Software is big business. Gartner estimates that IT spending will exceed $3.5 trillion in 2017, with $357 billion of that spent on software services, a 7.2% increase in 2016 global software revenues, which were around $333 billion.
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Around the world, a considerable amount of Venture Capital (VC) money was invested in software, with 22% of global VC deals (totalling $134 billion) going into software companies, worth around $29 billion. Those figures don’t include money startups raised from friends, family, angel investors and crowd-funding platforms.
Without salespeople, sales tools, sales training, and processes to manage the sales pipeline, this massive, multi-billion dollar market would collapse. Millions of people around the world are employed by software companies, with millions more directly or indirectly benefiting from the sector. In the UK alone, 1.64 million are employed in the digital tech sector, with a total Gross Value Added (GVA) of £97 billion, according to a recent Tech Nation report. None of that would exist without digital, technology and software companies.
Software is Everywhere
Sales are the bedrock of every business. Even when a company has investors, it is the customers who are paying everyone’s salary. The role of a salesperson, or team, is to ensure revenue keeps flowing in, at a reliable pace to grow and scale the business.
When we think about software, we rarely think about the technology as a standalone sector. Instead, we think about the role it plays in our economy and society. Developers and designers create the products, but it is the job of sales and marketing professionals to sell the benefits - and the services - into target sectors and markets. There are software products and solutions for nearly every sector. Software that improves HR and recruitment processes. Software as a Service (SaaS) - the most popular form of pricing and delivering technology services - products are playing key roles in the healthcare, health and safety, marketing, retail, travel, property, advertising sectors, and dozens of other markets.
Entrepreneurs and developers who create software products are attempting to solve problems, create more value and help others work more efficiently.
It is the role of sales teams to bring these products to market, win customers, and grow market share within the sector(s) the product is designed to serve. In this series of articles, and supporting eBook, we will walk you through how to sell software, how to increase sales and how to manage the sales pipeline and demo process to close deals faster.
Outline of the Software Sales Cycle
In every sector, sales involves a familiar, repetitive pattern. Generally speaking, sales is split between hunting and farming activities: Also known as prospecting (for new leads, business development) and account management (generating more revenue from existing customers).
Depending on priorities - fast growth (a common demand in the software sector) - or steadier growth, a sales executive will probably spend more time bringing in new business than working on increasing revenue from customers. It also depends on the size of the company and number of customers. Some need dedicated account managers, to ensure customers can be looked after and they can up-sell other products and services when the need arises.
For the sake of this article series and eBook, we will focus on the work that goes into generating revenue from entirely new prospects; therefore, we will apply everything from the perspective of business development teams and managers. Here is a traditional sales cycle that should be familiar to anyone who is experienced in selling software:
One way or another, you need cold or warm leads in the pipeline. Cold prospecting usually involves making your own database - scraping contact details from target prospect websites and social networks - or buying data. Sometimes prospecting involves both.
Software companies are also heavily invested in inbound marketing. Money is poured into marketing efforts and leads come out the other end. A combination of efforts - usually content, social media, advertising - can result in potential prospects voluntarily handing over email addresses and phone numbers. At least this way, a prospect is warmer and more receptive to a call: Your company has already given them something of value - an insightful article, or eBook, for example - which makes the job of selling the value the software creates somewhat easier.
2: Qualify the Prospect
Before you pick up the phone, send a LinkedIn message or an email, you need to know that this prospect won’t waste your time. You only have so many hours in the day to make sales call, meetings and book demos.
Check that they are likely to have the problem(s) that the software solves. Does it look like they have the budget? Who do you need to speak to? Who are the decision makers or other staff that might play a role in making the decision?
Find out everything you can, and then make contact.
Don’t give up after one attempt. An effective sales process should involve multiple attempts since research shows that 80% of sales require five emails and calls to close the deal. Getting someone’s attention could also involve multiple calls and emails.
Once you’ve spoken to the prospect - or they have confirmed interest via email - you need to book the sales demo, call or face-to-face meeting. Many software companies are already selling globally, or the sales process requires potential clients see the software.
What we’re describing here is the standard process, but note that with CrankWheel’s Instant Demos you can skip ahead several steps and go straight to the demo within seconds, when a prospect requests a demo on your website.
Demos involving screen sharing are the most cost effective way to sell the value of software and increase the chances of closing the sale. Either go live instantly or set up a meeting in the near future.
4: Demo or Sales Meeting
Some sales meetings involve a face-to-face demo if you are working with prospects in your surrounding area. However, most involve a headset and the ability to share a screen with a potential client.
Now is your time to impress them. Show you understand their pain points. Listen. Demonstrate what the software can do for them. Answer their questions. Build rapport. Overcome objections. Make sure you finish the call on a positive note so that you know if you can offer the right price, or they are happy with the results of a free trial that they will convert into a paying customer.
Prospects rarely start free trials straight away. It takes more work to move them through the pipeline. There are often other stakeholders who need to be consulted, questions and concerns that need to be overcome. Be persistent. It can take up to five follow-up calls and emails to get a prospect to sign-up to a free trial.
6: Free Trial
One of the most common sales techniques in software is to provide a free trial, usually 14 or 30 days in duration. Once signed-up, make sure they are actually using the software during this period.
Work with other team members to assist in this, with technical help, content - such as FAQs and Onboarding articles - and customer support, to ensure they have a successful trial experience.
7: Convert and Close
Once the trial is about to expire, you need to know if they are going to start paying. It all comes down to one question, one answer: Yes or No.
Make sure you either convert and close the deal, or get feedback as to why the product isn’t suitable for them at this point. Either way, you’ve learned something valuable, or have a new customer and the commission earnings to show for it.