The Two Types of Sales in SaaS
Order-Taking vs Rain-Making
Words with different meanings might, sometimes, be better off split into two different words.
For example, the word “think” can mean “thinking logically” as in “I think the answer to the problem is x.”
But “think” can also mean “believe” as in “I think I should have a third cookie.”
I believe we would be better off if we reserved “think” for “thinking logically.”
In the world of SaaS, the word “sales” creates similar, subtle confusion. Sales has two meanings that are actually quite different:
There is sales as in “order-taking” which means no or virtually no sales cycle ie picking up the phone to take an order
There is sales as in “rain-making” which is selling through many conversations over a period of months with multiple customer stakeholders
These days, it’s common to advise product-led-growth (PLG) SaaS startups that they mustn’t forget to do sales. Can’t argue with that. But I’d like to see more emphasis on the type of sales that PLG startups should pursue.
For PLG, I’m a big fan of order-taking sales. It’s the most consistent with a product-focused culture. It’s usually the most capital efficient as order-taking sales reps require less compensation and are easier to train than rain-makers.
However, order-taking typically relies on a strong flow of inbound leads.1 This means word-of-mouth must be high & generally requires another inbound channel such as product virality or strong content. This is not easy to do, but super valuable when it happens.
SaaS startups that do “rain-maker” sales early on are typically less capital efficient. Rain-makers are costly plus often require additional spend for proper enablement.
For a PLG startup, having rain-makers also creates a risk that culture will tilt towards sales and away from the product focus that generated product-market-fit in the first place.
I’m probably guilty of over-simplifying here as there are shades of grey between order-taking and rain-making. That said, I’d recommend PLG startups aim their sales machine towards order-taking, not rain-making.
Occasionally, a SaaS startup can do high-velocity outbound without paying sales people an arm and a leg in compensation, but in my experience it’s rare for this to scale well.