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The three different areas of SAAS are:
- Commodity
- Middle-tier pricing
- Premium value
With commodity sales, the pricing gets dictated on the lowest cost in the marketplace.
Middle-tier pricing is based on the cost of the goods.
The premium value is based on the result that you create.
You can break things down into three basic models:
- There is customer self-service, which is the lowest commodity form. Sales reps are not usually involved in that form at all. That is where content and websites walk users through and encourage them to sign up to own their product. You can also have multiple sales models operating along with that. It would be something of a very low price, like $10-$100 SAAS per month.
- Then there is the traditional sales model, which is more of the middle-market, middle-of-the-road SAAS product from $100 per month to around $2000 or $3000 per month. It is a combination of the marketing hybrid and sales, and it is more like the SDR or BDR model, where you are quickly churning people through. It applies to the kind of call where you book, do a demo, and then close with a very short sales cycle.
- The third model is the enterprise space. With this model, you are selling to whole companies. And at that level, you will have deals from $40,000 to tens of millions of dollars per year. As you start to scale, there will be more than one decision-maker involved. The enterprise space is more geared towards customization and specifics for an organization. A lot of persuasion needs to happen on multiple levels in the enterprise space because it is complex. And it touches many different people in different departments, with varying motives, goals, and objectives.
To recap: Self-serve is more about marketing content. The traditional sales model is about marketing content and sales with very short sales processes. With the enterprise model, marketing is super important, and brand is also super important. But a lot more work needs to happen on the sales side when you are talking about multi-million dollar deals.
