SaaS Sales Funnel:
The essential step is to connect with your customers. You need to establish a connection with your customers depending on who they are. Now the second part speaks about qualify. Imagine you want to sell a gaming software.
So it’s essential to check whether your customer qualifies for the software. You need to ask your customer whether they are interested in gaming or into gaming? If its a no, you need to drop the conversation and move ahead with another customer.
Step 2: Understanding your Customer’s requirements:
While qualifying your customers for your sales requirement, you can ask exploratory questions like, how often you game? Which software are you using currently? How is your experience? It will help you to analyze what the current scenario is and what your customers are doing.
Step 3: Follow Up: After closing the deal which comes with a needs assessment of the customer sometimes you need to give a follow-up call or mail.
B2B SaaS Organization Revenue Growth:
Three phases of a startup’s lifecycle :
Simple SAAS Model:
Touchless Funnel (A model where no salesperson is involved):
The touchless funnel is very simple with no sales representative. The visitors visit the site. You offer them various trial versions of your tools and they sign up and the deal gets closed.
You can’t improve unless you measure the performance. Therefore the critical metrics for measuring your performance in terms of sales is given in the diagram above. At first, the visitors attracted to your site.
Then those visitors try your tools and thus fills up the opt-in forms and then the deal gets closed. With this, other key metrics that comes into the picture is the conversion rate.
You need to figure out how many visitors on your site have got converted for trials and then, in turn, got converted as potential customers.
When you do this, you will find out that there are different sources for our leads. They can be through various social media Ads or might be from inbound marketing. The size of the leads completely differs.
They can be from big size lead who has more value to small size leads. Therefore the shape of the funnel will vary as per the lead source size. Therefore you have to take a look at the overall ROI for each of the lead sources as which one is working out for you.
Key Point: Fix the conversion rate
Monthly Recurring Revenue:
If you have one customer who is paying you INR 100 then your monthly recurring revenue is INR 100. If you have a customer who is paying you INR 1000 per annum then your monthly recurring revenue is INR 83.33.
Therefore in this scenario, the total MRR becomes 183.33 INR. Another important metric is net growth MRR. The growth has cared about a lot of potential investors.
Annual Recurring Revenue:
You can calculate this as: MRR X 12
For instance, you have INR 183.33 MRR then your annual recurring revenue comes out to be as 183.33 x 12= 2199.96 INR annually.
Customer Lifetime Value (CLV):
When you get a new customer, you need to calculate the worth of that customer to your business. This metrics becomes important as it decides the expenditure for acquiring a new customer. To calculate CLV you need to consider the following metrics:
- Average Revenue per customer: Getting back to the example we have taken in MRR. We have 183.33 INR as MRR. Now if we divide 183.33/2 since there were 2 customers in the scenario then the ARPC becomes 91.66 INR per month/per customer.
Now since we know our average revenue per customer, we can use it to calculate for CLV.
To calculate CLV we need to know the period/months the customer remains a customer of our company. Thus if the customer is for 6 months, then CLV becomes:
91.66 X 6= 549.96
- Attrition or Churn: As mentioned, to calculate CLV we require to know the months the customer actually remains with our business. Statistically, we can calculate this and the method is called attrition or churn. You need to calculate in the following way:
The total number of cancellations/ total number of customers you have.
If the number of cancellations is 4 out of 100 customers, then attrition is 4% per month. To calculate how many months your customers will be staying: 1/0.04 = 25 months. So your customers will be waiting for 25 months.
The advantage of getting CLV is now you can decide the amount that you are comfortable.
With this, CLV will be 91.66 X 25= 2,291.5 INR
Customer Acquisition Cost (CAC)
Now since you know how much is the CLV and you know the amount that you have to spend on your customer, the next question which arises is how much you need to spend if you have a certain amount from CLV to acquire customers, the answer to this you need to calculate CAC.
We calculate CAC as follows:
The total cost of sales and marketing / total number of new customers
The total cost of sales and marketing means the expenditure on conferences, press cons, etc. A total number of new customers here are those that you acquire through such sales and marketing strategy.
For instance: if we have a total costing of 3,00,000 INR for sales and marketing and the number of customers to be acquired is 150, the CAC will be:
3,00,000/150 = 2000 INR
Now CLV was: 2,291.5 INR
CAC is: 2000 INR
Therefore the CLV: CAC ratio is = 2291.5/2000=1.145 the lower the ratio, the better for your business.
Tips to get customers for your SAAS business and increase revenue:
- Consider getting rid of free plans: If your product or service has a price consideration, you can consider a trial version. You can see lots of people are getting converted. You are asking them to try before they buy.
- Shorten the free trial: Some trials are of 30 days. Some of them extend for 60 days or even 90 days further. Your customer if couldn’t find anything worth in 4 weeks, he won’t be seen in one week too. It becomes difficult for the salesperson to close the deal.
- Raise the Price: Many B2B companies charge less for their products. Be confident in your products. Customers do value quality and services. Make your product up to the mark and make the pricing appropriate. If you charge below the market rate, you may get underrated clients which are not good for your business.
- Establish an Enterprise Plan: Attract more prominent clients by offering them a custom enterprise plan. Your sales people can go behind these large accounts and can bring maximum revenue for your business.
- Offer Prepaid annual contacts: Give your customers the ability to pay you the four years service upfront. This way the customer gets the discount whereas you get a massive scaling in revenue.
- Don’t give away support: In SaaS markets, you likely to have customers who would require training. Many B2B companies do mistake to provide customer service for free. Be smart and charge your customers for standard services.
- Avoid Discount Trap: Many HubSpot COS Development companies who are underconfident give huge discounts. Keep it simple. Mention them as if they take your services for one year the discount will be 10% and so on.
Role of HubSpot the or increase in revenue for B2B SaaS Organization
1. From Stranger to Potential customer, map your sales process
One of the important metrics that revolves around the sales process is the conversion rate. You need to jot down the points on which a prospect comes closer to close a deal and becomes a potential customer for your salesperson. You need to create a simple roadmap which will help you o direct throughout your sales process.
2. Build a pipeline process
Since you have made a roadmap for the sales process, the next step is creating a pipeline which would aid your business.
3. Role of CRM
HubSpot CRM has contacts, companies, and deals as shown in the figure and asks you for selecting one of them to import. You have to maintain a CSV file of all the data.
4. Pipeline with deals
After your sales process is defined, set your CRM with deal stages for the particular pipeline. There are five stages in the deal domain- appointment scheduled, qualified to buy, presentation scheduled, decision maker bought in and contacted sent.
Tasks and pipeline stages are two different terminologies. Assignment means your salesperson is assigned some work that he/she has to do within the stipulated time.
The task consists of three status- not started, in progress and waiting. This way the deal is moved to a sale and thus helps the lead to drive down further.
6. Call Queue
You can add the contacts quickly and easily. These contacts are then handled by the sales team to complete a list of calls thus moving towards your target and goals.
7. Create email templates
To make emailing scalable, simplify your process with models that provide features like the personalization of your emails. You can schedule your emails too thus making a user-friendly sales operation.
The HubSpot CRM is a one-stop solution for your B2B SaaS organization. It is your user-friendly tool right from the customers from being strangers to potential customers in a sales funnel. With HubSpot COS Development, you can easily grow, reach and sell to your customers.
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