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:
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.