Demos and free trials seem to be the only ways SaaS vendors can think about selling.

Funny thing: the same issues that plagued the IT field ten years ago (!) continue today.

The answer is in education. I don't mean teaching the prospect for free; I mean as the seller educating yourself on the true state of the target market so you can begin the sales conversation on ground they already believe in...and using education as a tool to bring the prospect around to your point of view.

I've made a couple videos and written a couple blog posts on the topic. Here they are:

Why Demos Fail to Sell:
http://www.youtube.com/watch?v=pKK5Anu9keM

Blog post: http://www.salestactics.org/why-demos-fail-to-sell/

SaaS Sales Problems:
http://www.youtube.com/watch?v=nDZQ_8Srt7g

Blog post: http://www.salestactics.org/how-saas-vendors-get-it-wrong/

If you want to develop an effective sales funnel for your SaaS, book a call and let's get started. Given the jump in expertise required, it's probably not something you're going to figure out correctly on your own in a short time, and I can save you that time--and those lost sales.