What things would you want in a SaaS Letter of Intent?

Corey Blaser Sailor. Mormon. Entrepreneur.

October 25th, 2014

I am currently putting together a letter of intent to onboard beta customers prior to our launch. It is mostly to show traction for investors, but also to set certain expectations with our prospects. Our product is an enterprise SaaS platform, so our sales are a bit more complex, relationship based, and a simple "enter your email" landing page does not work for us. We will be presenting the LOI face to face to our prospects and asking for their commitment.

Does anyone have any specific insights or examples of an LOI they have used in the past?

Sandeep Arneja Co-founder & CTO at ListenLoop.com

October 25th, 2014

Have the LOI lay out the exact price a client would be willing to pay, what that price would get them from you and how soon would they be willing to use it. Even better if the client can attach a check or payment with the LOI. Have the LOI identify the buyer. I don't mean the company name but : 1. the buyer persona 2. The user of the software 3. The decision maker 4. The guy whose budget it goes from Sent from my iPhone

Arun Joshi President / CEO Visulon Inc.

October 25th, 2014

Hi Corey,

First and foremost I would be curious to know if giving away beta version of your software would be a well thought out strategy for enterprise SaaS product. May be that is what makes sense for you and your team.

We designed our SaaS platform and started sales efforts right after it was tested thoroughly. We experimented with pricing and other variables. Our goal is to get first ten accounts and learn a lot during the process. Customer feedback is 'real' when you give them fully released product ( well, there is nothing like 'complete, fully released SaaS product', it keeps getting better in your software 'build management' process..)

-Arun

Puneet Jindal CoFounder and CEO @Labellerr by TensorMatics, Co-Founder and CEO @student360 by Eduwaive Foundation

November 9th, 2020

@corey: Did you get any link for LOI?

Garett Fitzpatrick CXO, Founder, Investor, Customer Experience Solution Architect, Sales Operational Guru

November 12th, 2020

Hi Corey,

I'm sorry to say, I don't see this practice aligning with industry best practices. 10 years ago, when the ERP lifecycle was 10 or so years, MAYBE. Back when we had waterfall projects that lasted 2 years to implement, this could be a thing. Now days clients typically issue an RFI/RFP and invite companies to submit proposals. Those RFIs are requirement based, meaning the company lists out a bunch of pain points asking for the IT industry to provide solutions. In some ways, it means they aren't happy with their current provider.

Perhaps your vertical is isolated and still has a really long lifecycle? Does your product fall into any of the magic quadrant data sets?

If I was your investor, I would much prefer seeing revenue. What's stopping you from engaging with a client now? You have a technical team, right? If you have and ERP, you must have a vertical specialization. Leverage your industry knowledge and go get a customer. You only have to make it through the demo! You can be honest and upfront disclosing to clients that your product (like all software) is ongoing development. Microsoft has now rolling updates on D365. from every few years, to a few times a year, to now constantly.

Follow industry best practices. They are there to protect you. If you showed me something like that and I was expecting to see a sales report, I would have some follow up questions.

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