7 Critical Sale Process Stages in SaaS
The sales process stages look different in every company. And it’s no secret that defining them can help your sales team manage and optimize each interaction with potential customers.
In SaaS and product management, the sales process is a structured journey that can be broken down into seven stages that most companies can adopt. These include:
- Identifying your customer.
- Generating leads.
- Qualifying leads.
- Presenting the product.
- Handling objections.
- Closing the deal.
- Nurturing the customers.
Why having a standardized sales process matters
The main reason you want a standardized sales process is consistency.
A clear, repeatable process allows sales professionals to take control over each stage. It ensures no step is missed and makes it possible to improve efficiency, decision-making, and sales.
Moreover, it also:
- Improves sales team efficiency by providing a clear roadmap for each deal.
- Ensures scalability as the business grows.
- Allows you to forecast sales by tracking the performance of each sales stage.
- Helps identify bottlenecks and areas for improvement in the sales journey.
- Systematically addresses objections and challenges before they become deal-breakers.
7 stages of the SaaS sales cycle
Now, let’s explore the seven-step sales process, including some tips and examples from other brands:
Identifying your potential customers
Prospecting is the first step in the sales process since you can’t start generating leads if you don’t know your target market. You can also use our buyer persona template if you’re unsure where to start.
A few user persona examples in the SaaS space include product managers, product marketers, customer success managers, UX designers, and independent contractors who help companies with any of the areas above.
Identifying which persona you’re trying to target will help you create a lead generation funnel that brings in traffic consistent with your ICP (ideal customer profile). You can also use this data later on to start user segmentation early with a welcome screen — improving your contextual onboarding flow.
Canva is a great example of how to use a welcome screen effectively.
Generating leads
Once you have your buyer persona down, you can explore various lead generation channels like:
- Social media platforms.
- Blogs.
- Newsletters.
- Case studies.
- Paid search.
- Link building.
- Thought leadership guest posting.
- eBooks.
- Webinars.
- Video marketing (YouTube and TikTok).
HubSpot found that most leads come from the company website and referral traffic — both heavily dependent on content marketing. Using high-quality articles to build your brand, increase exposure, and get people talking about your product is a prime path toward increasing SaaS sales.
Qualifying leads
Qualifying leads is a crucial step in SaaS sales since it helps you determine whether or not a lead meets the requirements to purchase your product. This will save you from wasting time and money on a lead that won’t be able to purchase at the end of the day.
There are three main classifications for this stage of SaaS sales:
- MQL. Marketing-qualified leads are prospects who have interacted with your marketing content and displayed purchase intent. Signs could include opening emails, visiting your website, and sharing their email in exchange for an eBook or newsletter.
- PQL. Product-qualified leads are prospects who have experienced the product either through a free trial or freemium model. In addition to signing up, completing various onboarding tasks is necessary to qualify for the PQL definition.
- SQL. Sales-qualified leads are users who are ready for a sales pitch after showing sufficient interest in the product and experiencing multiple marketing messages.
Once leads get a lead score and qualification, they’ll be marked as sales-ready so a SaaS salesperson from your team can reach out to them. This reduces the workload of your reps to ensure they only spend time on qualified prospects and puts the SaaS sales salary you pay them to good use.
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Presenting the product
Once you’ve got the qualified leads flowing in, the next step in the SaaS sales process is to present your product as the solution to the main pain points of your prospect.
This stage looks different for every company since SaaS sales cycles can vary wildly depending on the type of product on offer.
Free trials are the most common approach. Yet, you could also have your sales manager run product demos (especially for enterprise customers who might need a guided introduction). Demo content is particularly important for complex and/or expensive products.
However, if your product is affordable and easy to use, then you might want to use a free trial instead of a demo. In addition to free trials and product demos, you could also use case studies, presentations, or even paid trials (more on that last one, later).
Handling objections
Overcoming objections is a core trait of any good SaaS salesperson.
You don’t need to be talking non-stop to handle the objections of your prospects. On the contrary, being an active listener can be far more effective.
Instead of interjecting the moment you hear an objection, listen to all their goals, motivations, and concerns. By taking the time to understand where their objections might be coming from, you’ll be better equipped to respond.
Repeating what they’ve said, asking follow-up questions, and using social proof to put apprehension to rest are all effective tactics that you can use to seal the deal.
In fact, #1 New York Times best-selling author Daniel Pink found that waiters/waitresses who repeat the order earn 70% more in tips.
Here are a few common objections and how to respond to them:
- “It’s too expensive” — instead of debating the price with a prospect, move the conversation back to the value the product provides and how each feature can solve one of their problems.
- “We need to use the money for other areas” — the best way to get around this objection is by sharing the ROI some of your customers have had and reminding them that they can divert the extra revenue towards other departments.
- “I’m not ready to commit to a contract” — to get past this fear, you could offer a free trial, a 30-day money-back guarantee, or suggest a monthly billing schedule instead of annual payments.
- “I already have a subscription with one of your competitors” — ask them why they chose that vendor and what is or isn’t working, then explain how your product is different/better.
- “I’m already locked into a contract” — depending on your profit margins, you could offer a discount to cover their switching costs.
- “I’m happy with my current provider” — this is always a tough pill to swallow, but you should still ask them for the main things they like about your competitor so you have a roadmap for which areas you need to improve.
- “I heard X about your product” — if the statement isn’t true, then just say, “That’s not true,” and pause. This will satisfy the majority of buyers, and they’ll move on to other questions. If the negative statement is true, make a brief clarification and promptly redirect the conversation elsewhere.
- “I’m not authorized to approve this purchase” — politely ask them who the right person to talk to is and if they’d be willing to redirect you to them.
Closing the deal
Getting prospects to sign up is not the final step in the SaaS sales journey. You still need to ensure they are onboarded, retained, and prepared for future upsell opportunities.
If your prospects remain undecided after a free trial or product demo, you can offer incentives like a 10-20% discount for a yearly plan, which taps into their FOMO. Alternatively, offering one or two free months for annual billing creates longer customer retention, reducing the risk of premature churn.
It’s also crucial to slow down when facing a “yellow light”—if something feels off, don’t rush to close. Instead, ask thoughtful questions like, “What’s holding you back from continuing today?”, “Did the product solve your problem?” or “Is there any reason why you wouldn’t continue with the purchase today?” can give on-the-fence prospects that last nudge into certainty.
Lastly, avoid hard closes for some prospects. Instead, offer to extend their trial period or share upcoming features relevant to their business. This reduces pressure and may make the prospect more comfortable committing.
Nurturing the customers
Whether you used a hard or soft close to reel the customer in, that’s not the end of your interaction with them. You’ll need to get the user through onboarding and help them optimize their user journey for customer success.
A 2021 study from Bloomreach reported that 56% of customers are willing to pay more if they get a better customer experience. As such, investing in a self-service support system could bring a good ROI in the form of SaaS sales compensation since it will help them solve problems on their own.
This shorter resolution time may not seem like a big deal. But, it could actually make the difference between a user with a stagnating LTV versus one who generates expansion revenue for the company.
In the same vein, you should ensure that your onboarding flows have enough in-app guidance to ensure that fresh signups don’t hit too many obstacles before reaching user activation. There’ll always be late-game objectives to pursue, like customer expansion and improving the sales process.
How to improve the SaaS sales cycle?
Now it’s time to start optimizing your sales process for success. We’re going to go over four strategies that can help your sales rep get the results you’re looking for:
- Continuous engagement during free trials.
- Upselling customers to drive account expansion.
- Satisfaction surveys.
- Paid trials.
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Keep in touch with customers during the trial period
No matter how long your free trial length is, your sales reps should stay in contact with prospects regularly as they try the product out. Checking in with them throughout the trial could also help the prospect overcome early obstacles or discover new features that they haven’t tested yet.
Having customer self-service resources like a knowledge base or in-app guidance can also increase free trial conversion rates since prospects will be able to find the help they need without waiting in line for a live agent.
Upsell to existing customers to drive account expansion
Upselling and cross-selling to existing users is one of the best ways to increase your annual recurring revenue ARR without increasing your customer acquisition cost CAC. Expansion MRR comes from three main sources:
- Upselling. Getting people to upgrade to a more expensive plan or version of your product.
- Cross-selling. Promoting other standalone products that could complement their tool stack.
- Add-ons. Selling additional features that will improve their user experience when using your core SaaS product.
If you have a freemium plan but want to upsell users to a paid plan, you could incentivize upgrading by offering additional features or imposing limitations. Figjam, for better or worse, takes the latter approach by capping the number of files you can create.
Upselling is a great way to generate expansion revenue (and can even help you achieve negative churn). But you must capitalize on the other two approaches as well.
If you’ve ever wondered how Zoom could make a $1.8 billion gross profit in 2021 despite having a freemium plan, its wide array of add-ons surely had something to do with that. The Large Meetings add-on alone costs $600/year, which is equivalent to three Business-tier licenses.
Atlassian, with over $1.7 billion gross profit in 2021, has spent years on development and acquisitions to build out a product family that truly has something for everyone. This makes cross-selling a lot easier for the company, bringing in fresh revenue while reducing its customer acquisition cost (CAC).
Regardless of which method you use, you must factor in where the customer is in their user journey. The best time to prompt account expansion is when it helps the user get their desired outcome and accomplish their JTBD (job-t0-be-done).
You can even use product usage and customer data to identify the ideal moments for upsell prompts, as this will make your users feel like you’re actively trying to help them rather than just trying to improve your SaaS sales metrics.
Use satisfaction surveys to collect feedback
One of the biggest blind spots in SaaS sales is failing to gather feedback at critical stages, leaving sales teams unaware of customer frustrations or unmet needs.
Satisfaction surveys—when triggered at specific stages of the sales process—allow you to get inside your customer’s head, spot potential issues early, and improve your process.
Here are some types of satisfaction surveys you can use and the best stages to deploy them:
- Post-demo feedback survey: After product presentations, collect feedback on the demo to understand if it addressed the prospect’s pain points.
- Trial experience survey: Towards the end of a free or paid trial, ask how easy the product was to use and if it met their expectations.
- Objection handling feedback: After addressing objections, gather input on how well the sales team handled concerns and if any issues remain unresolved.
- Post-purchase satisfaction survey: Right after closing the deal, ask new customers if the buying experience was smooth.
- Customer retention survey: For long-term customers, use periodic surveys to evaluate satisfaction and identify product improvements.
Try paid trials
If your sales teams are getting bogged down with free trial users that slow down SaaS sales processes without converting, then you may want to consider switching to paid trials. Paid trials, on average, have higher conversion rates than free trials because only a qualified lead would be willing to pay for them.
Of course, the main drawback of forcing prospects to commit a monetary amount to your product from the get-go is that you’ll get fewer signups in total — making paid trials a delicate balance between the quality and quantity of your leads.
The good news is that the trial revenue and higher conversion rate can offset some of the acquisition costs as well as make for a more predictable sales cycle. Surfer is a great example of this, as they charge $1 for a 7-day trial.
The amount is small enough that it won’t cost sales-qualified leads but still enough of a commitment to ensure that your SaaS sales specialist isn’t exhausted by users just looking for a freebie.
Best practices for creating your sales process
Here are some best practices that will help you design a robust, effective sales process tailored to your product and audience.
Build your qualifying criteria for each stage
A well-defined sales process starts with qualification criteria for every stage.
This helps you focus your time and resources on leads that are most likely to convert, saving your team from chasing prospects who aren’t a good fit.
For instance, during the lead qualification stage, ask questions like:
- Does the prospect have the budget for your product?
- Do they have a pressing need for your solution?
- Can they make purchasing decisions quickly?
As you progress through the sales stages, your criteria should become more specific. For example, you can ask targeted questions to assess readiness, like determining whether prospects have the right size team to benefit from your product—resulting in higher close rates.
Leverage proven sales process frameworks
Formal sales process frameworks are structured approaches to selling designed to guide your team through every interaction with potential customers.
For this, choose a framework that aligns with your sales goals or combine elements from different ones to suit your team’s needs. Here are a few well-known frameworks:
- Sandler Selling: Focuses on building rapport and uncovering pain points before presenting a solution.
- SPIN Selling: Uses Situation, Problem, Implication, and Need-Payoff questions to dig deeper into the buyer’s pain points.
- Fanatical Prospecting: Prioritizes consistent, high-level prospecting to ensure a steady flow of qualified leads.
For instance, you can blend the Sandler and SPIN Selling frameworks to engage in consultative selling by identifying customers’ challenges before recommending a solution.
Slow down at any stage when you detect issues
Pushing leads through the sales pipeline too quickly can lead to sloppy deals, higher churn rates, and a lot of backtracking.
If you notice hesitation, confusion, or objections from a prospect, it’s a sign you need to slow down and dig into the underlying issues.
To address this issue, train your sales team to be hyper-aware of red flags at each stage, such as unanswered questions or unclear objections. So when these issues arise, your team can pause, revisit the prospect’s concerns, and make sure they are completely resolved before moving forward.
Rushing to close a deal can hurt customer satisfaction and lead to higher churn rates down the line.
Use sales management software for better sales cycle management
Sales management software can streamline the entire sales cycle process, from lead generation to deal closing.
That said, invest in a CRM system or sales management platform that integrates with your existing tools and allows for automated workflows.
Many CRMs, like HubSpot or Salesforce, offer features for lead tracking, nurturing, and follow-ups, which ensure that no lead falls through the cracks. These tools also help track performance metrics and customer interactions, which can be used to optimize your sales process over time.
For example, you can perform an Account-Based Management (ABM) strategy using CRM data to tailor communications to specific customer segments, leading to a higher rate of upsells and renewals.
Sale process stages FAQs
What are the 7 steps in the sales process?
In short, these are 7 steps in a typical sales process:
- Identifying your customer: Research and define your ideal customer profile.
- Generating leads: Attract potential customers through marketing and outreach efforts.
- Qualifying leads: Determine if the lead is a good fit for your product or service.
- Presenting the product: Showcase how your product solves the customer’s pain points.
- Handling objections: Address concerns or questions raised by the prospect.
- Closing the deal: Finalize the sale by getting the prospect to commit.
- Nurturing the customers: Continue building the relationship to drive long-term retention.
What are the 5 steps of the sales process?
The 5 main steps of the sales process are:
- Prospecting: Identify potential leads to pursue.
- Qualifying leads: Ensure leads are ready to buy and have the budget for your solution.
- Presenting the product: Demonstrate your product’s value to the lead.
- Handling objections: Resolve any concerns that could prevent the sale.
- Closing the deal: Finalize the purchase agreement and secure the sale.
What are the 4 key sales steps?
In simpler steps, these are the 4 key sales steps:
- Search for potential customers who match your target profile.
- Offer a tailored presentation to meet the customer’s needs.
- Respond to any doubts or questions from the prospect.
- Convince the prospect to make the purchase.
What are the 4 stages of the selling process?
The main 4 stages of the selling process are:
- Prospecting and qualifying.
- Presenting the product.
- Negotiating and handling objections.
- Closing the sale.
Conclusion
The SaaS industry is large enough to generate recurring revenue whether you have a sales team or not. It all comes down to your product and how well it fits the company’s sales process and the target market.
However, you should carefully select a pricing model that suits your product most, do research, find qualified leads, and try to turn them into loyal customers by continuously nurturing them.
Ready to improve the key metrics and optimize your SaaS sales model for your target customers? Get your free Userpilot demo today!
Optimize Your SaaS Sale Process Stages with Userpilot
