

How Cheap a Product Can You Have And Still Have Salespeople? - jasonlknm
http://saastr.com/2013/08/15/smb-sales-reps-how-low-can-you-and-your-acv-go/

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patio11
It might not look like it, but this is one of the most important things to hit
HN this month (for those of you who have SaaS businesses). I sort of wish I
had written it. The math comports with the experience of myself and consulting
clients (with the obligatory "It's handwavy, break out your own Excel
spreadsheet to see if it makes sense" proviso), and "You can use hybrid high-
touch/low-touch sales processes on accounts in the $80 to $250 a month range"
is one of the best kept secret weapons in SaaS right now.

In particular, note that bit about the "$99 a month" thing. I once had the
educational opportunity to work in the same room as a sales guy who was
working a very similar queue of inbound leads, and was mentally scoring his
conversations while doing my gig. I'm pretty sure that he added north of
$1,000 in monthly recurring revenue _in a single day_. At any non-broken SaaS
company, all guesses for churn would mean "Holy cow he is generating a
_stupefyingly_ high ROI. He's going to be cash flow positive after doing this
for like 6 weeks and then be a total gravy machine even if he's as good at the
discussion about his commission check as he is on these phone calls."

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acw
Quick question: Do businesses expect phone support if one is
selling/onboarding by phone? My gut is that they would, but wondering if I'm
missing something.

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solistice
You can go as low as 60ct. At least that's the amount of money I pay for a
scoop of icecream at the local ice cream place, and they have multiple people
doing sales, as well as manufacture, distribution and payment processing.

Technically, an ice cream palor has all the components a PaaS business has,
but they have incredible conversion rates due to highly qualified leads, and
their turn around time for a single sale is within less than a minute.

Now when you go to an ice cream parlor, a lot of the information is implicit.
You're going to get some ice cream, these are the flavours we have, these are
the flavours you like, and this is the price of one scoop. The sales person
doesn't have to explain to you why you should buy ice cream, which is why
these "sales conversations" boil down to "I want one scoop chocholate and one
scoop lemon".

Odds are that you can do that in your SaaS business to. Of course, what you're
selling isn't commoditized like ice cream. You'll need to do some explaining,
and there are things that will come up again and again. Now the laziest way to
answer these questions is the veritable FAQ. But the moment I switch to your
FAQ, buying is put off for a while. Hell, I might even decide it's too much of
a hassle to buy anything from you.

The most effective way seems to be to put those questions into your funnel
before a customer gets to talk to your inhouse sales team. In fact, explain
everything about it, and then offer a free call on how to tailor your solution
to their business. That way, all questions about the merit of ice cream, the
price of ice cream, aso. are out of the way, and the sales conversation is
stripped down to "So what kind of ice cream? Want sprinkles?"

If you use your sales people for what they're worth, I believe you can press
the price down even further.

