A slow sales process is a bad thing for most companies, but it’s especially bad for software-as-a-service (SaaS) companies. Because they are usually selling via a subscription, revenues delayed are revenues lost.
With traditional licensed software, if a purchase gets pushed back 3 months, the company can simply recognize the revenue in the following quarter. Not ideal, but the revenue isn’t lost.
Not so with SaaS companies. If a customer gets bogged down through the evaluation process and the purchase is delayed by 3 months, that’s 3 months of lost subscription revenue.
How does this happen?
There are lots of ways that SaaS companies slow up the purchase process. Let me point out a few:
For many SaaS companies, their website is the front door to their business, the place where prospects will first come into contact with them. It’s the first step along the path toward a purchase.
But too often a company’s website clutters that path. Instead of opening an unobstructed path to convert visitors into paying customers, vendors insist on publishing every single thing there is to know about their solution. Every detail, no matter how obscure, gets some real estate. And finding some place to present all this information means the navigation is sprawling with lots of tabs sub-navs, and drop-downs and pages that scroll on and on and on.
Cramming every last bit of information on a website might be appropriate for certain B2C solutions or when the product is being sold directly from the website. But for solutions that are being sold by humans that are in direct contact with the prospective customer, all this information may just be overkill.
Let the salesperson handle some of this work. They can go through all the detail and answer a prospect’s questions on any particular feature. Cramming in too much detail just gets in the way and delays a purchase.
Poorly organized marketing efforts
Sometimes SaaS companies haven’t put in place a coherent, logical marketing plan. They haven’t organized their efforts to move visitors expeditiously from prospect into paying customer. Instead, they’ve got a hodgepodge of marketing programs that sends prospects here, there, everywhere, and nowhere.
The company may be running email campaigns, social media programs, SEO, paid adwords, events, and more, but it’s not at all clear where each program fits in the overall customer acquisition process. They may be attracting lots of visitors to the website for example, but there’s no program to convert the visitors into prospects. Or they’re collecting contact information from lots of prospects, but there’s nothing to convert them into qualified opportunities and paying customers.
Without a clear path, one where programs are in place with a specific task to move prospects forward, there’s no way to see where they are bottlenecks and gaps where prospects are getting stuck. (See “Five ways your SaaS marketing plan could go wrong.”)
Sending the prospect backwards
In a worst-case, poorly designed paths actually send the prospect backwards, away from a purchase. Instead of moving a prospect from point A to point B to point C, they send them from point B back to point A.
Prospects responding to an email, for example, are directed back to the home page of the website instead of a dedicated landing page. They’re treated as if they’re a completely unknown visitor. Or a prospect that’s already had a direct conversation with a salesperson gets sent generic introductory marketing material, nothing personalized that acknowledges their specific needs.
Don’t waste the biggest portion of your budget
Efficient customer acquisition is essential to a SaaS company’s success. And poorly designed processes that impede the path from prospect to paying customer can be disastrous. After all, for most SaaS companies, customer acquisition expenses will be where they spend the most money. They can’t afford to waste it.