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Is There (Sales) Life Outside SaaS?

by David Brock on October 21st, 2022

It seems everything in my feed is dominated by “SaaS Selling.” It may be the algorithm–we do have a heavy technology and software client base. But 50% of our clients are in other sectors.

It seems everything I read is about “SaaS selling.” We’ve developed wholly new language, acronyms, and so forth. We’ve created “new” metrics, KPIs that actually aren’t so new. We’ve created formulas for sales success in SaaS.

It seems that everything new about selling, everything about sales performance really focuses on SaaS selling. One wonders, “Is that all there is?” Is there selling life outside SaaS.

In 2021, there were about 25,000 SaaS companies in the world, collectively generating about $272 B in revenues. the industry growth rate has been over 20% in the past, but is projected to be about 11.7% CAGR over the next 5 years. SaaS companies have generated a lot of interest in the investor community, with over $48.5 B in the past 10 years. And that excitement has created roughly 337 “unicorns.”

With those numbers, it’s easy to see why SaaS companies are so interesting.

But when one takes a wider view, SaaS revenues represent are projected to be roughly 0.5% of the global economy over roughly the next 5 years. So there’s a lot of selling happening outside SaaS!

Why is this important? Why should SaaS sellers care about what’s happening outside of SaaS, why should the rest of us care?

I think the primary reason is “innovation.” If we are to maximize our ability to grow, if we want to lead in our markets, we need to innovate. We need to think differently, we need to do different things.

But we tend to become prisoners of our own experience. When we look to change and improve, we tend to look at other businesses and organizations just like us. As a result, we end up copying each other, perhaps getting some incremental improvement. Somehow, every SaaS organization looks just like the other–at least in their selling approaches.

As I talk to these organizations, often, I ask, “Have you looked at what the sellers of basic materials are doing?” Or, “There are some new things happening in CPG that are interesting, have you looked at them?” Or, “Many industrial products/services companies faced these issues a number of years ago, have you looked at them?”

Sometimes, it’s useful to look back on things, across industries, but to get a historical views. Often, SaaS sellers are amazed when I say, “My first sales job, everything we sold was ‘as a service.'” We had concepts like ARR (my first quota was $27M net ARR increase…but we didn’t call it ARR.) A key part of our strategies for achieving those goals was retention, growth, expansion, and cross sell. If a customer cancelled a computer “subscription,” that cancellation was debited against my quota. I had to recover that and still achieve my quota. And there are a lot of lessons that can be learned from that, applying them today. But when I talk to SaaS clients about that, they are amazed, they thought all of this was an invention of SaaS companies.

But I’m being a little tough on SaaS companies. I suspect virtually every industry is like this. When we look to grow, improve, and change; we tend to look at other organizations like us. Sometimes we look at organizations in adjacent markets.

This stifles our ability to think differently and to do things that may be new to us and new to our markets–but adapted from very different spaces.

Across all industries/markets, I see sellers struggling. Their worlds are changing, how their customers buy is changing, things are getting more complicated. Overlay that with the current economic conditions, organizations are challenged in ways they haven’t seen in years–or perhaps ever.

Innovation, thinking differently, doing new things become critical. But as we look across diverse markets and industries, we see different approaches, different idea, things that work for them, that might be adapted or tweaked, becoming game changers for us.

The biggest thing that holds us back from innovating is our parochialism, our inability to look for ideas in very different spaces.

I started this post asking, “Is there selling life outside SaaS?” SaaS sellers need to start looking in other places for ideas. Likewise we each need to look outside our traditional markets, competitors, and ecosystems to get new ideas and approaches.

From → Innovation

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