SaaS sales is about systems that drive momentum, scalability, and predictable progress.
That’s why every SaaS company needs a strong sales foundation, built on a combination of infrastructure, tools, and people. A well-defined sales operation — consisting of key hires, frameworks, and technology systems — will help you stay on top of your target market, no matter how quickly your industry is moving.
Even if you’ve built a great product with organic customer adoption, it’s not enough to wait to get discovered. Decision maker attention spans are spread thin, which means that multiple touchpoints are often necessary to close a buyer. Multiple follow-ups are the norm, especially for high-consideration decisions. Founders simply don’t have time to manage these moving pieces. So what are the right steps to take?
Start building your sales function as early as possible — but not so early that growth becomes unsustainable.
In the earliest days of a startup, the entire team is responsible for sales and growth. From the founders to early hires, everyone needs to keep eyes and ears open. But if everyone is helping out with sales, there’s a potential for operations to become scattered. Focus is key for your operation to remain stable.
That’s why it’s important to look at sales as a system rather than a series of ad hoc steps. SaaS startups need to be proactive about building their lead lists, nurturing prospects through their pipelines, closing deals, and ensuring a smooth onboarding process. The sooner the process is in place, the better, because everyone saves time and gains efficiency. The business also becomes more sustainable by introducing predictability around growth.
If your company has a stable customer base of at least 10 customers and you’re generating revenue, you’re in a good position to start building your sales foundation. So how do you know for sure? Fortunately, there are plenty of other companies that have been down the same path as yours.
According to Dharmesh Shah, co-founder and CTO at HubSpot, you need to understand the core economics of your business. That means getting clear on your customer acquisition cost relative to your customer lifetime value (CAC/LTV). Your CAC should present an accurate picture of your expenses, accounting for your sales people, marketing people, existing technology, and marketing campaigns. Our top quartile companies have a very high LTV/CAC of above 9.
This means an average customer generates 9x more revenue over the customer lifetime than they cost to acquire. Our median companies have an LTV/CAC ratio ranging from 3 to 5, which is still a very good return on CAC. Best-in-class companies have 8-10x LTV/CAC (around 4x that average), which is phenomenal.
When choosing to build a sales function, it’s important to make a metrics-driven decision and have a developed sales process in place, otherwise, there’s a risk.
Focus your operation around outcomes rather than vanity job titles
SaaS sales is a human function to its core — it’s about people doing business with other people. When you implement technology and systems, the end-goal is always to improve human interactions. For this reason, sales will always be a core part of your SaaS model. Even with a solid growth foundation, you need a sales org within a SaaS org, always.
At the earliest stages of a sales operation, it’s critical that you invest in results – you don’t need sales people — you need sales. When making your first key hire, bring on someone who operates as a revenue engineer rather than a salesperson. I like to call this a utility player: instead of account executives (AEs) from big/top companies where sales teams are massive and there are tons of warm leads, bring on someone who isn’t afraid to get their hands dirty– someone who is metrics-driven and also can take on a high volume of calls, emails, and talk time with prospective customers.
Especially at an early stage company or a sales team that’s just getting off the ground, it’s more important to have someone who is flexible, and agile (possibly even someone with fewer years of experience but a high appetite to succeed) because their impact can be much higher on your sales org.
As Mark Cranney, go-to-market advisor has written for a16z, sales is about creating value for customers. The role of a first sales hire is to help organizations understand why your product or service is needed. Your company will already have to have some semblance of a product-market fit, so you know who you’re selling to and what your ideal customer profile (ICP) is, and this will inform your lead generation strategy. A formal sales function promotes the value of a product or service in a way that an organic growth strategy simply can’t.
Your SaaS startup’s first sales hire will be self-sufficient in driving impact for your business. In addition to generating revenue, the right first hire will be able to implement systems for continued growth. This software foundation will carry on with your company for years to come, so it’s important to hire a person who can choose the right solution wisely.
Inbound vs outbound sales
For initial inbound leads, it can make sense to rely on your marketing team to help generate those numbers. But for outbound sales, you should absolutely rely on your sales team for research-driven outbound targeting and reach out.
At Capchase, we invest in our business development reps (BDR) and sales development reps (SDRs) to test different copy and content for outbounds leads to experiment and iterate in order to gather valuable and actionable insights and then using those insights to strengthen the quality of your marketing team’s inbound lead generation campaigns. The relationship should inform one another with a healthy emphasis on your sales team’s efforts generating a bulk of the sales pipeline.
Envision your software as core infrastructure
You can only manage your sales process out of spreadsheets and your email inbox for so long.
Knowing that SaaS sales cycles can take upwards of 18 months, it’s important to build operational processes for managing leads, documenting conversations, and staying on top of follow-ups. That’s where a customer relationship management (CRM) platform enters the equation.
CRM technology helps you manage discussions with customers and prospects. The software helps with contact management, sales management, productivity, and audience listening. CRM data is also valuable for building marketing automation systems. You can integrate your CRM with other tools in your technology stack, including your financial operations. Example CRMs include HubSpot and Salesforce.
Both HubSpot and Salesforce support integrations with partner ecosystem software.
Here are a few signals of being ready for a CRM:
- You notice that it’s hard to keep up with lead flow
- Your customer data is scattered and decentralized — your team struggles to access it
- There’s very little teamwide transparency into conversations
- You’re not able to deliver the level of customer service that your business needs
- Processes feel disjointed
Use your capital wisely
Your sales operation is one of the most important growth drivers in your business. But you need upfront working capital to fund your expenses — especially if you’re hiring a team or implementing software.
Capchase’s non dilutive funding, programmatic financing solution can help with this expansion effort, even if you’ve raised venture capital funding. Capchase Grow, our core lending product, is a revolving line of credit tied to your SaaS business’s monthly recurring revenue (MRR). You can draw funds flexibly, as you need them, with repayment terms that make sense for your business.
One of our goals at Capchase is to help startups improve their capital efficiency. Well-orchestrated financial operations are crucial for growth, especially if your team is looking to raise additional rounds of venture financing.
With a crystal clear understanding of your financing options, you can maximize your runway and use your capital wisely. Here is an example of our customer, Blackthorn using Capchase to sustainably expand their headcount, in order to pursue growth opportunities in the market.
B2B environments are people-driven. SaaS companies and sales go hand-in-hand.
When it comes to getting your sales operation off the ground, you have more options than you may realize. The key is to identify and focus upon the levers that are most important to your business.
SaaS sales is about education, communication, and creating a sense of product enthusiasm. Remember that enterprise buyers have different considerations and needs than individual adopters.
You can build your sales function incrementally, as quickly or as slowly as you need. As a founder, it’s important to make responsible decisions — learn how much working capital you could access from Capchase to accelerate your growth through our runway calculator.
Learn more about my thoughts on this topic below.