The SAAS sales funnel has been around for over 150 years and is still the cornerstone for building a successful sales strategy. The funnel normally includes stages of the sales cycle in which the sales reps cover a key piece of the sales process. It has been one of the most effective ways for sales managers to manage sales reps as it breaks down the sales pipeline into smaller bite size areas of focus. By measuring the conversion rates between those stages against other reps, sales managers can determine the strengths and weaknesses of the sales team.
A normal sales funnel in SAAS has 5 stages. Here is your basic sales funnel template:
Stage 1: Prospecting
Prospecting is when salespeople find potential customers to buy their company’s product or service. Lead generation is when marketing efforts generate interest in products and produces leads for the sales team. Both are key because more targeted leads in your pipeline mean more opportunities to close deals.
Stage 2: Qualifying
Qualifying is the stage at which salespeople determine the relevance of the product they are selling to their prospects.This includes ensuring product fit, industry fit and most importantly making sure there is a need for your product in those leads. The most important aspect in the qualifying process is that you are able to get a hold of the prospect and engage.
Stage 3: Initial Meeting
The initial meeting is the most important step in the sales funnel as you have a streamlined process will both be able to understand the client’s pain points, provide a demo and determine who your champions are within your prospecting companies are. Check out improving your sales funnel here.
But in a standard sales process the initial meeting should be focused on understanding if your product is a good fit for the potential client and who the key decision makers are going to be in buying the product. Focus on getting your client bought into your product and process.
Stage 4: Demo
After the initial meeting you should have a follow up meeting for a full demo of the product. This meeting includes all of the key stakeholders and decision makers. So if you are selling a SAAS sales product, you should have sales operations, the sales vp and any key sales managers along with anyone else who can veto the product down the line.
Determine Clients Needs
In the demo phase you want to have an understanding of their needs and tailor the demo to those needs. You should also let the prospects drive the demo as much as possible by understanding their needs at the beginning of the call. Being flexible on the demo is key to keeping the prospective clients engaged.
During the demo, feel out who is the most receptive to the product and how it can solve the issues they are having and start to engaging that person in the conversation to get the others involved and pitching for you. This is more of an art then a science but you want to create a genuine relationship with this person, asking for feedback and following up after calls to get their personal thoughts.
Determine Next Steps
Don’t leave the meeting without securing next steps. In a perfect world you want to save time to talk about pricing and have them agree to the terms on the call. We don’t live in a perfect world, so if you have to have another meeting, get it on the calendar right then. Make sure you have a complete view of their closing process.
Stage 5: Negotiate Terms
In negotiating terms and pricing make sure you use your newly founded champion to gauge the final proposals before they get sent to the whole team. Everyone is looking for a discount no matter what, so make sure you have a little pricing flexibility left near the end of negotiating to get the deal closed. The best sales reps are able to get an annual upfront contract signed ensuring your business has time to create real value for the client.
These are the standard SAAS sales funnel stages and your starting point for setting up your sales organization within any CRM. If your sales funnel is setup, the next step is to start to look for efficiencies. If you are interested in learning how to improve your efficiency in your sales funnel, please connect with us at TwelveZeros as we offer a free sales intelligence consultation!
10 years of corporate finance and forecasting experience at different technology startups across the US.