Why Bi-Directional Qualification of Deals is Critical in SaaS Sales

Chad Quinn, President & CEO of Ecosystems, recently sat down with Martin Dove, Vice President of Subscription Sales Research at Technology Industry Services Association (TSIA) to discuss why bi-directional qualification of deals is paramount for the Subscription-as-a-Service (SaaS) model.

As Chad points out, winning a deal can be negative long-term if it is not actually a good fit for the organization. If the customer is not invested in the success of the partnership and the seller has sunk costs through either a prolonged sales cycle (missing other opportunities), invested high levels of resources, or given a large price discount, the sale may result in a net loss for the company. For example, the initial sale may be small or a loss, but, if there was strong bi-diretional qualification, there is likely an opportunity for account growth opportunities that can be substantial. Conversely, if the customer was never a good fit, the seller will likely not be able to renew and/or would lose the potential for profit from upsell or cross-sell because mechanisms were not in place for customer success.

Therefore, it is key that the seller engages in bi-directional qualification at every step of the sales process. Martin emphasizes this point when training new SaaS sales professionals, particularly those who come from a transactional selling model. With a transactional sale, there was usually no such thing as a bad deal. This is because the risk largely sat with the customer. The customer had to invest in expensive hardware and often commit to a much longer-term relationship, as it was more difficult to switch providers.

Now, according to Martin, there really are bad deals. This potential for loss requires marketing to engage in bi-directional qualification up front, in order to ensure that the correct prospects are being provided to sales. Bi-directional qualification also obviously needs to be engrained in the sales organization, and there are two main ways to elicit this change:

  1. Compensation and
  2. Systems and tools

The systems and tools should consistently reinforce the behavior that you are trying to drive.

Check out the full video below to hear Chad and Martin’s discussion.