Table of Contents

Executive Summary ................................................................................................................ 3

Introduction............................................................................................................................ 4

Stuck in the Past ..................................................................................................................... 5

3.1
3.1.1

Software buyers have changed, but sales processes havent ..................................... 5

Drawbacks with Direct Sales-Only Customer Acquisition ........................................ 6

Mind the Gap.......................................................................................................................... 7

4.1

Are marketing automation investments enough?....................................................... 7

4.2

The Lead Purgatory ...................................................................................................... 8

Online Self-service Is the Answer .......................................................................................... 9

5.1

How self-service closes the gap ................................................................................... 9

5.2

Revolutionize customer interaction with an Online self-service channel ................. 10

5.2.1

Enhance free trials with better support and self-service tools ............................... 10

5.2.2

The Usage-Qualified Lead ...................................................................................... 11

5.2.3

Give customers the power to buy on their own with seamless upgrades .............. 11

Benefits of the Self-Service Channel ................................................................................... 12

6.1

Increase customer satisfaction .................................................................................. 12

6.2

Turn marketing into a revenue stream ...................................................................... 12

6.3

Reap the benefits of usage data across the organization.......................................... 13

6.4

Eliminate channel conflict and empower teams ....................................................... 13

6.5

Upgrade sales with UQLs ........................................................................................... 14

Get your product ready for self-service ............................................................................... 15

7.1

The 30-60-90 plan for embedding self-service commerce in the sales process ....... 15

7.1.1

30 days: Prepare the product for successful self-service........................................ 16

7.1.2

60 days: Get the self-service train running smoothly ............................................. 17

7.1.3

90 days: Recapture UQLs for direct sales ............................................................... 18

7.2

Next Steps: Collaborative Sales.................................................................................. 19

Conclusions and Key Takeaways .......................................................................................... 20

About Avangate .................................................................................................................... 21

Executive Summary

Software companies are spending a lot of time and money to attract prospects that never turn
into customers.
As new technology and resources transform the software and cloud services industry,
companies stuck in outdated customer acquisition processes are leaving money on the table.
Research shows that 60% of all software research is done online--before a prospect ever
contacts a company to enter the sales process. Further, Avangates internal research reveals
suggests almost 40% of all the leads a software firm does generate will never become ready to
engage with the direct sales team.
The paper describes the benefits of establishing a bold new online self-service channel to grow
revenue and improve operations and also examines the old-school customer acquisition
methods companies are mired in. It also shows software companies how to build out a working
self-service channel that will add incremental revenue from under-served but potentially very
profitable leads, offset marketing costs and serve as an upsell path to direct sales.
At its core, online self-service enables the long tail of sales, capturing the growing population
of customers who demand a unique, self-defined experience, not a standard direct sales
process. Recovering even small amounts of revenue from a large amount of customers, who
would otherwise remain in Lead Purgatory, can make a big difference in the long run for your
companys bottom line.

2 Introduction

In software sales today, purchasing power has shifted towards a demanding individual buyer
who expects all software to be available for instant purchase on any channel, using any model,
in any market.
But too many enterprise software companies persist in an older model with the sales funnel
handled by direct sales teams alone, even though that approach doesnt win over the new B2i
buyers. So how can software companies do more to serve their leads--and convert them to
customers?
The new software-purchasing paradigm has seen companies heavily invest in marketing
automation to complement direct sales teams. While this is the right first step, it clearly isnt
enough.
The next step is to establish a new online self-service revenue channel that empowers leads to
become customers on their own terms. Building a dynamic self-service pipeline will help
companies recapture revenue, improve customer relationships, and enjoy a higher return on
their sales and marketing investments.

3 Stuck in the Past

3.1 Software buyers have changed, but sales processes havent

For decades, software companies approached handled business-to-business (B2B) sales by

building direct sales forces to pursue big, complex enterprise deals, typically sold into the IT
department and carefully monitored by the Procurement department. Many companies have
become adept at serving these buyers, refining their lead qualification systems, purchasing
processes, and licensing schemes over time.
In the last few years, changes in technology, such as consumerization of IT including the
widespread availability of software-as-a-service (SaaS) and BYOD and mobile devices, and new
revenue models (subscriptions) have drastically changed the software purchasing landscape.
Today, even enterprise software companies can no longer focus on B2B, but must support a
new type of sales: one that we call business-to-individual (B2i).
The B2i model recognizes that software buyers have access to more information and tools than
ever before. Buyers have higher expectations and are also more agile, making many small,
specialized purchases rather than a few large, one-size-fits-all ones. Modern software buyers
are no longer prepared to make the type of big upfront commitment with a large licensing deal
that the traditional B2B enterprise software sales process was designed to promote as
witnessed by falling deal sizes.
Additionally, most modern buyers are accustomed to using sophisticated consumer
technologies, often free of charge, that offer the ability to seamlessly upgrade, downgrade, and
modify components as they wish. As a result, software buyers are often frustrated with the
lack of similar flexibility when it comes to enterprise software. Ultimately, modern B2i

customers demand to interact with software on their own terms, and arent always ready to
engage with sales reps right away.
Direct sales teams alone are not enough to meet the modern software buyers evolving needs.
In the B2i world, the individual buyer is now in charge. Unfortunately, most software
companies havent adjusted to this industry shift, and consequently are missing out on a
significant number of business opportunities.

3.1.1

Drawbacks with Direct Sales-Only Customer Acquisition

Todays demanding buyers are smashing the traditional sales funnel, and are prone to thwart
traditional direct sales in many ways, such as:
Jumping from the beginning of the sales funnel to the negotiation stage and back
Wresting control of the sales process away from the sales team
Being more knowledgeable than sales about the product, market and competition
Eschewing the traditional glitzy sales demo process and asking to get hands-on
Demanding direct access to expert resources, like product managers and product
developers
Insisting on detailed ROI analysis instead of simple feature-function lists.

As long as direct sales teams remain unprepared to deal with these new demands, buyers will
continue to evade the restrictive sales process or, worse, buy from someone else.

4 Mind the Gap

4.1 Are marketing automation investments enough?

Enterprise buyers are not usually ready to commit to big deals, but they are typically eager to
learn and determine a shortlist of vendors that may meet the needs. Marketers have
recognized this willingness and responded with sophisticated content marketing, lead
nurturing, and drip marketing campaigns that drive buyer interaction.
As companies become more adept at marketing automation, their articles, blog posts, email
newsletters, social media posts, and other outreach continue to build interest in products and
generate new leads for the top of the sales funnel.
With sophisticated lead scoring rules, the right leads get passed over to sales, hopefully for a
speedy close. If not, they are sent back into the lead nurturing pile with drip marketing until
the prospect is ready for a sales conversation.
Or at least, that has been the story thus far.

4.2 The Lead Purgatory

The real issue arises when there are prospects that will never be satisfied by direct sales, ever.
Why?
Even though the prospects are in the right target profile, they qualify on all dimensions
except for the budget which are smaller
Some are smaller customers but are interesting in trying out an enterprise-class solution.

If sales teams arent meeting customer needs, even the most successful marketing automation
serves primarily to create a sort of Lead Purgatory.
Here, large groups of leads that are interested in the product but not yet ready for the
traditional direct sales process can linger indefinitely. The more successful a companys
marketing efforts are, the more marketing qualified leads (MQLs) are delivered to the direct
sales team. But the closer sales reps stick to their call scripts, the more they shove these MQLs
back into Lead Purgatory--that dreaded gap between marketing and sales.
Having already consumed all the marketing content available to them and reached the end of
their free trial period (if one is available), these prospects now get nothing from the software
company but sales calls for which they are a poor fit.
Ultimately, leads are falling into purgatory not because theyre uninterested or because the
marketing messages didnt work, but because the sales process is pushing them down a path
theyre not prepared to take.
And working harder is not the solution. As Marketing and Direct-sales teams ramp up their
efforts, the gap between sales and marketing grows larger, and more leads end up stuck in the
lead purgatory. Investing heavily (and exclusively) in marketing automation and direct sales
sets up a cycle of failure for companies and prospective buyers alike. To close the gap, software
companies need to disrupt their outdated sales model and adopt a new approach to converting
leads to customers.

Online Self-service Is the Answer

5.1 How self-service closes the gap

To convert more leads into customers, software companies need to embrace the new and
more flexible B2i sales process. Rather than shoving unqualified leads back into Lead
Purgatory, software companies need to ensure the sales process is flexible enough to
accommodate all kinds of prospects. Online self-service is an ideal way to empower leads to
close the gap between marketing and sales and become customers on their own terms.
An online self-service channel gives the individual software buyers the opportunity to make
their own decisions, outside of a direct sales relationship. Using self-service tools, buyers can
choose what to buy, how much, at what price point, and for how many users. They can also
start, end, upgrade, downgrade, or otherwise modify any aspect of their product or
subscription deal at any point. With an active self-service channel, leads are free to meet their
own needs and become customers without working directly with anyone from the
organization--unless they want to. Essentially, self-service gives buyers a free ride out of Lead
Purgatory.
A strong marketing automation and lead-nurturing program that stimulates ongoing customer
interest is the ideal foundation for a self-service channel, which must support free trials,
sophisticated usage analytics, and easy-to-use tools for configuring account elements. In the
self-service channel, products need to be capable of adapting to customer needs. An effective
self-service channel allows monetization of more leads.

5.2 Revolutionize customer interaction with an Online self-service channel

By creating a self-service sales channel for customers and aligning marketing automation with
commerce, companies can rescue their leads from purgatory. This section covers the elements
of a self-service environment that encourages conversion.

5.2.1

Enhance free trials with better support and self-service tools

Being able to try a product before buying it is one of the biggest advantages of SaaS delivery.
Trials and freemiums in the SaaS model do away with complicated onsite installation processes
and get products into customers hands faster, they are among the best sales tools a company
can have, and they play a major role in the self-service channel as well.
Making it easy to initiate a free trial is a great way to engage leads early on, but users cannot
simply be left to muddle through the process of learning a product on their own. To ensure
that customers get the most out of their free trials, companies need to provide excellent
support and documentation in a variety of formats (like online, video, email, and phone
support). This will help improve the trial experience and encourage leads to become
customers.
Companies need to provide simple self-service tools so that leads can easily upgrade and
become customers on their own terms. By helping leads self-convert from a free trial to full
account status, companies create a conversion path that complements the direct sales team.
For a certain set of customers, this is all thats needed to drive long-term loyalty.

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5.2.2

The Usage-Qualified Lead

Too many companies view free trials as just another lead generation strategy and miss the
most important insight for what they really are: an incredibly important channel for gathering
insights about product usage.
In fact, information about product usage can even create an entirely new type of sales lead: the
usage-qualified lead (UQL). These highly qualified leads have demonstrated their willingness to
engage with the product during a free trial or even a self-service upgrade. At an appropriate
time in the sales process, sales representatives can leverage usage information to demonstrate
an understanding of the leads goals and develop a specific plan for using the software to
achieve those goals. In this model, usage information strengthens the companys ability to
serve the customer, and can also increase the value of the customer relationship over time.

5.2.3

Give customers the power to buy on their own with seamless

upgrades

Many customers will convert by themselves, which is a major purpose of the self-service
channel. So when that magic moment occurs--when the lead is satisfied enough with a free
trial to upgrade--everything has to go perfectly. Customers must be able to upgrade seamlessly
with just a click, specifying the exact feature set, price point, subscription duration, and other
specifications that meet their needs.
When buyers can upgrade seamlessly, without contacting sales, they bring in revenue that
would otherwise have been lost or more expensive to acquire. This makes self-service a pivotal
new revenue stream that also offers high returns on small investments.
In addition to bringing in revenue, self-service can also serve as a uniquely successful nurturing
program, with customers freely upgrading, downgrading, and experimenting with new features
over time. By offering self-service tools so customers are able to create their own experiences,

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companies extend the effectiveness of their lead nurturing programs and build more revenue
with minimal effort.

Benefits of the Self-Service Channel

Introducing a new self-service channel brings a number of obvious benefits, like more revenue
and less churn. But there are other, organization-wide benefits--like the addition of a whole
new type of sales lead--that also merit close examination. This section explores some
distinctive benefits of self-service and why each is important.

6.1 Increase customer satisfaction

Being able to try products and upgrade on their own is the ideal outcome for many B2i buyers.
Driven by a desire to fully understand a product before committing to it, these buyers are
immensely satisfied by being able to interact on their preferred terms or make desired changes
to their trials or accounts. Being able to access sophisticated self-service tools can dramatically
increase these buyers satisfaction, which in turn can prompt their interest in converting.

6.2 Turn marketing into a revenue stream

As companies invest more in lead nurturing and marketing automation, they need to avoid
spending big bucks on marketing only to keep loading up Lead Purgatory. By providing more
avenues for leads to become customers, the self-service channel helps marketing pay for itself
in a way that it couldnt before. Instead of all of the marketing budget simply going to generate
leads, a part of it serves to generate usage and revenue, helping justify additional marketing
expenditures in the future.

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6.3 Reap the benefits of usage data across the organization

Self-service produces more of that Holy Grail for marketers: data. Usage data from trials helps
marketers send better messages to leads: message that are more in line with what people
actually do, not just what they click on. This refines marketing messages and increases the
likelihood of future conversions from lead to revenue.
But usage data helps in other areas beyond marketing. Knowing how customers really use
products can revolutionize product design, packaging and pricing, even allowing for automatic
adjustments in pricing or feature sets based on real time buyer behavior. Companies can let
conversion rates drive pricing strategy and feature packaging. By basing their product pricing
and packaging on a well developed understanding of how customers currently use the product,
companies can improve conversion rates.

6.4 Eliminate channel conflict and empower teams

In too many organizations, the marketing, commerce, and sales departments are siloed--in part
because no self-service channel exists to unite them. By closing the gap between departments
and providing data everyone can use, a self-service channel can eliminate channel conflict and
get organizations working together more seamlessly. Marketing no longer needs to fight with
sales over who owns a lead. Instead, the self-service channel fills the gap between teams and
operates seamlessly to nurture customers until the lead self-converts or initiates a sales
interaction. In this way, the self-service channel not only fills a gap for customers, but for the
organization as well.

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6.5 Upgrade sales with UQLs

Along with streamlining internal processes, the self-service channel introduces an exciting new
tool for the sales team: usage-qualified leads (UQLs). These are highly qualified leads who are
interested in a product not simply based on vague promises about what it can do, but on actual
usage and interaction over time. This usage data in turn helps new, more collaborative sales
representatives design unique customer plans based on actual usage. Experience with the
product or service not only improves the quality of leads going into the sales organization, but
also the ability of sales reps to serve those leads. This provides a clear path to successful
ongoing relationships with UQLs.

Moving to a self-service channel has a number of benefits: pleasing customers, building

revenue, and streamlining internal operations. But before companies can bask in those
benefits, they need to be sure their products and teams are ready to support an active selfservice sales channel. Heres how software companies can make that happen.

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7 Get your product ready for self-service

Weve established that demanding modern software buyers require a new self-service channel,
and explored some features and benefits of self-service. Its clear that a self-service channel
will complement and extend existing sales and marketing operations, please customers, and
bring in new revenue streams. But not every organization is ready to launch a self-service
channel, much less support one over time. To help companies get started, we analyze the
elements that go into implementing self-service.

7.1 The 30-60-90 plan for embedding self-service commerce in the sales
process
Most companies dont have the technical tools for self-service in place yet. Even when
advanced usage monitoring is in place, it typically doesnt take the next step and connect
companies with the commerce tools that are necessary to transform usage into revenue.
To create an effective self-service channel, companies first need to establish a modular product
that features complex entitlement management, enabling usage monitoring and modular
pricing. Companies that have not yet upgraded their product to be ready for self-service will
need to take some steps to get ready, but the payoff will more than justify the benefit.
Even when introducing a self-service sales channel is already technically feasible, it may also
require a subtle cultural shift at a company. For a firm that has emphasized qualifying the
buyer, not adapting the product, moving to self-service can be jarring. As they transition to
self-service, companies should to take care to adapt their internal marketing and sales mindset,
not just provide the technical basis for self-service.

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7.1.1

30 days: Prepare the product for successful self-service

Self-service sales are based primarily on product use, not relationships. So to make self-service
work for your customers, companies need to find--or build--a product that really fits with the
self-service model. This product may be slightly more low-end or less feature-rich than some
top-of-the-line products, but it could also be your most cutting-edge technology--something
that people are really motivated to try right now.
The selected product will need to be broken down into smaller components or modules. This
will allow self-service customers to pick and choose the elements they wish to use, helping
them get results faster and avoid having a frustrating experience with an overcomplicated
product. By making it possible for customers to self-configure product components from the
beginning, companies prepare themselves for long-term success with self-service.
In addition to breaking down product components, companies will need to create clear pricing
strategies for those individual modules. Its also key for companies to automate the behindthe-scenes aspects of every module, ensuring that pricing automatically adjusts when new
features or more copies are added, discounts are properly applied, and customers can easily
add new users or seats without disrupting other elements.
From a technical perspective, breaking up a product into modules is typically feasible. It may be
more difficult to decide which features should be broken up and how they should be priced.
Companies should look to existing data from existing customers on signups, usage, retention,
and churn, to guide these tough decisions. This data will also inform marketing campaigns for
specific groups. Companies looking to launch self-service sales should at minimum follow these
steps:
Identify existing price points and usage patterns among customer groups
Assign value to different product features
Establish tiered pricing and feature structure for self-service
Design product breakdown accordingly
Automate pricing adjustments based on new features and modules

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Make sure customers can get started quickly with each new module

Companies need to take this time to get their products ready for self-service in the right way--a
way that customers will respond to. If the product configuration and pricing are too complex
for leads to understand, theyll never launch a trial, much less self-convert to customers.
Getting it right with one product is better than getting it wrong with several.

7.1.2

60 days: Get the self-service train running smoothly

Once the product configuration has been established, its time to start promoting the selfservice options to prospects. Companies may target new leads, leads stuck in purgatory, leads
that the sales team has struggled to engage, and even existing customers. It may also be
worthwhile to promote self-service to prospects that previously abandoned free trials or
stopped using the software. Self-service options might be the deciding factor that brings these
former customers back into the fold.
Initially, companies will need to lean on existing trial and customer usage data to target their
promotions. However, after opening up the self-service sales pipeline, software vendors can
track usage analytics to flesh out the specific profiles of the users that are most engaged in selfservice. In particular, companies can look to the factors that prompt customers to increase
usage or upgrade from free trials. Having this rich new usage data close at hand will help
improve marketing and sales efforts and grow revenue.
Companies that want to help customers get results from self-service should:
Identify specific audiences that can benefit from self-service
Experiment with promoting self-service to these leads or customers
Continue to develop the profiles of leads or customers best suited for self-service
Increase efforts to drive appropriate audiences toward self-service
Track results and begin to strategize how self-service integrates with the rest of the
organization

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After the self-service product is proven and tested, and leads are regularly engaging through
self-service channels, its time to add the final pieces of the puzzle: sales and marketing.

7.1.3

90 days: Recapture UQLs for direct sales

By preparing the product and tracking usage, companies lay the groundwork for amping up
their direct sales organization through better integration with self-service. A few days or weeks
of self-service usage may prompt prospects to upgrade on their own, or it may get them ready
for more involved sales conversations. By using the product in depth, these experienced leads
become usage-qualified leads (UQLs), who are ready for a serious discussion with informed
sales representatives who understand their needs.
Arming direct sales staff with detailed usage information from a self-service account can
significantly increase the effectiveness of the sales team. Knowing the prospects needs prior to
interacting focuses the sales relationship on more meaningful interactions than initial
qualification.
Some of the elements that may help direct sales teams make the most of UQLs include:
Time elapsed from signup to upgrade
Total amount of time using the product
Commonly used self-service features
Drops in usage or frustration points
Usage quotas (emails, downloads) reached
Any further data about end customer interaction

As a new type of lead providing unprecedented insights for direct sales team members, UQLs
have the potential to make the relationship between customers and salespeople more
collaborative than ever before--right from the start, as well as over time.

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7.2 Next Steps: Collaborative Sales

A strong self-service sales channel has the potential to empower sales representatives like few
other tools. Instead of putting the burden on the sales rep to draw out information from the
customer, self-service allows customers to demonstrate (through direct action) whats
important to them. This equips sales representatives with excellent information going into
discussions, helping them refine plans for achieving customer goals with the software in use.
Ultimately, self-service helps the software sales representative take on a new, more
collaborative role: one where the question is, How can I help you use the system better?
instead of Whats are you trying to accomplish? The goal of all this hands-on involvement is
to make the usage experience so enjoyable that the lead cant say no to becoming a customer.
Self-service helps shift the sales teams focus from qualifying leads to helping them design a
plan to expand their usage. Making the product more modular not only helps customers get
started with self-service more easily, it also helps sales representatives and account managers
provide more tailored solutions for specific customer groups, increasing their chances of
success.

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8 Conclusions and Key Takeaways

Companies that want to grow usage and sales cant afford to ignore self-service as a revenue
transformation channel.
We already know that software-as-a-service has created a new kind of customer. This customer
is more demanding, more driven, and less willing to work with your traditional sales approach.
They demand being treated as individuals with more personalized options, tailored options and
closer attention to servicing. At Avangate, we call this shift B2i Business-to-Individual. This is
destroying the traditional, linear model of the sales funnel.
In the new model, artificial barriers to product usage (Call Sales For Price Quote) are
removed and leads can become customers all on their own, and expand their usage by working
with sales reps.
Investments in marketing automation technologies, while necessary, are partial solutions for
addressing B2i customers. The next logical step in the chain is the ability for a commerce
linkage to complement the lead nurturing and scoring.
Products suited for a B2B sales environment need to be modularized to enable consumption in
smaller chunks less enterprise sales, more incremental and closely monitor usage.
Selling outside the funnel creates a long tail of prospects. Recovering small amounts of revenue
from a large number of otherwise under-served customers can make a big difference in the
long run for your company. But the new approach isnt a replacement for direct sales--its a
complement to it, and even helps deliver extremely qualified leads right back into the sales
process as an upsell.
Bottom line, if your business does not have the ability for your prospects to self-qualify and
sign up online for your product, why not? Its time to open up more options and claim the
money left on the table. Or risk your competition scoop it up.

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9 About Avangate
Avangate is the leading customer centric commerce
provider that enables companies to increase their
online sales across touch points, manage
subscription billing, and grow their distribution
channels to profitably scale and enter new markets.
Avangates scalable and integrated solutions include a full-featured, modular and secure
eCommerce platform, a partner order and revenue management solution, as well as a
constantly expanding worldwide affiliate network.

More information can be found on www.avangate.com

Avangate Inc.
Redwood City CA., USA
Tel: (650) 249 - 5280

Avangate B.V.
Amsterdam, The Netherlands
Tel: 31 20 890 8080

info@avangate.com
www.avangate.com

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