Selling SaaS vs Services
Key Differences to Consider for Agency Owners
I’ve been asked a couple of times recently about the cultural changes when you switch from an agency to SaaS. Specifically given that you go from working across multiple projects to working on one product. I think this is a topic for another time, but it is nevertheless linked to what I’m talking about today. If you have a sales team used to selling services and you introduce a SaaS element, are there any cultural or operational changes to be aware of and how do you manage them?
Let’s begin by saying the size of the gap between services and SaaS sales depends on the type of SaaS you are selling. In many ways, enterprise sales is much closer to selling a professional service, but there are still some differences. If you are selling a lower-priced more self-serve SaaS, then the leap is a lot further. I’m going to talk about the key differences but broadly separate out ‘Self Serve’ and ‘Enterprise’.
1. Sales Process: Transactional vs. Consultative
Selling Services: Agencies typically rely on a high-touch, consultative sales process. When I ran an agency this was actually the best bit of my job. I loved getting the brief (especially from an interesting client), figuring out where we had done similar stuff before and then working with the creatives to see if we could come up with a concept that would ‘clinch the deal’. Although we ended up cutting and pasting a lot of stuff into our proposals, there was always a need for creativity and unique thinking. And while that might be intellectually rewarding, it also means you can end up putting a lot of resource (both time and money) into pitching.
Selling SaaS (Enterprise): Enterprise SaaS sales can resemble traditional service sales, requiring detailed discovery, relationship-building, custom demos, and procurement approvals. Quite often, an enterprise company might provide a brief for you to respond to, which resembles more of the services approach, too. The degree of customization of the sales pitch will depend on the amount of services that sit on top of the product. If every new customer needs a bespoke interface then clearly the process will be closer to what we’re used to in an agency.
However, even in enterprise SaaS, the focus is on selling a productized solution rather than a fully bespoke service. It’s likely that each response costs you less for a comparable logo than bespoke consultancy would. The key difference being that the product is the product. And if it doesn’t do everything that the customer wants, there is a good chance that the customer has to accept that. They likely get a much better product overall than they would be able to afford if the whole thing was built from scratch.
Selling SaaS (Self-Serve): Sales are often more transactional. The product does this, this and that - and, sure, you might want it to do more, but that isn’t going to necessarily happen for the customer right now (or ever). Customers expect to self-educate, try the product (via free trials or demos), and make purchasing decisions without heavy sales involvement. Generally speaking, the sales team are there to provide simple product demos and help with pricing queries.
2. Sales Cycle: Long & Custom vs. Shorter & Repeatable
Selling Services: For agencies, sales cycles can take months, involving multiple stakeholders and a back-and-forth proposal process. You may have to pitch creative or even build an MVP to prove you are the people for the job. At the same time, if you don’t have a product to demo (assuming it’s a bespoke requirement), you have to convince them that you can do what they are asking for. Maybe that’s through case studies of similar projects, but in many ways it will be a leap of faith for them.
Selling SaaS (Enterprise): Enterprise SaaS deals can also take months to close and they can also involve the same army of stakeholders to convince. But what you are selling is more tangible than service contracts because it already exists, and will likely follow a standardized sales framework. This helps because you know what works and all of your sales people are following a tried and tested approach. For some, the lack of ‘creativity’ in the response might be less appealing. If you are tasked with creating a response to a totally unique brief vs predominantly the same product with a bit of professional services on the top of it, you may find that you prefer one to the other. I know I do! But from a purely commercial point of view, having one thing that has addressed 99% of your prospects needs and objections is a way better place to be in than having to reinvent the wheel each time.
Selling SaaS (Self-Serve): SaaS sales cycles are often much shorter, sometimes just days or weeks, particularly if customers can sign up and start using the product without talking to a salesperson. Where sales are involved, it’s often at the final stages of consideration where customers are just checking a few final bits, or where they want to negotiate a price.
3. Value Proposition: Custom Work vs. Scalable Solution
This is a big one and makes the sales approach quite different.
Selling Services: The value is in your agency’s expertise, customization, and hands-on support. How often do you see agencies say something along the lines of ‘our biggest asset is our people’? It’s because customers aren’t buying anything you’ve already done, they are buying what they think you have the potential to do for them. It’s why we often roll out the Creative Director at pitches. We know that their decision might just come down to who they trust the most to do the best job.
Selling SaaS (Enterprise): Some level of customization may still be required, but in most cases, the primary cost is in the underlying product itself. People you are going to be working with are important, but fundamentally it’s about what the product does. It’s less likely you are going to have a superstar player that spends time with each prospect because you need to sell at scale. Prospects don’t tend to ask for the lead designer to join the pitch, but they might want to meet the product lead to understand the feature roadmap. For SaaS, the value proposition is about what the product will do for them, rather than how well their brief will be executed. The sales approach has to be about framing the problem and the differentiated value your product offers over the alternatives.
Selling SaaS (Self-Serve): This is even more so for self-serve products. The value is in the software’s capabilities and scalability. Customers are buying efficiency, automation, and the ability to solve a problem without needing a human-driven service. There is an acceptance that you have invested millions of dollars in R&D and they can use that product at a fraction of that cost, so long as they accept that if there are any compromises it’s most likely going to be on their side, not yours.
4. Pricing Model: One-Off or Retainer vs. Recurring Revenue
Selling Services: Agencies typically charge per project, on retainer, or based on time spent. This can leads to feast-or-famine revenue cycles. Pricing is often done on a line-by-line basis: X for hosting, X for design, X for front-end build, X for project management, that kind of thing. Potentially there might be ‘modules’ in there, too - perhaps around specific functionality. The purpose of pricing being laid out in this way is that it is easier to relate it back to the original brief. Pricing is generally done on a ‘cost-plus’ model - ie, for 5 days of a developer’s time who costs us $XXX, we will charge them out at a YY% mark up. Maybe there is a retained element, but it’s generally based on a multiple of people’s time.
Selling SaaS (Enterprise): Depending on the level of bespoke work or professional services that accompanies the product, pricing tends to be more modular and bundled together. The recurring nature is the most significant difference of course, but it is unusual to see pricing laid out in multiple line items. Rather you might see functionality bundled together in a “Good, Better, Best” approach. Check out Zendesk’s Pricing page as an example. In enterprise there may also be add-ons or premium features, but this is still a world away from pricing a one-off project.
Selling SaaS (Self-Serve): For both enterprise and self-serve, the focus has to be on the value the product delivers, rather than the individual features they get. Recurring revenue, for self-serve, is likely the only revenue (unless, perhaps, there is a hardware element too). In these cases, there is often little in the way of customization or add-ons. The aim is to simplify the prices, give an enormous amount of value for a relatively small cost and bank on the fact that your customers will pay you regularly for years to come.
5. Customer Expectations: Done-for-You vs. Self-Service
Selling Services: Clients expect hands-on support, customized work, and an ongoing relationship with your team. When selling and pricing the work, there is usually an expectation of what this is going to involve and how much it is going to cost. The idea is that whatever they want, so long as they are paying enough, they will get.
Selling SaaS (Enterprise): Enterprises may expect white-glove onboarding, dedicated customer success managers, and SLAs, but they still anticipate a scalable product rather than fully bespoke services. Unless the product requires it, there is generally a sense that updates, fixes etc will be handled as part of the overall subscription cost. At an enterprise level, however, there may be an expectation that they would get direct help either to get set-up or to improve the way they use the product to get the most value from it.
Selling SaaS (Self-Serve): Customers expect to onboard quickly, get value immediately, and use the product with minimal help. There is little sense that the customer needs to provide any ‘brief’ that the company responds to. It’s more of a ‘take it or leave it’ deal. There are resources available to help them get the most value from the product, which might include customer support. But that wouldn’t necessarily stretch to having a dedicated account manager who will sit with them for hours helping them optimize their instance of the product.
6. Growth & Scaling: People vs. Product
Selling Services: Growth is constrained by headcount. There is a direct correlation between the amount of people and the amount of work. This can often hold sales back. Not only is there a lot of resource that has to go into every pitch, but there comes a point where you physically can’t take on any more work and hit the deadlines the client requires.
Selling SaaS (Enterprise): Scaling may require more account managers and customer success roles, but the fundamental value is still in the product, not in delivering hours of service.
Selling SaaS (Self-Serve): Growth is driven by product adoption—one software solution can serve thousands of users without scaling your team proportionally. We went to 10,000 customers over a few years and yes, our costs increased significantly in that time. But the difference between staff levels when we had 100 customers compared to when we had 10,000 was probably an increase of somewhere between 5-10X.
Takeaways for Agency Owners
Your best Agency Sales People, might not be your best SaaS Sales People. For a start they may not want to sell the same product each time and instead revel in the challenge that each agency brief brings. They might also not be able to work in the automated, repeatable sales style that SaaS requires.
Shift your Sales Mindset: Selling SaaS (especially self-serve) is about making it easy for customers to buy and get value quickly. Enterprise SaaS requires relationship-building, but you’re still selling a repeatable product, not bespoke work. At an agency you might throw all you can at an important pitch, with SaaS it has to be relative to the lifetime value of the customer which is generally less than each service client and so there is an emphasis on building sales strategies that are easy to repeat at volume.
Rethink your Pricing Strategy: Move from proposal-driven sales to product-led growth (self-serve) or solution selling (Enterprise SaaS). Pricing needs to be simplified and value-based, not ‘cost-plus’. Avoid line items or charging extra for maintenance, unless it makes no sense to do so.
Prepare for a different Revenue Model: SaaS revenue is more predictable, but it requires a focus on customer retention and reducing churn. With agencies, of course you want to hold onto clients or have them come back for more, but you can never rely on it. With SaaS you absolutely have to rely on it or else you don’t have a business.
Transitioning from services to SaaS isn’t just a business model change—it’s a fundamental shift in how you sell, deliver value, and grow your business. Understanding these differences will help you navigate the transition successfully and build a scalable SaaS business that isn’t reliant on billable hours.
