Everything You Need To Know About The Revenue Organization Within SaaS Companies
SaaS platforms are the ubiquitous tech solution that powers almost every type of workforce and business across the world.
But how do these seemingly affordable, infinitely scalable and easy-to-use platforms make money, and who are the workers who drive revenue creation within SaaS models?
The scale of SaaS
SaaS companies are everywhere, and as a platform and concept, Software-as-a-Service is one of the most successful, consistent, and growth-minded of tech solutions that have proliferated in the digital boom of the last 20 years.
It’s worth iterating just how ingrained SaaS, or on-demand software, is in our day-to-day,
“The number of SaaS companies in the world in 2021 (was) about 25,000…there are nearly 7,000 SaaS companies in the marketing space alone”,
“The average employee now actively uses 36 cloud services at work, including nine collaboration, six file-sharing, and five content-sharing services”,
“31% of businesses run their operations entirely from the public cloud”.
Subscription-based software services are increasingly being relied on as digital transformation (DX) proliferates,
“65% of the world’s GDP is predicted to be digitized by the end of this year”,
“89% of enterprises are planning to adopt or have already adopted a digital business strategy”,
70% of organizations have a digital transformation strategy or are working on one”. (sources)
But there are two salient points that make all the difference when it comes to SaaS revenue creation and the talent that drive growth, which sits at the center of Saas Sales Methodology,
Executives say digital transformation’s top benefits include improvement of operational efficiency (40%), faster time to market (36%, and meeting customer expectations (35%),
Less than 30% of technology vendors are active partners in organizations’ digital transformation initiatives
Effective SaaS sales and marketing have to make sure they’re answering a customers' need in the moment, (in the case of DX that means improving efficiency and meeting expectations), and that they are physically, and literally, present in the transformation initiative, providing advice, training, consistent feedback, relevant scaleable products, and fair pricing to customers.
In essence, SaaS revenue creation is traditional sales, made digital. This meeting of traditional and digital is where SaaS guarantees revenue: by providing relevant DX tools, meeting expectations, and being present in the journey.
Who are the primary revenue creation roles within SaaS companies?
Who are the figures who make up revenue organizations within SaaS companies? Although not exhaustive, the main job roles of revenue creators in SaaS are:
SDR (Sales Development Representative) and BDR (Business Development Representative)
SDR/BDRs are Inside Sales professionals whose entire sales focus is new customer outreach, and prospecting for new business. They are sourcers and schedulers, who clarify and develop a new customer through analysis and relationship building. While different companies define the roles slightly differently, (for example, some companies SDRs as inbound sales follow-ups, and BDRs as outbound sales), the roles are parallel in their objectives.
Account Executives
AEs manage the business of existing customers, helping them achieve their goals using their product, and are part of the promotional team within SaaS companies who offer upgrades and new packages to existing customers, with the aim of improving their service.
Lead Development Executive
This role echoes that of a BDR or Business Development Manager and is a common term to describe the sales figure who massages warm leads and turns them into new customers. There are elements of customer service, marketing, sales and AE in this role.
Customer Success Managers
Customer Success Managers are your customer champions and are the primary drivers of company advocacy. Simultaneously, they hand-hold customers through the new customer pipeline and are responsible for making sure every account is handled with professionalism. In essence, they are responsible for creating a working environment that values and improves the customer relationship. They need to provide guidance, leadership and mentoring for customer teams across the sales matrix, consistency of sales and account handling, and uniformity of marketing sales across platforms.
Sales Executive
Sales Execs are the front line of your SaaS product, promoting and selling your product to new customers through a variety of mediums, such as direct sales, email sales, marketing, events, testers, trials, demos, referral networks and digital networks. Sales executives' responsibilities typically take elements of the job of an AE, sales representative and BDR, customizing each approach to each customer, region and sector.
Sales Manager
Sitting above the SE (and sometimes above BDRs and SDRs too) is the Sales Manager: the figure who sets sales standards, KPIs and reviews processes within the Sales Team. They are responsible for supervising sales teams.
Marketing
Marketing is a key part of revenue generation. The marketing team often consists of a demand generation specialist, product marketer, content strategist, and potentially other strategic roles.
Having marketing, sales, and customer success on the same team means that everyone is working toward a shared goal of increasing revenue through traffic, leads, sales, and expansion.
How do SaaS companies make money?
Typically, SaaS revenue is created via subscription models, where customers are charged monthly, or annually, for usage of the platform. This inherent flexibility is why SaaS is so successful. With the responsibility for building, hosting and maintaining the platform on the cloud, SaaS companies in essence become extensions of customers' data usage and storage and therefore have ample chance to scale their product to customer needs.
This model of revenue creation is lauded for its consistency and predictability - the recurrent value of customers is (to a degree) set, so scalability and consistency of service is easy to manage and maintain.
Most SaaS platforms have revenue models - different types of service, that have different cost points, to draw in the widest net of custom.
The most popular revenue models are,
The “Freemium” Model: customers can access limited features of the platform for free. Benefits are easy adoption and easy upselling ability
Flat Rate Pricing: a single price for one, or multiple, sets of features of a platform.
Usage-Based Model: however much you use the service, you pay a fee for it.
Per-User Pricing: customers are charged a flat rate per user, rather than for features or by usage.
Tiered Revenue Model: The more you pay, the more features you can use, on a flexible basis.
SaaS platforms are revenue monsters - with 85% of business apps predicted to be SaaS-based by 2025, the future is bright for this most flexible of digital tools. However, for all this revenue opportunity, a SaaS product is only as valuable as the teams who sell it, support customers with it, and promote the product within it. Focus on the team, and the revenue will come!
