As a software company, your sales force is primarily focused on signing up new customers, but that’s not all they should be paying attention to. High-margin software maintenance and other subscription-based software is an often-overlooked source of revenue, and it affects long-term customer retention.
Even with newer business Software-as-a-Service (SaaS) subscription models, the initial transaction is just the start of your relationship with the customer, and they continually evaluate your sales and service performance after the initial contract is signed.
Traditionally, the business software sales process was just a single transaction: You closed a sale, collected the revenue and moved on to your next prospect. Today, you need to establish an ongoing relationship with your customers.
And to do that, you need a different sales process.
Your Software Sales Must Focus On Renewals
Today, more business software deals are sold in shorter sales cycles than ever before. Because of this increased closing speed, many salespeople assume they don’t need to follow up and ensure that current customers are renewing their subscriptions. That assumption is dead wrong.
Your sales team might be closing new customers at a faster rate, but if you’re losing just as many current customers at the same rate, your business has no top-line growth.
You need to hire salespeople who connect all the dots for prospects and pitch in a way that guarantees customer renewal. In every renewal period, a customer must make the conscious decision to pay your subscription fee – and your salesperson’s pitch should be keeping that recurring decision point in mind.
Adopt A Long-Term View
In order to be successful in the new software sales environment, your sales force needs to remember the lifetime value of a customer – not just the short-term value of a quick sign-up. Salespeople need to take a full sales cycle approach that touches on every aspect of the customer experience.
This doesn’t just apply to ensuring renewals, either: Upsell pitches on new product features are critical and increase your profit margins even more. However, a customer only purchases upgrades or new features when he or she trusts the relationship you’ve already established.
What would your revenue stream look like if you had 100% customer retention for your software? The view of your sales pipeline would be dramatically different, wouldn’t it?
Talk To The Rest Of Your Team
Capturing the long-term value of a new customer isn’t just the domain of your salespeople, it’s also the task of your entire company – from customer service, to fulfillment, to client renewal and even administration and marketing.
To accomplish this team-wide effort successfully, you need to establish more opportunities for communication and cooperation between teams so you’re able to more proactively solve any customer issue. Create cross-company customer feedback loops, such as:
- Feedback loops between customer service and sales
- Feedback loops between sales and marketing
- Feedback loops between fulfillment and sales
When your customers have a question about your software, they expect a fast and helpful reply, and they don’t want to wade through several contacts at your company before they get an answer. If they don’t receive a prompt, helpful reply, they’ll soon be looking elsewhere for their business software needs.
Research The Marketplace
Your software sales and customer service processes don’t occur in a vacuum: Not only are your competitors talking to your same prospects – and even long-time customers – but your customers are also talking more to each other than ever before.
Ask yourself: How often do I talk to my current customers, even just to check-in? And, how often does my competition talk to those same customers? It might be more often than you think. The only way to continually outsmart your competitors is to research their approach and go one step further to lock-in customer loyalty.
Sometimes your worst competition is a bad review posted in a place all of your prospects are looking. Here’s where customer service feedback loops become even more important: If customers aren’t pleased with your subscription-based software or the service they received, they’ll post their feedback in industry forums and discussion boards such as Spiceworks or the Dell Tech Center. What once was a problem with just one customer becomes a huge barrier to closing more sales with millions, so you must stay on top of these reviews.
The business software sales cycle is constantly changing, but the aspect that always remains the same is building a solid customer relationship based on trust. Remember these tips as you embrace this new software sales process with your team:
- Focus on customer renewals, not just initial sign-ups
- Adopt a long-term view that considers the lifetime value of a customer
- Establish feedback loops with your other teams to ensure continued customer happiness
- Study your competitors’ approaches and lock-in customer loyalty
- Research your reviews in the marketplace for additional feedback to catch problems before they get out of hand – especially if the end-user of your product isn’t the buyer
Struggling with lead generation or closing deals in your software sales process? Click below to download a free tip sheet from Invenio Solutions® and start generating warmer leads and creating a more successful sales cycle for your business software company.