts are one of the most frightening aspects of buying software and IT solutions.
Requiring me to sign a one-year contract sends signals that you don't trust your product or service, just as not letting me test your product online did. The message is that the contract is the only thing that will keep me using and paying for it.
Contracts can be great, and we offer one-year and multi-year contracts when needed. Some customers require them for planning, budgeting or other purposes – and longer contracts can offer certainty for both sides.
SaaS contracts should be offered with a financial incentive such as lower costs for a longer commitment, but they shouldn't be the only option.
Sometimes we have to earn our customers' trust before they will want to sign a contract. Trusting your products and providing customers with flexibility at the beginning can be very advantageous in the long run.
In sales, the focus is often so heavily on the money you're bringing in that it can be easy to forget to trust the product – especially if it is not a product that you use frequently yourself.
Locking in customers can sound like the best option to the finance team, but if you have a great product, customers will stick with it anyway, so having a contract will little affect the bottom line.
What choices does a SaaS customer really have?
The number of SaaS offerings available means customers do have a choice, and they have a choice to look for products and services from companies that understand their needs and values.
Vendors need to understand that a monthly contract is more appealing than an annual one; customers want to try out products, and clear pricing is more appealing than hidden pricing.
Given a choice of similar products, most customers will choose flexibility and transparency. And where these benefits don't exist, many will lose interest long before they even reach the sales call stage.
Ubiquitous internet has levelled the playing field. Providers need to understand this when formulating their sales strategy.
Rodrigo Vaca is vice president of marketing at Zoho