3 Types of SaaS Sales Models

3 Types of SaaS Sales Models

There are three GTM sales motions found at B2B companies today. Each one seeks to maximize annual recurring revenue in different ways.

Traditional enterprise sales has been around for a couple decades. Self-serve and hybrid models have emerged in the past several years.

Self-Serve: The Most Efficient

Self-serve is a bottoms-up sales motion, with customers as the end users. Users try out a product’s free tier and potentially upgrade for more features. Self-serve pricing is affordable. Deal sizes are small, but the volume of transactions is high.

This model is heavily inspired by consumer software, where the product is easy to use and purchase without hand holding from sales reps. Given the pricing, creating a sales team simply isn’t cost-efficient. For example, Calendly first began as self-serve. With the first paid tier being $8 a month, it wouldn’t make sense to have a sales rep close just this one user.

A key component of self-serve is that users sign up for the product for free instead of going through lead forms and demos. This product-led approach is increasingly common because it reduces customer acquisition costs (CAC).

Self-serve is highly efficient. The limitation is that it’s product-only, with no involvement from sales teams. In B2B, there is an untapped potential to accelerate sales for larger opportunities through a predictable outbound motion.

Enterprise: The Biggest Deals

While self-serve is simple and fully automated, enterprise sales is complex and high touch. It starts top-down: sales reps contact executive buyers who manage a sizable team and budget. Through months of demos, negotiations, and due diligence, the account executive convinces the buyer that the product can transform the organization.

Because of the large deal size and enterprise product capabilities, both the sales team and buyer want this full-service approach. The sales team gets to establish trust, explain a highly complex product, and tailor the deal. The buyer gets custom contracts, price negotiation, and a point of contact when problems occur.

That said, traditional enterprise sales has become less popular in recent years. Although executive buy-in is still needed for large deals, the drawn out sales process and lack of initial adoption from end users is a big hurdle to closing deals. Today’s buyers require more agile and short sales cycles.

Hybrid: The Best of Both

You might’ve noticed a bit of tug of war between the self-serve and enterprise sales models. How do you balance self-serve’s scalable deal volume with enterprise’s profitable deal size? Do you have to pick between fully automated versus full-service?

Not at all! That’s where the hybrid model, also known as product-led sales, comes in. Product-led sales starts self-serve and moves upmarket through sales teams. It marries bottoms-up and top-down sales motions. Reps can turn free signups into paid users, or assist a team of active users into an enterprise tier.

By talking to high intent Product Qualified Leads, sales teams are equipped with concrete use cases to present to buyers. They can assist with further product adoption for end users, along with the high-level administration for executive buyers.

Modern SaaS companies like Slack, Zapier, and Notion start out product-led and layer in sales. It is a highly strategic GTM motion to choose. Of course, you can still keep a pure self-serve or pure enterprise motion alongside the hybrid model.

Most products today are user-friendly enough to leverage product-led acquisitionAND valuable enough to speak with buyers to unlock additional revenue. Product-led sales combines effective automation with top notch service. Your customers buy in the way they prefer, and your sales achieve non-linear growth.

Powering Each Motion

There are purpose-built solutions for each model. Traditional CRMs are perfect for enterprise sales. Product analytics are great for self-serve motions. Yet hybrid tooling that combines this sales and product data is still quite new. As Sapphire Ventures noted:

To date, in a hybrid PLG model, there has been a disconnect between the ‘Product-Led’ and ‘Rep-Assist’ sides of the equation. The product usage data required to bridge the gap has long been available, but a dedicated tool to serve this data to GTM teams has been lacking.

Product-led sales has proven so compelling, that many companies spend months to build an internal tool. Now, what if going hybrid was as easy as the other two models? With Calixa, it is.