Marketing & Selling the Service Differentiation in SaaS Solutions

My previous post ‘Are there Differences for Marketing SaaS versus On-Premises Solutions?’ proffered that customers need to make 2 buying decisions with the increasing availability of mainstream SaaS alternatives to traditional On-premises solutions:

1. Which solution best fits their business needs
2. Which acquisition / deployment option best fits their IT strategy.

The second buying decision means that prospective buyers will want information and comparisons to help them make the best decision for their business.  This creates a need and opportunity for marketing and sales to establish additional differentiation for their solution based on the Service aspect of Software as a Service.  It may help to consider the following three questions more broadly to develop your Service differentiation for marketing and selling your SaaS solution:

Who are you competing against?
In the first buying decision of solution fit you are primarily competing against other vendor solutions.  In the second buying decision of acquisition / deployment options you are competing on multiple fronts such as:

• Other vendors on service costs, terms and delivery
• Other vendors on the delivery platform – is it just a SaaS solution or are there Platform as a Service (PaaS) and/or Infrastructure as a Service (IaaS) cloud computing differentiators?
• Customer’s internal IT organization’s perspective on SaaS solutions
• Other vendors and customer’s internal IT on service delivery – Service Level Agreement (SLA), operational controls, security, SAS 70 compliance certification and whether it’s Type I or II, etc.
• Financial – operational expenditure versus capital expenditure considerations
• Total Cost of Ownership – there’s a lot of spin from both On-premises and SaaS marketing and sales pitches about which model costs more over three, five or more years
• Inertia – some buyers and/or companies may be reluctant or even resistant to having their business systems run in a data center they don’t control.

Considering all the possible competitive points will help formulate your best competitive differentiation.

What are customers buying?
Although a customer needs to make 2 decisions during the buying cycle, once they decide on going with a SaaS solution, they are buying one inseparable solution comprising of the application functionality, acquisition method, services, deployment, provisioning and other elements to make it work.  In a previous post I suggested a bifurcated marketing approach to attack the market from two positions to find prospective buyers on either decision track.  However, the overall marketing and selling strategy should be on the goodness of the complete SaaS solution, because that’s what customers are buying.

What are you really selling?
The bottom line is that you’re selling trust – that the customer trusts your company, product and the representative people they’ve dealt with to provide the solution to satisfy their core buying motivations of solving business problems, developing new opportunities, improving performance, increasing profitability, etc.  This isn’t different for SaaS versus On-premises solutions, but SaaS adds another major dimension of trust in the Service aspect.  With the continuing commoditization of business software and minimal functional differentiation between products in the same category, Service is the operative word for differentiation of Software as a Service solutions.  Marketing and selling the Service differentiation will attract and engage prospective buyers, and trust in your company’s ability to deliver the Service will make the sale.

Do you have additional suggestions and ideas for marketing and selling the Service differentiation in SaaS solutions?  Your comments are always welcome.
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