How to Generate More Revenue: High-Touch vs. Low-Touch Sales

David Skok, a serial entrepreneur turned VC, with Matrix Partners, coined the phrase, “touchless conversion sales model” around seven years ago, with an article that neatly summed up the low-touch sales model. Something software founders and entrepreneurs should aim towards, since the lower their customer acquisition costs, the more they will make over the lifetime of each customer.

High Touch Sales low touch business model customer acquisition cost

What Does a Low-Touch Model Need?

The perfect low touch model is when you walk into a shop, buy what you want, through an automated checkout and leave. Amazon is a prime example of the low-touch model. In comparison, making a higher-value purchase, such as a car, a house, or an expensive piece of software, involves multiple interactions between people. Consequently, these extra costs are factored into the price.

For Enterprise software companies, the high-touch model is factored into the cost of doing business. Field sales agents, account managers and post-sale engineers are often needed when selling into large corporate accounts. These deals take time and involve multiple stakeholders. On the other hand, when you are selling into small and medium companies, the sales cycle is shorter, and therefore, it’s easier to implement a low-touch model to acquire leads and convert customers.

Let’s take a look at the components of an effective low-touch model for SaaS and tech companies.

High Touch Sales vs low touch sales

1: A source of leads

Most startups, working with a combination of internal (founders, plus staff) and external resources (agencies and freelancers), invest in a mix of organic and paid campaigns across a range of channels and platforms, usually no more than ten.

As startups grow, the immediate hustle of the early days is replaced by a more structured, metric-driven approach. Buying or scraping data is dropped for more effective, opt-in permission marketing approaches, which means ramping up on content, email and social media marketing.

Every decision you make when designing a marketing campaign needs to centre around getting noticed by potential buyers. Know your decision makers, budget holders and end-users. Create content that appeals to them, educates them and makes them want to share with stakeholders in their organisation. This means placing the content carefully across the Internet: Focus on channels where these potential buyers and stakeholders spend time online, from forums to sector-specific media, blogs and social networks. Add value at every stage.

Software Sales Funnel Infographic

2: Sales Leads Pipeline

Now that you have a scalable source of leads you need to qualify them as a sales prospect. Do they fit your customer profile? Do they need your software, and if so, can they pay?

Qualifying a lead is one of the most challenging aspects of scaling a sales pipeline. Leads are more than names and contact details in CRMs and Excel documents. We should only classify leads as active when they are a decision maker, budget holder or end-user: therefore, they will either use or pay for the product you are selling. The sooner you can confirm this, the quicker you can input these prospects into your sales pipeline.

One of the most effective ways is to arrange an Instant Demo. Most potential prospects rarely respond after one email. Ideally, you should filter your prospects into an automated sales email campaign, while sending them content they will find useful. Keep on their radar, without annoying them. An entire inbound marketing industry, including companies like HubSpot, are built on this concept.

Time and persistence are key. Companies that respond quicker have a much higher chance of converting a potential customer. Keep in contact after a demo, and if you haven’t yet talked with a budget holder or decision maker, encourage your point of contact (normally an end-user) to share content with them, or arrange another instant demo.

3: Self-service for new users

We believe that every potential buyer should be able to implement software solutions before becoming contract-bound. The problem with this approach however is that it enforces fully-featured trial periods. While these are great for some types of products, they can drastically increase the cost per acquisition, in turn inflating final costs. This is especially true for software that needs to utilize 3rd party channels that have a significant cost, such as phone conferencing. Not to mention trial abandonment rates and the work salespeople need to do to maintain such a leaky funnel!

Locking away access to the bolts and joints of a particular product behind a paywall or even necessity to contact a sales rep for an Instant Demo can result in an empty pipeline. It’s not an ideal alternative to trials, still it allows you to focus on organizational leads who actually want to try your software.

Ourselves, we’re experimenting with a 30-day money back guarantee which allows thorough, unsupervised tests, however with a fallback mechanism. There’s also a limited Free plan for users who don’t quite fit our ideal customer profile but still declare they need our software.

Unfortunately figuring out what’s best for self-service, whether it’s a trial or freemium model depends very much on the specifics of your product or service and is therefore totally up to you. Experiment with pricing, make assumptions and implement models that work for your business.

See our Guide to telesales for the resources you need to drive even more revenue.