Software as a service (SaaS) is a method of delivering software applications over the internet, making it unnecessary for customers to buy, install, maintain, and upgrade software, a complex and capital-intensive process. The web-based software resides on the SaaS company’s servers, and the service provider manages every aspect of the application, including access, availability, security, and performance. According to McKinsey, the USD 3 trillion SaaS market could grow to USD 10 trillion by 2030. With a growth potential of this magnitude, it is hardly surprising that innumerable startups have made SaaS their niche in the software space. Some handy tips for SaaS startups to accelerate their growth:
Provide a Solution, Not a Product
Since there are many software applications, SaaS companies can pick and choose their target audience and what they will deliver. However, despite the immense latitude these companies enjoy, many SaaS startups fail soon because instead of selling a solution, they focus on providing services. To achieve success, you must focus on identifying the problems and also pain points of customers, understand why they occur, and deliver solutions to eliminate them and make their customers more productive. If you are selling services only, you cannot differentiate yourself from your competitors.
Believe in Your Services and Start Charging
SaaS companies tend to worry more about getting traction with customers and expanding their customer base than trying to increase their revenues. Most of the time saas startups think that the product development has not reached the state where customers would be ready to pay. Moreover they prefer to develop a large base of free customers in the hope one day some will consider paying for the services. However, you must start charging for your services, if only to test customer acceptance, instead of investing time and money waiting for a grand launch sometime later. Starting to charge fees is the best way of finding out if customers will pay and how much they will pay for your services.
Target Customers Well
When time, effort, and money do not show results, the problem may not be with your products but the targeting. Not getting your target audience right is a waste of resources. To identify your target audience, you must find out their demographics, concerns, interests, usage, budgets, and more. You must research the competition to find out who they are and how they are targeting so you can either focus on the same niche or address another one. Use analytics to find out what visitors view on your site, the content they spend maximum time on, etc., to find what they are interested in and build a customer persona. Attending events, seminars, and symposia and conducting surveys and polls are other handy ways of gathering information to achieve more focused targeting.
Your pricing model is what will drive company revenues. You should have an uncomplicated, transparent, and easy-to-scale pricing model that customers can quickly understand and select. Also, You can choose per-use or per-user pricing models and offer monthly, quarterly, and annual subscription plans. You will need to experiment with the pricing to find out the sweet spot that customers are happy with and you can use to drive growth.