What are best practices for selling Software as a Service (SaaS)?

What are best practices for selling Software as a Service (SaaS) to my customers?

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Software as a Service (SaaS) benefits from componentized services that have a low price point and offer many features to customers who consume the services. A company planning on selling SaaS has to understand how to monetize its services. It has to maximize the number of usages of its service, either through the number of customers or the number of times its service is used. Price point should be considered along with features: with a certain number of customers, the price point can be much higher than a per-usage cost.

Sales resources have to be tailored towards customers. With a service focused on a large number of customers, traditional sales methods will not be cost effective. Frequently a free trial of the service works best for most customers. With a per-usage charge for a smaller number of customers using the service many times, the traditional sales methods may be appropriate.

Your sales force must keep an eye open for new features that can be added to the service. Those new features should maximize reuse. Developing services that fit 80% of the customer's requirements results in a greater return on investment than chasing the remaining 20% of the requirements.

This was first published in April 2008

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