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How SaaS is killing karaoke and the “entertainment” column in expense accounts everywhere
Where have all the singers gone…
A couple portfolio companies that I work with have SaaS based products and have recently searched for and hired sales leaders. Working with them on these searches got me thinking about the impact of SaaS on the changes in the sales process and what that means for hiring sales people if you are running a SaaS company.
When I worked at AND 1 Taiwan and China became second homes. Our brand was growing and we needed more factory space for production, we needed more suppliers for leather and more CNC shops for EVA foam and rubber molds. Managing this process taught me a lot, but the biggest change was my tolerance for whiskey and my ability to sing karaoke.
The sales culture was all about relationships. Pricing, priority and product selection/availability were all determined by your relationship with the supplier and specifically with the designated sales representative. Reciprocity of this relationship based decision making was assumed and so Because of this sales process, sales guys spent their “entertainment” budgets and then some. They took us out for fancy dinners, worked hard to make sure we all drank too much and ended the night with trust building exercises at the karaoke bars.
Enterprise software used to be sold as a product. The software as a product was sold to a director or VP, not the end user. This VP had a check list of features that needed to be included in the product spec and they had a static use case in mind as they made purchasing decisions. Often this sale was made face to face and based on a relationship between buyer and seller. “Entertainment” budgets were believed to drive ROI and probably did.
If you are building a SaaS product you know the impact of cloud based architecture on software development and business infrastructure is dramatic and has been covered to death. If you are looking to hire a head of sales for your SaaS based business, you should also know the impact of SaaS on the sales process and the money you will save in your entertainment budget.
As the cloud roles in, SaaS is eliminating the B2B sales approach. Software as a service is delivered at a monthly cost that fits even the most junior discretionary budget. Now it is possible for any employee to enter a credit card and click check-out. With SaaS, every sale is B2C and every sales person needs to understand their product as a user or be out of a job.
The old audience was VP’s and directors who wanted to choose a product that offered the right feature set so they didn’t get fired for making the wrong choices. The new audience are practitioners who want to buy a service that makes it easier for them to get their job done. The old audience was VP’s and directors who wanted to buy from someone they knew and trusted, and could blame if they made a mistake. The new audience are practitioners want to buy from someone who understands the first 5 things they do when they log in on Monday morning. The old audience wanted to be “entertained” and the new audience wants to be educated. This is a critical shift.
When the initial sale is made to an end user, the product is the primary consideration and it will be tested to see if it meets specific needs. The interaction with the customer is typically not face to face. The sale is driven by how well the sales person understands how the product addresses the user’s professional needs and day-to-day pain points.
In this environment, sales people are tasked with making the Monday morning log-in easier rather than selling via the Thursday night log-out. B2B is replaced by B2C and entertainment budgets need to be shifted to sales education budgets.
Look forward to your thoughts on SaaS sales or karaoke in the comments.