Ideas for Traditional software companies

A great article at Joel York’s SaaS Blog (Chaotic Flow) titled “SaaS Marketing Tips – The Truth Shall Set You Free”, explains the critical difference in the sales process between selling traditional software and Software-as-a-Service. The main difference is transparency or lack of it in the case of the software business and a sales process difference which can be applied to different as-a-Service companies including SaaS hosting companies.

Traditional software companies teach their sales personnel “to not divulge any additional information beyond the minimum required to conclude the sale”. Because of thedeployment frequency one-time payments arrangement of these deals they create a short-term focus on both the deal as well as the relationship with your potential client. However, with SaaS services, customers can “try before buying” and, depending on the contract length, walk at any time should the service not be to their liking. This allows for a longer-term view which makes transparency and trust between both parties more normal.

As Joel notes, Google AdWords is a great example:

“Ask yourself what you are spending right today in Google AdWords without ever having met with a sales representative. What is the difference to your personal typical selling price for online transactions? Now, ask yourself why. The answer lies in transparency, from reputation of the company to cost-per click.”

While Joel focuses his discussion on the software business, this is the case for all products that can also be considered services like SaaS hosting. This is seen with big ticket items like homes and cars and also with everyday purchases such as books and music. The larger the purchase and commitment, more there is a risk and the less trusting both parties become. Transparency is the only sensible option when dealing with businesses that offer Product-as-a-Service similar to as it’s the only possible option for dealing with SaaS hosting companies.

Anybody who has experienced”the dilemma of the prisoner” (a game similar to a negotiation) can tell when the game is played once (like purchasing a product such as cars) both parties have an desire to “defect” or lie (it is the most rational way to do it). When games are played repeatedly times for an amount of duration that is unknown to both sides (like an subscription-based service) the rational choice should be “cooperate”. The repeated play of “games” gives the players the motivation to make the leap of faith into a collaborative strategy. If one of the parties is dissatisfied then the other one will follow throughout the discussions and reverse. In the event of a single defection, there’s no trust, and everyone will be worse off over the course of the game.

The as-a-Service model is built on that “repetition in games” collaboration and trust; although you may gain in the short run if you hide the truth but over time, you’ll lose an important connection. The commitment to transparency is among the lesser talked about benefits of not only moving your business to an as-a-Service company , but also buying from these types of SaaS hosting companies.

Many SaaS hosting firms see and experience this every day. When companies understand the value of transparency, they’ll be in contact with all their potential customers in order to better understand their needs. If the needs of prospects don’t align with the SaaS hosting company offers it will inform them know. There’s no reason for an As-a-Service business to offer customers that they do not require. That is not an acceptable win-win scenario. The client will quickly discover that they do not need your service and move to another company. This results in unproductive work for both parties. This is something companies offering as-a-services must practice.

Take a look: have you ever seen an as-a-Service business be successful that doesn’t have trust and transparency?

Online Tech owns and manages SAS-70, a secure and reliable multi-tenant data centers throughout the Midwest. With a variety of managed dedicated and colocation server options for SaaS hosting services, Online Tech reduces IT data center expenses operating risks, downtime and operational risk and makes sure that the SaaS clients their servers are always online 24/7, online and always secure.

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