6 Ways To Drive Down Cost of SaaS Sales


I recently heard two stories of companies who struggled to grow and please their investors.

In both cases, they blamed a high cost of sales.

I’m proud to say we’ve achieved a very low cost of sales at SalesLoft. So what’s driving it? SaaS companies like ours inherently have the benefit of capital efficiency, but there is a lot we can do to drive additional costs out of sales (of course you can always raise your average contract values, but we’ll hold that topic for a future post).

Here are 6 Ways to drive down cost of sales:

#1 Make it easy on your buyers

We’re a broken record with this message. Making it easy is a core tenant to sincere selling. In order to move customers through your funnel faster, you HAVE to make it easy and fun. Here are a few ways:

  • Send short sales and marketing emails with a single call to action
  • Provide fast and loving support to all users (even free – see below)
  • Allow customers to pay in the app (we only do this on our smallest plan but are considering bumping it up)
  • Use digital contracts through Google docs & Echosign (send quickly after the customer has agreed to terms)
  • Keep the app simple. Use social sign-in during the signup and login process so users don’t have to fill out a bunch of fields or remember passwords

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#2 Offer a free taste

Having a free version of SalesLoft has made a huge difference to our sales cycle.  It’s enabled our customers to get closer to buying before they come in contact with our sales team. That means our reps are only focused on late stage qualified leads. When you do this right, you’ll start sales cycles with emails like this:

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#3 Hire great reps

Not just good ones, great ones. Now this is hard. Here are a few recommendations. We’ll break the advice up into two parts (finding & attracting talent).

Finding them:

  • Make a solid job post and be creative. Focus more on what the hire will do to be successful and less on the “qualifications” needed.
  • Share this document like a mad man…social, email, verbally in social settings, blogs (see bullet above), etc. Job postings are an opportunity where it’s ok to be “shameless”.
  • Target specific companies whose reps have hit a glass ceiling

Attracting them:

  • Have a strong sales comp plan. Provide unlimited upside on commissions
  • Provide a path to promotion (ie. 6 months on quota, you get a promotion and get to hire a new rep to work under you, 12 months = new title and another hire). Check out these guidelines from Jason Lemkin on hiring sales people.
  • Provide testimonials and let candidates hear the value of the product first hand
  • Bonus – In some cases you can hire a user of your product. Find an evangelist and you’ll already know you have someone with passion

#4 Drive high volume of inbound leads / free users

Having a low cost of sales means spending time with the prospects most likely to buy.  It makes it easier if you have a lot of these :) We generate over 1300 inbound leads each month. Ok, we could write a novel on this one but it all starts with content. Here are some recommendations:

  • Get in the shoes of your customers and write like a mad man for them (not you).
  • Invest a lot of time into influencer marketing
  • Create a rhythm and cadence for your content production.
  • Incorporate viral sharing into your offering

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#5 Communicate to your users based on their behaviors

If you’ve adopted the freemium model and are generating a ton of inbounds, the next step is to analyze user behavior so you can focus on those who “gets it”. At SalesLoft we measure and deliver the following:

  • Scoring of prospects based on # of logins and pageviews in app
  • We provide sales with a daily usage chart via email. In our case, it shows how many prospector imports were performed in the last 24 hours
  • Automatically send emails: 1) when they haven’t used the app over a period of months 2) when new features come out 3) if they haven’t used a particular feature yet.
  • In-app user satisfaction surveys that pop up every 6 months. Sales gets an email whenever they make a comment. They look like this:

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#6 Simple onboarding

We’re back with the theme of make it easy on them. One of my favorite parts about SalesLoft is the simple salesforce.com integration. It’s really as easy as clicking two buttons to get started with our paid version of the product. We reference it over and over again in our sales calls and I’m confident it plays a major role in our sales cycles.

Focus on speeding up the time it takes to get customers on board.

#7 Provide fantastic support for free users

We already mentioned this but it’s too vital not to have it’s own header. We give our heart, blood, sweat, and tears to our customers. They’re what make business worth running and will translate into easier sales, more second-order revenue, and more referrals.

SalesLoft CEO, Kyle Porter. Circle Kyle on Google+!
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One Response to “6 Ways To Drive Down Cost of SaaS Sales”

  1. Anthon Grigg October 14, 2013 at 12:32 pm #

    Wonderful post, keep it up guys!

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