Blog Entry

In today’s tough market, VARs and others in the IT space are looking to new delivery models for a business boost. One important emerging paradigm is the Software-as-a-Service (SaaS) approach, which centers around the sale of remotely hosted applications and eliminates many of the longstanding assumptions, hassles, and roadblocks that are part of the traditional software sales model.

If you’re considering making the switch to SaaS, there are a lot of variables to think about before you take the plunge. Most significantly, it’s important to understand that the SaaS paradigm entails an entirely new mode of doing business. If you try to retrofit your standard marketing, sales, and customer service strategies to the SaaS model, you could be setting yourself up for failure.

Although there are some points of similarity between traditional software sales and the SaaS paradigm, most experts recommend taking a fresh approach and scrapping anything and everything about your old business model that doesn’t mesh with the SaaS philosophy. Here are a few tips to help you get started.

Retool your sales team.  The expectation within the SaaS sphere is a pared-down, streamlined buying experience. It’s likely that you may not need as many professionals and employees as you would use in a traditional IT sales operation. Instead, some experts recommend choosing a select team of highly qualified sales staff members, each of whom boasts a broader functional skill set.

Revisit your sales quotas and expectations.  At the current juncture, the SaaS space is defined by lower-margin, higher-volume sales, whereas most VARs may be used to handling a smaller number of high-value corporate accounts. There are a number of variables that will determine the precise shape that your SaaS enterprise will take, but it pays to be prepared for the possibility that you might be dealing with a high volume of smaller transactions.

Revise your understanding of your target market.  Most VARs are accustomed to dealing with IT-savvy CIOs and other higher-level decision makers. In the SaaS sphere, however, it’s more likely that you’ll be selling to individual end-users or small mom ‘n’ pop shops. If your typical sales pitch assumes a high level of technological sophistication, you might want to take another look at your new market and adjust your approach accordingly.

Remix your marketing message.  Now that your target market has shifted, your main marketing message—as well as the media in which you convey it—will likely need to be updated, as well. Trade show swag and industry publications aren’t likely going to be very effective at reaching your new audience. Eschew niche marketing strategies and focus on developing a broader, more democratic approach that involves copious online and email coverage.

Rethink your long-term strategy.  Once you’ve got a better handle on the ways that the new SaaS model is going to impact your day-to-day operations, it’s time to take another look at your overarching strategy. Devise quantitative and qualitative metrics to measure and define your success. Just remember that because the SaaS space is still dynamic and evolving, it will probably be impossible to project too far into the future with a high degree of accuracy.

Does the idea of switching to a SaaS model hold any appeal for you? What do you think about the long-term prospects of the SaaS approach? Give us your take on it in the comments.