You may also want to view our webinar “Selecting target markets for your Cloud solution”
Here are some ideas on how to take aim on SaaS solution sales.
Start with Your Existing Clients
Start by going through your client base to identify those who are at or past the normal replacement cycle. If you have a replacement cycle of five to seven years, start with clients who are at that stage. Many companies are unwilling to buy the new version of a product for budget reasons. Offering them a way to get great new functionality on a subscription basis can be appealing.
Also, take a look at your pipeline reports for the past year and try to identify qualified prospects who used budget as the reason for not buying. Go back and find out if they bought from a competitor. If not, they may still have a need that can be met with your SaaS solution.
Explore Opening New Markets
These are markets that have always been there, but out of your reach due to price sensitivity.
The further you go down the price pyramid the more prospects you’ll find. You’ll also find they have a stronger interest in SaaS.
Cash flow is why. These companies might not have the cash to spend $25,000 on a software solution plus $25,000 for services, but they are willing and able to spend $2,000 per month to get the same functionality. More established smaller companies will make this decision when they hit the hardware refresh cycle.
Toward the bottom of the price pyramid you’ll likely find startups. They rarely buy their own servers, desktops and on-premise licenses. They do as much in the Cloud as they can.
Think Outside of the Border
As a general rule, it is a good idea for software companies to consider international expansion, especially those that are based in smaller markets.
The U.S. is by far the largest SaaS market in the world. For traditional IT, the U.S. represents about 35% of the worldwide spending, while it is 60% of the SaaS market.
There are strong SaaS growth rates with small and mid-sized companies in emerging markets. Many of these companies have never invested in their own IT infrastructure, they have gone directly to the Cloud.
Latin America is largely overlooked by both on-premise and SaaS vendors and therefor represents less completion than many of the European and Asian markets.