Global software-as-a-service (SaaS) is one of the most upwardly-trending industries and is currently an attractive one for investors. Deloitte reports that SaaS is the future of all software. New products, in particular, artificial intelligence (AI) enabled SaaS products that provide complete solutions for businesses worldwide continue to grow in popularity. It is projected that 85% of software used by organizations will be SaaS by 2025 according to the statistics reported by Exploding Topics
More and more B2B tech companies are jumping on board to fill the gaps in solution-selling these products, and this is a thriving and exciting time for SaaS startups. But, as a startup in this area of technology, there’s a huge amount of competition, and it is crucial to rapidly grow your initial revenues and customer base. Handling the pressure of a startup is almost always about being aware of the pitfalls.
There are many reasons why SaaS startups fail, but to succeed at an international level, business owners must also be mindful of the time required to devote to the most critical aspect of any startup — the development of sales and marketing. If you do not grow and scale at the required rate then you simply cannot remain competitive.
Investors will always watch keenly for that first return on investment (ROI) and ensuing validation of your product, helping to ensure your business’s future.
However, this simply serves to cement the pressure and it takes a lot of time to recruit and build a sales and marketing function that gels immediately and works well. What's the solution? Utilize sales outsourcing for growing SaaS startups, and allow someone else to do the heavy lifting. Sales outsourcing also happens to be a great fit for SaaS and this is particularly true in Europe where dynamic market conditions are noticeable, such as the ever-expanding adoption of 5G and the cloud.
SaaS is considered high-growth — one of the fastest-growing areas of today’s tech industry as the metrics clearly show: Globally, the SaaS market size is projected to reach $307.3 billion by 2026, from $158.2 billion in 2020, at a CAGR of 11.7% during 2020-2026 according to PR Newswire.
High-growth models are followed by high churn rates. Retaining the top SaaS sales performers can be harder than actually recruiting them.
High churn rates can be due to a variety of reasons, including:
One of the most effective ways to completely avoid a high churn rate is to partner up with a reputable sales outsourcing agency. What will they provide in return? A ready-made team of industry experts who know the local market and can hit the ground running, ready to sell your SaaS product to a receptive audience. No contracts to negotiate, a team that already works well together, and one that can concentrate on what it does best: Selling SaaS all day long.
It’s true. Your sales stars at home are not necessarily going to shine abroad. Outside SaaS sales representatives usually work best when confined to a local and known market. Plus they have to fit in culturally, it’s not just about knowing a second language. Observing and sticking to the cultural nuances are an important part of closing a deal, and will change from country to country. A mistake often repeated in Europe, where it can sometimes be treated as ‘one continent’ and not as 44 separate countries.
Knowing your brand well and being passionate about selling it is not enough if that salesperson does not also know the market like the back of their hand. And to be accepted.
While mentoring some up-and-coming SaaS startups via London & Partners, our CEO, Rick Pizzoli was asked the question: “What are the key attributes for a sales leader in a SaaS firm primed for growth, industry knowledge, tech expertise, or sales process acumen? In what order?”
Rick answered: “I think what’s critical is that when it comes to an international market, you can’t take someone that has sold a known brand and just transplant them to a new country. You need a real hunter and strategic thinker who knows the tech you’re trying to sell but also can localize a sales and marketing strategy for you. This is someone who is excited to build your brand abroad and can really sell your value. Then who can really close those deals.”
He continued that a lot of U.S. tech companies share the mistake of either transplanting an American sales star in Europe or assuming they can easily run a recruitment process from overseas.
“I founded Sales Force Europe as a sales team outsourcing service that focuses on leveraging local tech sales successes who know the local culture and have a network of qualified leads already in place.”
SaaS startups need flexibility. What size sales team you will require in an unknown and untested market with a new product also depends a lot on unknown factors until you find your feet.
Investors will not be happy if you overspend on their investment before you have a chance to make a profit, but the business will suffer if you have less than the required-sized team. So sales outsourcing for growing SaaS startups allows you to go with that flow and still remain in control of the hitting budget.
Choose to start small and spend elsewhere, or outsource B2B lead generation, marketing for a multi-channel approach, inside sales — and the all-important international field sales representatives. Grow the team or pare it back at will whenever necessary. Have a bigger inside sales team to allow your field sales to concentrate and focus on closing deals, not on prospecting — this ensures they are not spread too thin. All without the worry of the long process of recruitment, sourcing, interviews, contracts, local laws and legislation, or the possible high cost of bad hires.
When you utilize the services of an agency for sales outsourcing for growing SaaS startups, you will retain the amount of flexibility that your SaaS startup requires and the ability to save valuable time in getting to market, and that will make your investors happy.
SaaS is seen as the shortest path to continuous innovation and ongoing improvement for the businesses that buy into it. So shouldn’t you take the shortest route to market, by outsourcing for your growing SaaS startup?