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. This distinction is transparency, or lack of it in the case of the software company and an aspect of the sales process that can be applied to various as-a service companies, including SaaS hosting providers.
Traditional software companies train their sales employees “to refrain from divulging more information than the minimum required to make a sale”. Due to the one-time payment structure of those Change failure rate deals that creates a quick-term attention to both the sale and the relationship you have with the potential customer. But it is true that with SaaS services, users can “try before they buy” and, based on the duration of the contract it is possible to walk away at any moment in the event that the service isn’t suitable for them. This allows for a longer-term view creating trust and transparency between the two parties more than just a matter of time.
As Joel points out, Google AdWords is a fantastic example
“Ask yourself how much you’re spending now in Google AdWords without ever having talked to a sales representative. How does this compare to your own average selling price for online transactions? Consider asking yourself why. The answer is transparency, from reputation of the company to cost-per click.”
While Joel talks about the software business, this is the case for any product that could also be services including SaaS hosting. This is seen with big ticket items like houses and cars and also with everyday purchases such as books and music. The bigger the purchase and commitment, more risk involved and the less trusting the two parties are. Complete transparency is the only option to make sense when dealing with Product-as-a-Service businesses, just as it’s the sole option when dealing with SaaS hosting providers.
Anyone familiar with”the prisoner’s dilemma” (a game similar to a negotiation process) knows when the game is played once (like purchasing a product such as cars) both parties have an motivation to “defect” or lie (it is the rational strategy). When games are played repeatedly times over a period of time that is unknowable to both parties (like a subscription based service) the rational choice would be to “cooperate”. The repeated play of “games” creates the incentive to make the leap of faith to adopt a cooperative strategy. If one of the parties is dissatisfied, the other will defect for the remainder of the negotiations , and reverse. In the event of a single defection, there is no trust, and everyone will be worse off for the remainder of the series of games.
The model of as-a service is based by these “repetition in games” confidence and co-operation; While you could gain some short-term benefits if you hide the truth but over time, you’ll be losing an important relationship. This dedication to transparency is one of the less talked about advantages of not just transferring your business to an as-a-Service company , but also buying from these kinds of SaaS hosting firms.
Many SaaS hosting providers see the same phenomenon day in and day. When businesses realize the value of transparency, they will engage with their customers to try to understand their needs. If the demands of prospective clients aren’t in line with what the SaaS hosting company can offer then the company will let them know. There’s no reason for an as-a-Service company to market a product to customers that they do not require. That’s not an ideal win-win situation. The client is likely to figure out that they don’t require your help and decide to move elsewhere. This results in unproductive work for both parties. This is something that every as-a-service company should do.
Think about this: Have you seen an as-a-Service company prosper that didn’t have transparency and trust?
Online Tech owns and manages SAS-70 secure and reliable multi-tenant facilities across the Midwest. Offering a wide range of managed and colocation server options for SaaS hosting, Online Tech reduces IT cost of data centers operating risks, downtime and operational risk and makes sure that the SaaS clients that their servers are always available, always online, and always secure.