It is no surprise that the SaaS industry size is worth billions of dollars now. And as it stands, it’s only going to get bigger! And although there is no better time than now to be in the software industry, we all know that building a SaaS business is not an easy feat. With more opportunities comes more competition, so if you want to lead the pack, here are 4 valuable strategies you should know.
The SaaS market is estimated to be over $110 billion and is projected to reach $195.8 billion by 2023.– Statista
Know the Right Problem You Want to Solve
Whether you are just starting out or branching into new categories for your SaaS company, it is always an important strategy-building task to take a step back and evaluate the basic questions: What am I trying to solve? What value am I bringing to my users? And when it comes to software services, there is certainly no shortage of concepts, designs, or solutions to consider.
But let’s be honest, not all your ideas or designs will be good ones and you are probably not the first person to have come up with this solution. A good place to find your niche is choosing the common problem that is less addressed efficiently. Chances are that it will impact buyer decision-making and place you above the competition.
Perfect Your Subscription Pricing Strategy
There is no one-size-fits-all solution to pricing strategies, but if it’s priced too high, it won’t sell. You may have a great product but if you do not take into consideration the market, your costs, and the perceived value of your service or product, you will most likely miss choosing the ideal price and negatively impact your bottom line.
A big part of a successful pricing strategy is making sure your sales team knows and understands the pulse of the market, and communicates that to every level of your company. Together with recognizing external factors, it is also very important to notice and calculate internal metrics. Some of the important sales metrics you should be tracking continuously include:
- Customer churn rate
- Revenue churn (MRR/ARR)
- Customer lifetime value
- Customer acquisition cost
- Activation rate
- Conversion rates
- Growth rates and margins
Once you have the right historical data, you can confidently start experimenting with different pricing packages to see which one hits the sweet spot. Let’s be very clear here, your end goal is to optimize the price of your product or service; not just to increase the price to grow your revenue.
As Groundswell, our experience with technology organizations allows us to clearly define common subscription-based scenarios such as renewals, upsells, and amendments to standardize and recognize revenue. Our team also developed a Forecasting App that helps to better understand patterns of adoption and benchmark across their customer base. Read more about pricing strategy and forecasting best practices with Salesforce in our Tech Playbook.
Sharpen Your SaaS Marketing Strategy
Even if you have an excellent SaaS product to offer, you can’t expect customers to know that it exists. To ensure you attract the right customers, you have to set up a strong system to capture customer data and track the customer journey to provide the right information for marketing campaign success. This also ensures that you can justify the money invested and get continued ROI.
Another area that your marketing strategy will impact is customer onboarding. If your customer doesn’t know or understand how to use your product or service, then there’s a good chance they won’t recognize it as a valuable resource and will not take advantage of its full potential; or recommend it to their friends.
An important aspect of utilizing your marketing strategy to its fullest potential is to validate your service or product concept before you build and launch it. One way is to use a landing page platform to A/B test what a small sample size of your ideal customer is willing to pay and how they may want to use it. You can also go a little further and actually show your prototype and survey 10 to 20 people in a controlled environment. And another option to test your options would be to email a larger size group and verify that the problem you are trying to solve is the right one.
Platforms like Salesforce Marketing Cloud, make sure every step of the adoption process is designed to be easy to use. From the first step of subscribing to the product to continued renewals. Learn more about how Shaklee improved their marketing campaigns to increase user adoption and engagement.
Get Expert Advice to Automate Your SaaS Business
Especially when it comes to SaaS, there’s no room for error! Every aspect of your offering needs to be carefully planned out for success, which does not happen on a small budget or with a minimal assurance of the quality and sustainability of your projects. The most crucial aspect of scaling your business is time, and how you manage your time and effort between tasks to provide exceptional services to keep your customers always happy.
Take time to research all department tasks that can be automated and help your team to focus on much more complicated matters. Some tools that do make a significant difference include sales forecasting tools, email marketing automation tools, and customer support/help desk tools.
Salesforce partners like Groundswell, have specific industry expertise with strong relationships within the technology industry. Our team’s central focus is to provide both industry and product expertise that is cemented in clear points-of-view, optionality for implementation decisions, and ultimately, quick time to market that enables innovation.
There is no one size fits all industry hacks to help scale your SaaS business. Your strategies will evolve and scale over time. At Groundswell, we are enablers of success and a team that will challenge your thinking to ensure the right solution for your business is developed. Contact us today to find out how we can work together: email@example.com.