Most salespeople will say that the hardest part of their job is the close. In SaaS this can be equally true, because it’s not just about getting the sale of a one-time product, but closing the right kinds of clients so that they don’t simply churn out of your subscription model later.
When we refer to “closing,” it’s not necessarily just about the ultimate sale; a close can be any interaction that a client has with a rep where the prospect is asked to commit to something. So an early close for a SaaS could be getting the client to agree to a free trial.
This means there are many opportunities along the way to get the close right (and wrong). Is your SaaS making any of these closing mistakes?
#1. Being Too Generic
If you focus too much on the generic, high-level features of your product, you will not really speak to the prospect on a personal level. Professional sales coach Barry Maher says:
“The #1 sales pitch mistake, one I encounter all over the country (actually all over the world) entails…Salespeople acting like it’s all about their product, their company, or themselves. It’s not. It’s all about the customer. Which means finding out about the customer is far more important than explaining that ‘deal of a lifetime’ salespeople would like customers to believe they’re offering.”
Relating to individual needs and the benefits to them is a far more powerful technique. What’s in it for the customer as an individual? If you want to effectively close with the client, they need to be able to ascertain what the unique value is to them.
This means that you need to spend a considerable amount of your time listening rather than talking. Tie your solution to a specific pain point that the prospect has and make sure the connection is clear to them. Anyone can read up on your generic features, but knowing how your solution will deliver value and solve their specific problem is what really sells.
#2. Closing The Wrong Prospects
You may be keen to close as many deals as you possibly can, but if that means closing prospects who are not a good fit for your SaaS, this is another mistake.
Closing the wrong prospects can harm your sales because:
- You can end up with more issues for customer support, taking your focus away from clients who genuinely need your service.
- The wrong client won’t get value from your app, will end up leaving and may give you poor reviews as a result.
- Any feedback you get from them will not necessarily be good for the development of your product.
- The time you spend on closing the wrong client could have been spent closing one who is a better fit and who is more likely to stay with you.
Instead, develop very clear personas for who your ideal clients are and focus on closing only those who are a good fit. Make sure everyone in your sales and marketing teams knows the clear criteria for prospects you want to bring onboard and works together to close the right ones.
[tweetthis]Closing the wrong prospects will only cost your SaaS sales in the long run.[/tweetthis]
#3. Engaging In A Price War
If you’re closing sales by haggling on price, it’s going to cost you more than just money. As we’ve discussed previously, engaging in a price war only leads to a race to the bottom and undermines the true value that your SaaS can deliver.
If a prospect is stuck on your pricing, there’s a good chance that either a) they can’t see the value your product will deliver to them (perhaps you haven’t explained it well), or b) they aren’t an ideal client for your product anyway so will never derive value from it.
Either way, if you end up giving in and bringing your pricing down, you can end up with the same problems we highlighted in the last section. You could also lose clients because if you discount, you are in danger that they view your product as just another disposable commodity.
The solution is to emphasise value over price early and often.
#4. Not Responding Fast Enough
In this age of inbound marketing and instant everything, people expect responses much faster than they have done in the past, yet studies show that most companies are not responding fast enough to leads.
A further study found this:
“The study revealed that the odds of making contact with a new lead are extremely high if you call within the first 5 minutes of submission,” said Elkington. “The odds drop off dramatically by the first 30 minutes. Specifically, a rep is 100x less likely to make contact if the first call is made 30 minutes after submission. The odds of making contact drop by 3000x if the first call is made 5 hours after lead submission.”
Image source: Forbes
Response times are not limited to initial leads. If you’re slow to respond to queries during the trial period or even to respond early enough to the signs that a customer is going to churn, you could be sabotaging your sales before you’ve even had the chance to try closing.
The solution to this one is simple, really (though not always so easy to execute). Be responsive. Be available and proactively monitor the signs that a client is losing engagement with your brand.
#5. Not Letting It Go Soon Enough
Persistence is understandable when you’re striving to close a sale, but how much is enough? Here’s what Demochimp founder Garin Hess had to say:
“Too often we persist. “Never, never, never give up” goes the common adage. Well, that’s good advice if someone is bombing your homeland, but that’s flawed thinking in sales. In sales we need to give up as quickly as it makes sense. Why? Because even though it feels like failure, in reality every minute of time and ounce of energy we spend on that prospect that isn’t interested is time and energy we could be spending on a prospect that truly is a great candidate. Think of the opportunity cost!”
This one really comes back to knowing very well who your ideal client is and disqualifying early. If someone is not an ideal fit, don’t continue to pursue the close. Know when enough is enough and move on to the next prospect who is a better fit.
We always work hard to close sales and every SaaS is invested in growing their businesses, usually as quickly as possible.
The thing is that this eagerness to close can lead to a “close at any cost” type of mentality and the kinds of mistakes that can cost you sales in the long run. If you’re closing the wrong customers, not emphasizing value over price, focusing on generic features, not responding quickly enough or not knowing when to let go, these are mistakes that can blow sales and kill your business.
Closing for the sake of the sale may give you some short-term growth, but in the longer run, more churn. Spend the time to close the right clients and build sustainable growth.