I just listened to an outstanding webcast on the future of selling, conducted by four close friends. I am a student of their work, they are among the smartest thinkers about selling I’ve ever met.
But as I sat through the conversation, I found myself growing increasingly frustrated. It seemed, unconsciously, the conversation around selling gravitates to SaaS selling. It’s not just them, many of the webcasts I participate in, 99.9% of the conversations I see in social media focus on SaaS selling.
It seems that SaaS selling has become the center of the universe in virtually all sales conversations. Everything about selling seems to revolve around SaaS selling. All our conversations, all our thinking about what’s good and what’s bad about selling revolves around SaaS. And now, PLG is creeping into the sales discussion.
Why are we so influenced by SaaS selling? I think there are a few fundamental reasons we get distracted by this:
First, SaaS companies are (or perhaps were) hot and sexy. VC’s invested billions in SaaS technologies, there has been huge publicity around them—mainly around valuations, numbers of unicorns, the wealth creation (primarily for initial investors and founders), and technology (technology is always a hot and sexy conversation). It’s fun to look at the stories of these founders, the explosive growth, the cult of thinking/lifestyles around SaaS. I’ve lost count of the number of movies created around SaaS founders–most not ending in triumph. There’s a certain amount of glamor in looking at the cool campuses, the great perks, the cool culture, the hot jobs, and the ability to hang out with the cool kids.
Second, much of SaaS technology seems to be in sales and marketing. Many of the automation technologies we leverage are and should be SaaS technologies. So we get exposed to SaaS sellers in every channel. Our inboxes, voicemails, texts are dominated by these sellers talking to us about cool products, their cool companies and what they do. The social tools optimize our feeds–because we are sellers–around discussions about selling, and they all see, to be SaaS selling approaches. For example, how many articles do you see in your feeds about sales excellence with basic materials, embedded products (say semiconductors, electronic components, motors, transmissions, etc), or capital equipment, or complex professional services, or financial services, or healthcare, or small business selling? I’ve actually never seen one in my feed. Perhaps it’s the algorithm, perhaps it’s something else. I do know there are articles about this, but they don’t seem to show up in our feeds.
One wonders about the dominance of SaaS selling in our conversations about selling.
When you look at the data, it’s actually a pretty small sector. The total global revenues for SaaS companies look to be in the $250-400 billion range. That represents about 0.5% of the global economy. Forecasts don’t show it exceeding 1% by the end of the decade. Clearly, there is a lot of buying and selling going on that’s non SaaS related. Why aren’t we hearing about sales excellence in those domains, why aren’t we learning from what happening outside of SaaS selling.
When you look at the number of companies that are “SaaS based companies,” the estimates mostly hover around 25-30 thousand. I did see one estimate at 175K. So if I assumed global revenues for SaaS companies, is $500 Billion (far above what most estimates show), at 25K SaaS companies, the average revenue/ARR is $20M. At 175K, the average revenue is $2.9 M. In either case, the majority of SaaS companies would be defined as small businesses—but these small businesses dominate our thinking around selling.
When one looks at the sales strategies for the giant SaaS companies, while some are still leveraging “SaaS selling” in parts of their businesses, most have migrated to different sales models, that are more similar to what we see in other businesses.
The selling innovation we see in these SaaS companies, are mostly adapted from retail and CPG types of selling–and we can learn a lot from them and the SaaS selling approaches. But the SaaS selling model seems to be based, also, on a flawed adaptation of lean manufacturing techniques and the Toyota production system. And while lean manufacturing does not promote this, the emphasis is on volume, velocity, and efficiency.
As a result, we see selling “innovation” around increasing volumes, around mechanizing (figuratively and literally) the selling assembly line, treating customers as undifferentiated widgets handled by robotic sellers. While it would be unthinkable in lean manufacturing, in SaaS selling, we’ve become accustomed to very high failure rates–win rates tend to be 15-20%. The orientation of SaaS selling is highly transactional, and we optimize everything around those transactions.
And we see this selling approach driving customers away, with more and more choosing rep-free buying engagements. But, increasingly the buyers are failing, as well. The majority of buying decisions end in no decision made, and for those that do, there is high remorse.
And even the SaaS companies are recognizing their approaches are breaking down. They are struggling to re-invent themselves and their selling approaches.
Yet, the “sun” in our selling universe seems to be the “SaaS selling” approach.
We are having the wrong conversations about selling, selling excellence and supporting our buyers. We are developing the wrong practices to attract, develop, retain, and grow professional sellers. We are focusing on the wrong things in developing, creating value and growing our customers.
We need to shift our conversations from “SaaS selling” as the center of the selling universe, to looking at how others sell, the sellers that drive 99.5% of the global economy.
I spend a lot of time with organizations in these spaces. Basic materials companies, “dirty” companies that build physical products or companies that sell products to those companies, medical equipment/device, healthcare. Not for profit, financial services, complex professional services. Telecom, electronic components, semiconductor and other technologies. And with a lot of software companies.
There are hugely exciting things in selling and customer engagement that is happening in each of those sectors. The best value creation strategies I see come from basic materials and commoditized products. It’s easy to sell a hot product–you accept orders. But when your product is commoditized or a basic material, you have to have a different approach to selling and creating value. Some of the most powerful Account Growth/Retention strategies I see come from those “dirty” manufacturing companies and complex professional services.
There are hugely exciting things happening in selling–and the majority of them aren’t in SaaS selling. If we want to learn and innovate, we have to learn from everyone. We have to start talking about great selling in each of these sectors and how other sectors might adapt those practices to their own selling approaches. We have to look in different places–not the same old tired places that have dominated our thinking about selling for the past decade.
And the SaaS sellers, that are struggling with reinventing themselves, won’t learn from each other, but will learn by looking outside of SaaS to many of these other sectors–adapting some of what they do into a new way of selling SaaS offerings.
To be honest, I’m tired of hearing about the same old approaches, perhaps with a veneer of technology or ChatGPT. I’m tired of the question that keeps arising–often driven by SaaS sellers, “Is there a future for selling?” I’m tired of the increasing “doom and gloom” that underlies too many conversations about selling.
There is too much exciting going on in selling! There are things that people in every sector are doing that are very powerful and innovative. Things that we can learn and adapt to our own sectors. Things that change how we sell, how we create value, how we show up in more meaningful ways to customers.
I’m tired of sales professionals being the instigators of the conversations about, “Is there a future in selling?” Our customers believe there is a future in buying! Yet they struggle with that, they need help, their futures depend on it. As long a there is a future in buying there will always be a future in selling–but only if we start focusing on how we help our customers learn, grow, develop confidence and succeed.
I’m not down on “SaaS selling,” we have and can learn a lot from it. But we have to have a much broader conversation on the future of selling–it enables all of us to grow and improve.
Preach, David!
Thanks Charlie!