Closing the Software Deal – Part 2

by Paul Temple

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Closing software deals with less legal hassle demands more than just a good agreement – it requires a well-informed and well-equipped sales team. If your company offers SaaS or licenses software to other businesses, consider these additional tips to close deals quickly and at a lower legal cost.

Build a Legal FAQ

Your team should know most of what’s in its agreement and why it’s there. Customer stakeholders who are not attorneys are quite likely to ask your sales team questions that are both ‘legal’ and important to the deal, long before an attorney is involved. Getting the answers right demonstrates your company’s experience, preparation, and ability to ensure customer success, all while speeding the deal to close. Getting the answers wrong – or not knowing the answers – simply decreases the likelihood of closing the deal or increases customer acquisition cost for no good reason.

A few examples of questions for which most sales teams should know the answers, particularly in SaaS deals:

  • What are the details of your SLA? Do you offer credits or refunds? If so, how are they calculated? What’s been your uptime historically? When do you schedule routine maintenance? Are you using third party hosting providers? If so, who?
  • Do you use data uploaded by your customers into the platform for any reason other than providing your service? If so, what are you using and why are you using it?
  • Are customers able to download their data from your platform? If so, how quickly can it be done? In what formats? Where are you storing that data?

You may even find it helpful to develop a ‘legal’ FAQ written by your attorney with guidance from your sales leaders. Sales leaders can ensure the FAQ includes answers to the legal-related questions they commonly field in the trenches, while your attorney can ensure the answers reflect what’s in your agreement. When new questions come up on a recurring basis, your attorney can also update your agreement where appropriate.

Create a Decision Tree & Fallbacks

Assuming you’ve closed enough software deals to know what is and is not negotiable in your agreement, how can you be more efficient? When you’re part of a small startup, virtually everything filters up. But, as your company grows, that cannot continue when the number of deals grows as well. What types of matters need to be on your plate – and what types of matters can you leave to the head of sales? Are you leveraging what you negotiated in prior deals?

They say the most important question in law is, “Who decides?” That’s absolutely true when closing a software or SaaS deal. If certain issues are commonly negotiated and you concluded they are minor, then consider whether it’s more efficient for your company to leave those issues to someone else. If other issues are more significant, then make clear who does and does not have the power to negotiate those items.

When you leave certain issues to someone else, provide alternative provisions that you and your attorney wrote and approved. You can even create an alternative version of your contract with footnotes for each of those alternatives.

Train the Team

Obviously, these solutions will not matter if your team does not know how to use them. But by this point, you may be asking yourself whether they have the time for what amounts to legal training. After all, they are busy trying to close deals, and they want to stay focused on the big picture.

If you’re convinced that some basic tools and process can help your company close software or SaaS deals with less legal hassle, put those tools to good use. Build an FAQ and iterate on it. Document a decision tree. Provide written alternatives. Critically, take the time to train your staff on how to use them. An hour of legal training and negotiating during employee onboarding or annual meetings can prevent more expensive back and forth months later. At the very least, the materials become simple resources your reps can leverage if they don’t remember the details.

by Paul Temple |

 
 

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