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SaaS (Software as a Service) has become the most popular and practical sales delivery model for various business applications. In turn, the increasingly crowded SaaS industry managed to cross $157 billion in 2020.
Despite the high demand for cloud applications, it is not easy for newcomers to differentiate between multiple software sales models. The three most popular options—Self-serve, Transactional, and Enterprise—each bring unique pros and cons. Which SaaS sales model you choose can dictate how you structure your team and marketing budget, as well as which KPIs will act as the greatest indicator of success.
Self-Serve Sales Model
As the name suggests, this SaaS model doesn’t require direct sales activity. Instead, marketing is responsible for generating revenue in the self-service SaaS sales model.
Example of a self-serve sales model: SEMRush is an SEO and PPC auditing tool that offers limited features for free and a tiered pricing plan. If they sound familiar, it’s perhaps because you’ve seen one of their YouTube ads, seen an advertising banner, or heard news of their 2021 IPO. Point being, they’re aggressively spreading the word about their product in order to generate authority and interest prior to you even checking out their tool. Yes, they do have customer service to support clients, but their sales team is minimal for an organization of their size.
Who does this SaaS sales model best suit: Typically, this sales model accommodates software companies that generate enough awareness to capture the attention of the right target market. Ideally, the product is straightforward so almost anyone could use it without tutorials (though it’s wise to have self-guided training materials). It should also be one of the more affordable options on the market, and make sure to give customers subscription models that require minimal commitment (like month-to-month). Above all else, a free trial should be made available so your product can sell itself.
Benefits: This particular software sales model supports fast growth without the need for internal staffing to match. You also present fewer barriers to entry by making it so anyone can enlist within mere minutes.
Downsides: Oh no! Your enrollment numbers are dropping! If you have a self-serve SaaS sales model, it may be hard to pinpoint why. Perhaps your product is too confusing or lacks a beneficial feature. Maybe it’s your pricing or a competitor is poaching customers. Without having an established human relationship with customers, it’s trickier for self-serve companies to nurture loyalty or open communication.
Generally, expect customers to come and go and spend less per engagement than if you utilized one of the other sales models. Not all of them will be a good fit for your services and, without a sales representative to teach or upsell, many users won’t utilize tools to their full potential.
Enterprise Model
If the Self-Serve sales model is Target, this is Tiffany’s. Customers heavily interact with brand representatives both during and after the long sales cycle. They’re treated to high-end service or technology, with a price tag to match.
Example of an enterprise sales model: On the surface, BrightEdge may not seem significantly different from its cheaper keyword-tracking counterparts. You need to dig deeper and spend heavily to see true differences.
This is why BrightEdge layers sales and account services so heavily into their customer engagement strategy. You want to learn about pricing? First, you have to request a live demo. You want to peek behind the curtain and perhaps give BrightEdge a test run? First, you have to request a live demo.
However, the hands-on customer interactions don’t stop with the initial sales. Larger customers will receive regular facetime with customer success managers who help troubleshoot, demonstrate new product features, and brainstorm solutions.
Who does this SaaS sales model best suit: If you’d use the word premium to describe your products, this may be the ideal software sales strategy. You can focus on expert-level representatives that forge relationships with the right audiences who are uniquely positioned to afford and utilize your services as intended.
Benefits: The enterprise software sales model lends itself to higher customer satisfaction, retention, and upselling. High-touch customer reps can anticipate customer desires and pain points and react accordingly, as well as pass information to your product development team. You aren’t wasting your time marketing to faceless minnows since you’d rather spend resources on capturing (and keeping) the business world’s whales.
Downsides: Very little about the sales process is automated, meaning that you’ll need a well-trained internal team to drive growth. This requires a greater upfront investment in personnel, and there’s little opportunity to scale. What’s more, for better or for worse, the lack of upfront information or independent sign-up could scare off less committed prospects. If they conduct a price comparison between you and five other competitors, not publishing your pricing could exclude you from their research.
Transactional Sales Model
Self-serve and Enterprise SaaS sales models fall on opposite ends of a spectrum, leaving Transactional in the middle. There often remains an automated sign-up process supplemented by internal sales teams that may service upper-tiered customers. However, these brand representatives will generally be less involved with individual users, enabling them to handle more accounts.
Example of a transactional sales model: Optinmonster publishes its various plans online and lets users proceed down the funnel without human involvement. However, they also offer higher-paying customers enterprise-level support and the option to have a live demo.
Who does this SaaS sales model best suit: You want the best of both worlds, and you have the technology to accomplish this! It’s intuitive to use but sophisticated enough to upsell. Chances are, you’ve found some success with the Self-Serve model, and you’re ready to service some of your industry’s bigger players.
Benefits: By having a solution in place for diverse price points, you’re able to capture both the minnows and the whales. You’re able to balance efficiency with quality to enable growth while nurturing a loyal core of customers.
Downsides: As the midway solution between enterprise and self-serve, you also inherit some of their required costs. You need to invest in marketing to attract self-serve customers, as well as internal teams to support higher-paying customers. Balancing both entry-level and premium product plans can divide your attention so neither funnel is optimized.
Final Tips for Choosing the Right Software Sales Model
Essentially, your product should drive your strategy. Is your product easy to use or intricate? Affordable or expensive? Applicable to a broad audience or only select individuals.
Many emerging software companies start with the self-serve SaaS model and, as their product features grow, they shift into a transactional sales approach. However, if you have a sophisticated platform, starting with the enterprise model can let you build a small but consistent customer base.
For additional readings about B2B sales, we recommend The 4 Stages of B2B Buying Behavior and The Top B2B Brand Awareness Secrets.
partner management. She has been actively involved in the industry since 2018.
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Ali Spiric
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A Boost to Channel Programs: Allbound’s $43 Million Growth Equity Investment from Invictus Growth Partners
When building technology stacks, Sales and Marketing actively avoid tools with capabilities that heavily overlap in order to limit spending. This leads to a very common question: can I use my existing CRM platform to manage channel partners?
The short answer? It’s not recommended to rely upon your CRM for partner relationship management (PRM). This is because it’s not equipped with specialized features that speak directly to channel partners’ needs, such as content co-branding, onboarding, and automated content curation based on group types. The lack of comprehensive yet targeted PRM functionality will force you to rely upon multiple tools in addition to your CRM, complicating processes and erecting barriers to scalable operations.
Contrastingly, a PRM is a centralized hub intended solely to help companies enable partners through a variety of features and automations triggered by user actions and customizable settings. What’s more, PRMs are increasingly essential to staying ahead of the curve, as Forrester predicts the PRM market will grow to $679M by 2023 across all industries.
Still on the fence? Consider that PRM technology is relatively new and specifically designed to address CRMs’ insufficient abilities to service partners.
In this article, we’ll help you understand key differences between CRMs vs. PRMs and how to best integrate the two platforms.
What is PRM?
Partner relationship management software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal to communicate with your business. The power of PRM comes from a personalized portal for partners where they can access documents, marketing content, market development funds (MDF), opportunities, and track deals.
PRM is considered the 3rd evolution of SaaS tools, the first being CRM and then marketing automation. When the market started changing, PRM stepped up to fill in the gaps.
What do PRMs offer in comparison to CRMs?
PRM software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal in which to communicate with your business. When comparing it against CRM, PRM technology’s power can best be summarized by three points:
- It centralizes most functions and content within a partner-friendly interface - Content is housed in a library with a search bar. Features like market development funds (MDF) requests, deal registration, and prospect pages are all within a single platform. This allows both partners and your management team to be more organized, as well as to identify relationships between different portal activities and subsequent conversions.
- It grants partners controlled freedom - Partners can engage with training and quizzes when most convenient, co-brand select materials as needed, and find quick solutions using the portal’s search function. This results in partners having the autonomy necessary to be productive and achieve success on a mass scale.
- It utilizes automation to improve the partner experience - The portal micromanages partners on your behalf based on commands you set up prior to deployment. This means that you can gate some features and content from defined partner groups and map out content recommendations based on users’ past responses.
Another advantage of utilizing a specialized PRM is that it shows your partners that you invest in their success. You’re willing to spend to accommodate their needs rather than asking them to fit their square bodies into your CRM’s round hole.
Case in point, Serko, a technology solutions provider in the travel and expenses industry, uses Allbound to support their partners who manage over 6,000 customers globally. Channel sales managers at Serko were able to showcase a world-class partner program and portal in which each partner was provided with the right sales and marketing content for their needs. Serko now has 100% partner adoption, which you can read about here.
It’s not “PRM vs. CRM”, as you will need both
Your company’s CRM is not intended for managing your partner ecosystem. However, there are CRM capabilities that are indispensable to Sales and Customer Service that a PRM simply cannot provide.
The Value Your CRM Brings to Your Partner Program
Remember, CRM is an acronym for customer relationship management, meaning that it helps businesses track prospective and existing customers within a single system of record, regardless of whether they came from Direct or Indirect. Advantages of a CRM (in conjunction with a PRM) include:
- The ability for Customer Service to pull client information to better serve their needs
- Customer base data for easier analysis, enabling companies to create and test retention strategies
- The option to schedule emails to customers through the CRM and collect related open-rate data
- Comprehensive pipeline views and sales forecasting, achieved by pulling data from both your CRM and PRM into a single view
- Customer segmentation for intelligent automation and more in-depth analysis
In short, your CRM is essential to keeping all the won leads your PRM helped generate. Additionally, it grants long-term insights into the quality of partners’ leads. For example, if a particular partner group consistently generates customers with high abandonment rates, this could indicate that they’re pursuing the wrong audiences or are setting false expectations, both which modified training practices can fix.
How and Why to Integrate Your PRM and CRM
Your PRM and CRM should share real-time data with one another through integration. This will grant you:
- The ability to block duplicate deals across both platforms - when Direct Sales and a partner both lay claim to a lead, the results are messy. Avoid channel conflict by enlisting data-sharing between your PRM and CRM so both platforms will immediately notify users that the deal already exists within the sales ecosystem.
- A fuller understanding of your pipeline and sales forecasting - Your PRM and CRM should generate reports that give you an overview of today’s (and future) performance. However, why look at two separate reports when you can dive deeper into one?
- For data comparisons between direct and indirect sales performance - By enabling your CRM to pull data directly from your PRM, you can do side-by-side comparisons of how different audiences react to various strategies. This enables you to create better-informed hypotheses and have the sales channels learn from one another.
Allbound’s PRM technology has standard integrations with a number of CRM solutions, such as Salesforce, Pipedrive, SugarCRM, and Hubspot. We also can do custom integrations in order to accommodate new customers’ existing technology stacks. In order to have the process go as smoothly as possible, designated integration specialists will sync up our PRM with your choice of CRM (as well as with other technologies). The end result is seamless interactions between the two software with minimal maintenance required.
What About CRMs That Say They Offer PRM Capabilities?
Because of the rapidly accelerating interest in channel partners, the Sales world is abuzz about PRM technology. It’s only natural that some related software companies would want to capitalize on this interest by laying claim to the PRM title, even if their products don’t quite meet the definitions.
Remember, a true PRM acts as a centralized hub for partner management and sales prospect interactions. Read Automate, Scale, Integrate – PRM System Criteria for a fuller understanding of what features to expect, and remember that a tool that offers only a fraction cannot call itself a real PRM solution.
The Bottom Line About CRM vs. PRM
The market has already started moving to a comprehensive partner management approach. In fact, 65% of high-tech companies have already adopted PRM tools that deliver a significant amount of company revenue. Companies that continue to manage partners in traditional ways via CRM or spreadsheets are not only missing out on new end customer sales, but also valuable insight from the data provided by channel partners. Consider creating a great partner experience to see big returns on your bottom line.
To learn more about choosing a PRM that fulfills your program’s needs, we recommend reading Partner Portal Best Practices and Design Checklist.
How does PRM work within a complex partner ecosystem?
Channel partners are your company’s selling allies, an extension of your sales team. PRM tools give you the functionality to support a variety of partners and their end customers.
PRM tools automatically gather and analyze performance data and metrics, with a clear focus on revenue and activity metrics. Rewarding your most profitable partners with MDFs for hitting revenue targets, or training completions, ensures that you see ROI from your investment.
PRM and tracking revenue
The revenue metrics for partner programs are unique to the indirect sales model, which is why PRM tools have extensive features to track leads and revenue including:
• Partner portal software for easy communication and data exchange
• Access to relevant parts of the customer database
• Dashboards for tracking leads, deal progression, deal registration, and sales KPIs
• Data about which partners perform well and which individuals fail to generate or convert leads
• Integrations with contract, scheduling, expense, and content tools
What are the benefits of PRM?
Overseeing a partner program has traditionally involved complex spreadsheets and manual correspondence for every deal, which required switching between a CRM and other tools to fill in the gaps. This is a huge competitive disadvantage and makes it almost impossible to correlate partner activity and training to closed business. That’s why PRMs provide partner management specific features like:
• Business intelligence, automation, and template-based workflows
• Visibility on the impact of 3rd parties on reaching new buyers
• Partner segmentation for targeted experiences
• Partner channel avoidance through clear registration processes and pipeline integrations
• Planning, recruitment, onboarding, enablement, co-selling and co-marketing, and incentives
• Overview that channel managers can use to track how well training and content is performing in relation to deal registrations
Integrating your partner tool with your CRM
For a complete view of your entire revenue org, both indirect and direct, integrate your PRM with your CRM tool. Look for a PRM vendor that helps you get your integrations in order.
Allbound let’s users bring their existing sales tools with them into the partner management process. You can pass information between your PRM and CRM to create a consolidated pipeline that is your single source of truth and stays relevant with real time updates on deal registrations. Syncing your data also avoids duplicate deal registrations, making partner conflict resolution much simpler.