Online sales done right is a boon to sales efficiency

SaaS executives share their advice on online sales excellence

SaaS software has evolved to become highly sophisticated. So too have SaaS buyers. And ground zero for those changes in customer behavior is your SaaS company’s online sales team. So what works--and what doesn’t--in online sales these days?

Not too long ago, online sales were seen as just one element of a company’s marketing program. Flash forward to today, where top-tier online sales groups deploy sophisticated sales tactics that leverage advanced data analytics. The teams stand on their own as high-efficiency, low-cost customer acquisition engines that manage a sales channel aligned with many buyers’ preferences.

I recently hosted a group of senior sales and marketing executives for a discussion on online sales at SaaS companies. The discussion generated insight after insight about the emerging trends and best practices in online sales. Below I’ve captured some highlights, observations, and actionable advice.

What works and what doesn’t in online sales

The event kicked off with a panel featuring two highly accomplished executives, Robin Joy, Senior Vice President of Digital, Demand and Web Sales at DocuSign, and Marie Gassée, Director and GM of Online Sales at Box. The panel then quickly broadened into a wide-ranging discussion amongst the entire group. They had a lot of interesting things to say.

Big picture, the key takeaways clustered around three areas: pricing and data; segmentation; and org structure:

  1. Pricing. Experiment early—but not before your data and technical systems are fully functional. Success with pricing is all about turning accurate data into pricing insight.
  2. Segmentation. Segmentation in online sales isn’t just about identifying SMB accounts. Increasingly, enterprises are using online sales channels to trial at the individual or team level.
  3. Org structure. Where online sales teams live on the org chart is a company-specific challenge. Increasingly, online sales are moving from Marketing to Sales, where it serves as a highly efficient customer acquisition engine.

There’s a lot more to say on each of these areas.

Experiment with pricing once your systems are humming

Data and systems. Field reps and inside sales gather reliable data on prospects every time they have a conversation. Online sales teams are much more siloed, relying on data to understand today and plan for tomorrow. For an early-stage SaaS company, getting your systems and data right early is paramount. It’s a simple relationship: Low-quality data generates low-quality insights that force low-quality decisions. Best practices here involve online sales teams having dedicated data specialists and developers. Those resources solve the data quality problem and, on an ongoing basis, allow data analytics and technical infrastructure to evolve as the team’s (and company’s) needs change.

Pricing perfection. The time to experiment with pricing is early on when you can be nimble and remain in testing mode. The operational burden of changing plans and pricing later is tough in terms of sales teams adapting and upsetting customer expectations. Building the muscle to do experimentation early makes later experimentation easier. As your company grows, that experience means you can test against much larger volumes of data where even marginal improvements can have a massive impact on your bottom line.

Upgrades. There must be a clear upgrade path designed into the product. Participants cited walled-off features and prominent upgrade buttons as best practices. Think of it terms of the customer lifecycle. What is that customer trying to accomplish? Initially, it’s often something quick and easy, a narrow use case. You’ll want to optimize their experience for a fast time-to-value. As they work more with your product, they should begin to recognize additional use cases. A clear upgrade path with the right pricing options opens the door to an expanded relationship.

Requiring credit cards for trials. The group offered mixed opinions here. While credit cards and corporate email requirements help with scoring leads, those requirements also scare off a meaningful number of otherwise high-quality leads. One related issue was the spike in fraudulent new accounts. One participant reported a recent period in which more than 50% of the online sales team’s new accounts were fraudulent, even though the accounts were opened with legitimate credit cards. This made the bad accounts difficult to detect and added a lot of noise to performance metrics.

Promotions. Promotional pricing is an effective technique for preventing churn. Promotions presented to customers seeking to churn help reduce total churn--and thus boosts growth. One of the best techniques for promotions is to create a sense of urgency. While testing can help optimize promo length and offering, successfully communicating that sense of urgency can make a meaningful difference--in the context of not only churn but retention and upsell. Just be careful not to condition customers to expect promotions (say, at the end of every quarter or year). That can work against you and hurt sales.

Trials. Product trials are an effective lead generation tool given that they’re usually self-service—generating opportunities without much marketing spend. The question on whether to offer free trials is tied to the nature of the product and customer base. A narrow, easy-to-use product lends itself to self-service trials and automated onboarding. While self-service trials for a feature-rich platform might scare off users who find getting started too difficult.

Watch for enterprises in SMB clothing

There are important implications to the fact that online sales channels attract accounts of all sizes. Gone are the days when there was a clean break between individuals and SMBs subscribing via online and enterprises signing up via inside or field teams.

These days, enterprises often come in through online, especially if a single individual or team is interested in testing the product. Here, again, having effective data and systems in place to identify and evaluate these larger opportunities is key.

Predictive analytics. One clear trend for segmentation strategies in the years ahead is predictive analytics: AI and machine learning tools that identify opportunities to retain and upsell accounts using multiple data points, additional variables, and even product usage patterns.

Self-service channels. By definition, self-service channels open the doors to all sizes of customers. And to their different needs. Analytics are critical to map those customer segments to the right balance of sales support. Adding self-service channels can help boost sales efficiency. Whether you’re talking about SMBs looking to buy online or enterprises looking to trial at the team or department level, there will always be customers who prefer self-service. Take advantage of that opportunity to average down your customer acquisition costs.

The SMB data problem. There was a clear consensus (and a lot of moans) around the fact that data about SMBs accounts is often very low quality. One participant shared a story of seeing high growth in sign-ups in the Architecture industry—before realizing the truth was that “Architecture” was the first option in the sign-up flow’s Industry drop-down. Reasons cited for the inaccuracies were attempts to qualify for a lower pricing tier or to deliberately mask the size of the opportunity and reduce inbound sales and marketing.

SMB resegmentation tip. One participant shared the story of a successful SMB resegmentation project. That team found that prospects with 1 to 10 employees needed to be serviced with a trial enablement approach because of low product knowledge and low technical sophistication. But at just 11 or more employees, a prospect could be treated as an opportunity: there’s generally a buyer in place with knowledge of the org and their product needs.

Online sales teams are thriving within sales departments

Where should online sales teams live on the org chart? A case can be made for online sales as part of Marketing, or Sales, or even Customer Success. How to decide?

There was no clear consensus among participants, but the clear trend was a shift from Marketing, where online sales acts as an extension of the corporate website operations, to Sales, where online sales teams can better serve as a highly efficient customer acquisition engine.

The shift to online sales as part of the larger Sales organization comes with real challenges around sales culture and incentives. It’s difficult to avoid the tension between sales reps who believe that they deserve credit for some percentage of the online sales opportunities.

For organizations with inside sales and online sales teams, conflicts are unavoidable—but fixable. Incentive structures will determine behaviors. One participant shared a misstep around incentives. Sales reps were given credit for any new deals if they had previously opened an opportunity for that account. Which quickly led to the reps opening every conceivable opportunity. The solution that worked was segmenting by account value.

The secret, then, is for the online sales team to strike the right balance between helping the whole company grow without making sales reps feel like they’re losing opportunities. But that’s easier said than done—the way forward is with clear communication and smart incentives.

Online sales operations in 2019

The discussion demonstrated the many challenges and opportunities ahead for online sales operations in 2019. That’s in addition to the perennial challenges of data quality, reliable analytics, pricing experimentation, effective promotions, churn and retention, and on and on. After all, no one said effective online sales was easy.

I would like to again thank Robin, Marie, and everyone who attended the event for their great questions, stories, and hard-won advice.