The Rally Ventures SaaS+ Playbook

Sales Structure and Compensation

About Order and Why They Chose to be a SaaS+ Company

Order was founded in 2016 with the mission to simplify buying for businesses, which is often unnecessarily complex and leads to wasted time, money and chaos for those doing the purchasing work. Order is a business purchasing marketplace where companies can source office products, software and services. The entire platform is powered by predictive applications and embedded fintech that delivers tailored experiences up and down the buying process. It currently has more than $500 million in annualized spend, with customers like WeWork and SoulCycle.

Marketing and Education

Because SaaS+ is still an emerging category, one of the biggest lessons we’ve learned over the years is the importance of educating all stakeholders on the business model. Incorporating a culture of learning in everything from employee training to marketing outreach to onboarding can make all the difference between success and failure.

Packaging and Pricing

One of the great debates since the invention of the SaaS+ business model is whether SaaS fees should be reduced or even eliminated in order to reduce friction during the sales process.

  • The psychology of pricing and consumption shows that people are more likely to value and use a product that costs money. Customers are more likely to show up for kick-off, advocate within their company and follow through on the implementation process.
  • Familiarity. There was a lot of confusion around why the Order platform was free when they tried going through the sales process with no SaaS fee. Customers are used to paying subscription fees for software, and not having that is unfamiliar and just seems too good to be true. This point also ties back to how important education around the SaaS+ structure is throughout the sales and onboarding process.

Top of Funnel

Order Chief Revenue Officer Corey Beale spent many years working at Hubspot under a traditional SaaS model, and he had to explore how an effective revenue and customer engagement strategy would be similar and dissimilar in a SaaS+ model.

Demo and Sale Stage

Once the sales conversation moves forward, an Account Executive (AE) takes over to demo the product and close the sale. We found two key places at this stage where things are different in a SaaS+ organization.

  • It is more important for the marketing channel to be diligent on qualification and discovery. Corey noted that he puts much more emphasis on qualification at Order, as opposed to previous traditional SaaS companies. This is because some customers have a higher volume of funds flowing through their platform and therefore place a higher emphasis on non SaaS features, such as embedded payments.
  • Resources that are traditionally put into pre-sale should be reallocated to post-sale. For example, we recommend involving a sales engineer post-sale as opposed to pre-sale because companies need more support post-sale in order to be successful. Failing to correctly implement the software results in reduced usage and reduced funds flow, which directly impacts customer value.

Post-Sale Stage

At both SportsEngine and Order, accounts got 5x bigger on average by year 3 — all through education, upsell and nurturing. Below is an illustration of an average SportsEngine customer.

Compensation

One of the most complicated aspects of the SaaS+ model is compensating the Account Executive (AE) who is responsible for getting customers through the door. In a traditional SaaS model, the bulk of revenue comes from the SaaS fee, so the AE’s quota is completely tied to the initial sale. AEs are less concerned about growth over time because the account is normally handed off to someone else at the point of purchase.

Sales and Rev Ops

Justin noted how the comp plan at SportsEngine put a huge burden on the sales operations team. They had to build tech on top of Salesforce, so reps knew what their book of business produced every 24 hours. It was a huge undertaking, but once the machinery was built it was powerful.

SaaS+ Careers

Being part of a sales team at a SaaS+ company gives you a wide view into the entire organization. If you’re just starting your career as a BDR, you’ll see the full lifecycle of a customer and get an education on onboarding, usage, activation, churn and more.

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Rally Ventures

Rally Ventures

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We unite a thriving ecosystem of emerging business technology. For more information visit www.rallyventures.com