Here are some basic rules for when you consider discounting your SaaS products or services. When you discount your SaaS Pricing, what did you get in...
Heavy-, Light- Or Zero-Touch Go-To-Market?
Can customers determine what they need by themselves, supported by the right content? If you believe this is possible, then don't hire salespeople. Resist the temptation and build a low friction self-service model. It might not look as sleek, but the scale and ROI are going to be worth it. This is what we did with Mightycall.com, a SaaS Startup that grew to profitability with zero salespeople. It's the only way to build a B2B SaaS company focused on Small Business without spending a lot of money on brand awareness early.
Partner (light touch)
Most SaaS businesses have a direct relationship with their customers. It’s the nature of the business model to interact with the customer as they use the product.
So why consider a channel? There are 5 main reasons to explore a channel model. Make sure you know exactly why you partner:
- The reseller provides you access to a specific market. This can be a specific segment, a group of prospects who already use a common solution or a specific part of the world. Or your channel partner could be a large website with a community of users that you would like to get access to. Access is valuable, and as long as you understand what you should pay for this access this is a good reason to partner up. An important part of your plan should be determining how long you think you’ll need this access before you can access this audience on your own.
- The solution provider "completes your solution" to make the sum more valuable than the parts for your customer. This can be the addition of professional services, a component, or even something simple like a warranty plan.
- The software partner adds specific functionality in the form of Intelectual Property that you don't have. This can be content or code, or a combination.
- If physical goods are involved, the distribution partner can provide valuable supply chain support.
- The partner executes the Go-To-Market cheaper/better/faster then you can (marketing, sales, onboarding, customer service, operations etc.).
All these 5 reasons represent a value. Sometimes you'll have to pay a margin for this, and sometimes you can build an affiliate model where no money exchange is needed. Be confident that you understand why you are partnering up, and what that's worth for you. This is a long-term, impactful decision.
Sales (Heavy touch)
This is by no means a bad choice, but it should be your last choice. Only build a sales team if you're 100% sure you cannot go the self-service route, and there are no partners who you can outsource your sales too. Even if you don't have natural resellers of your solution, there are alternatives to outsource your sales (especially early) to get "instant offense", like the team at Altus.