SaaS Applications Sales Model Starts to Mature

By Michael Vizard

When the shift to software-as-a-service (SaaS) applications delivered via the cloud began, most of the focus was on selling these offerings directly, but as providers began to fully appreciate the challenges of activating a license along with getting customers to renew those subscriptions, many began proactively recruiting channel partners to help achieve that goal more economically. A new survey of more than 300 SaaS app providers by Totango, a customer management software vendor, drives this point home. While 89 percent cited new customer acquisition as their highest priority, 59 percent pointed to customer renewals. Nearly half cited up-selling and add-on sales to existing customers. To achieve those goals, 69 percent reported they have increased headcount, while 58 percent have invested in new systems and technology. Additionally, 52 percent said they have invested in retention programs. In essence, many SaaS app providers are starting to mature as a business. Most of them overestimated how fast they could grow using a direct sales model. The challenge many now face is trying to figure out the right balance between direct and indirect sales via the channel. Here's a look at key findings from the study.

This article was originally published on 2016-04-15