Most SaaS Sales Teams Are Only Tying One Half of the Bowtie

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Most SaaS Sales Teams Are Only Tying One Half of the Bowtie

Most of us can relate to an “oops” moment when we walk out the door and realize we’ve grabbed the wrong jacket, left our wallet on the countertop, or maybe even mismatched our socks. The consequences of these momentary lapses are rarely significant, but if we are consistently going out in the wrong clothes, it makes life just a little bit harder.

I thought about this when I read Jacco van der Kooij’s piece on SaaS sales methodologies. He says that traditional marketing and sales methodologies focus a great deal on filling the pipeline, qualifying prospects, and closing sales. But not much at all on what happens after the initial sale.

For SaaS companies, he likens this to tying one half of a bowtie and leaving the other half undone.

What Is A Sales Bowtie?

In traditional sales models, sales is only responsible for getting buyers to the sale and closing it. After that, product delivery and customer service teams take over, and the account goes into a holding pattern. Account management teams might be responsible for attempting to sell additional products and services to the same company, but product delivery and customer success are treated as separate entities from sales.

As van der Kooij illustrates, this can be envisioned as a marketing and sales funnel, where you have leads come in one end and gradually narrow down to a sale at the end.

But van der Kooij envisions another side to this process, which he claims is especially important in SaaS sales. He calls it the bowtie.

Here, we have the sales “funnel” on one side, with the initial sale representing “tying the knot” in the center, and then a whole other half of the process on the other side of the knot, forming a full bowtie shape.

Why Do SaaS Companies Need to Complete the Bowtie?

In traditional (non-SaaS) business models, most of the company’s profit comes from the sale of a product or service. Once the sale is made, the transaction is complete from a revenue and profitability standpoint. In this model, it makes sense for the sales team to back away once that initial sale is made, and to let product delivery and customer service teams take over.

But in a company with a recurring revenue model, as with most SaaS companies, profitability relies on customers remaining customers after the initial sale. In fact, in many cases, the sale won’t be profitable until the customer has remained in the program for a number of months, or even years.

This changes the equation. In the SaaS world, your customer’s success with your product is directly related to your profitability. A customer that is not having success with your product, won’t continue their subscription, and won’t become profitable. On the other hand, a customer that experiences significant benefits from your product is likely to remain a customer for a long time, and to invest in add-ons and premium subscriptions, becoming increasingly profitable over time.

In a subscription-based world, your customer’s success is directly related to your profitability.

In this world, it pays to invest on the other side of the knot.

How to Tie the Bowtie

Jacco’s bowtie demonstrates the importance of ensuring that your customers not only buy the product and log into it, but also that the product works as described, achieves the impact the customer wants, and that they have access to upgrades that can help them grow even more.

For this, your teams need a strategy, a process, and the ability to implement that process.

When we built the Account Growth module in Membrain, we did it to help customers with what most of them were calling “account management” at the time. But we envisioned it to be so much more than that. It not only enables you to manage your accounts, it enables you to build and execute a milestone-based process to help those accounts achieve the success you promised them, and to grow with you as they grow.

Many of our most successful customers are using it exactly this way. The processes they build inside the tool not only to help salespeople continue into the second half of the bowtie, but also enable them to work hand in hand with product delivery and customer service/success teams to be proactive in supporting the success of users.

Historically, many of the big-name SaaS companies have invested in making their products “sticky” by being invasive, comprehensive, and expensive to implement (and expensive to leave: Salesforce, for instance, often includes predatory language in their contracts that penalize companies for leaving their platform).

This approach is like walking out the door with your tie untied. You might get where you’re going faster, but you probably aren’t making the impression you meant to.

Customers are fed up with expensive, top-heavy, predatory products, and that presents an opportunity for companies that are ready to tie the other side of the bowtie. Instead of penalizing customers for doing right for their company, we need to help them do right for their company, by being right for their company. We need to tie the other half of the bowtie.

What do you think? Is your team doing a good job at both ends of the bowtie?

This article was first published on the Membrain blog here.