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Tag: SaaS Customers

  • A Non-technical Guide for Investing in a SaaS Startup

    Investing in a software-as-a-service (SaaS) startup can be a lucrative opportunity for those looking to diversify their portfolio and support innovative companies. SaaS businesses provide subscription-based access to software over the internet, rather than traditional one-time purchases or licensing. This business model allows for recurring revenue streams and the potential for long-term growth. However, it’s important to thoroughly research and evaluate the potential risks and rewards before making any investment decisions.

    Investing in a SaaS startup can be risky, but it can also be very rewarding. By choosing a strong, well-established company, you can set yourself up for long-term success and potentially earn a significant return on your investment.

    In this article, we will explore some key considerations for investing in a SaaS startup, including the market landscape, financial performance, and management team. This article is exactly about that. We will go top to bottom about everything that one needs to know before investing in a SaaS startup.

    What Is a SaaS Startup?
    Things to Know Before Investing in SaaS
    How SaaS Is Different From Other Startups
    The Business Model of a SaaS Startup
    Growth and Potential
    Best Practices Before Investing

    What Is a SaaS Startup?

    A SaaS (Software as a Service) startup is a company that offers a software application on a subscription basis. Instead of purchasing the software outright and installing it on their own computers or servers, customers pay a recurring fee to access the software over the internet. This business model allows customers to use the software on a pay-as-you-go basis, without having to make a large upfront investment in hardware or IT infrastructure. SaaS companies typically host the software on their own servers and provide access to it through a web browser or other means. Some examples of SaaS startups include cloud-based productivity tools, customer relationship management platforms, and e-commerce platforms.

    Things to Know Before Investing in SaaS

    If you are considering investing in a SaaS (Software as a Service) startup, it’s important to understand some key aspects of the business model and the industry. Here are some things to consider

    Business model: SaaS companies typically sell subscriptions to their software, rather than selling it as a one-time purchase. This means that the company’s revenue is generated from ongoing customer payments, rather than from upfront sales.

    Target market: It’s important to understand who the company’s target market is and whether there is a large enough demand for the product.

    Competition: It’s also important to understand the competitive landscape and how the company’s product compares to its competitors.

    Growth Potential: Look for signs that the company is growing quickly and sustainably, such as a growing customer base and increasing revenue.

    Team: Consider the quality and experience of the company’s management team and its ability to execute its plans.

    Financials: Review the company’s financial statements to get a sense of its financial health and future potential.

    Risk: As with any investment, it’s important to consider the potential risks involved. These may include technological risks, competitive risks, and regulatory risks, among others.

    It’s also a good idea to seek the advice of a financial advisor or professional before making any investment decisions.

    How SaaS Is Different From Other Startups

    Even though these sorts of startups are also startups and they too become unicorns, there are some inherited differences between these. There are several factors that make SaaS startups different from regular startups

    Business Model

    SaaS startups typically operate on a subscription-based business model, where customers pay a recurring fee to access the product or service. This is different from traditional startups, which may sell products or services on a one-time basis.

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    Customer Acquisition

    SaaS startups often rely on digital marketing and sales tactics to acquire customers, while traditional startups may rely more on traditional marketing and sales methods.

    Customer Retention

    SaaS startups typically have a higher customer retention rate due to the recurring nature of their subscription model. Traditional startups may have more fluctuation in customer retention due to one-time purchases.

    Revenue streams

    SaaS startups often have steadier revenue streams due to their recurring subscription model, while traditional startups may have more unpredictable revenue streams.

    Scalability

    SaaS startups are often more scalable than traditional startups due to their ability to easily add new customers through their subscription model.

    Overall, SaaS startups differ from traditional startups in their business model, customer acquisition and retention tactics, revenue streams, and scalability.

    The Business Model of a SaaS Startup

    A business model is a way a company generates revenue and profits by selling products or services to its customers. It outlines the different elements of the company’s operations, including its target market, marketing and sales strategies, and financial projections. Business models can vary widely depending on the type of industry and the specific needs of the company. Some common business models include subscription-based models, pay-per-use models, and freemium models.
    There are several factors that you can consider when evaluating the business model of a SaaS (Software as a Service) startup

    Revenue Streams

    A SaaS startup typically generates revenue through subscription-based pricing models, where customers pay a recurring fee to access the software. Look for a startup with multiple revenue streams, such as upsells and cross-sells, as this can increase the overall stability of the business.

    Customer acquisition costs

    It is important to consider the costs associated with acquiring new customers, as these costs can impact the profitability of the business. Look for a startup with a high lifetime value (LTV) to customer acquisition cost (CAC) ratio, as this indicates that the company is generating a high return on investment for each customer it acquires.

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    Churn rate

    The churn rate is the percentage of customers who cancel their subscriptions over a given period of time. A high churn rate can be a red flag, as it indicates that the startup is having difficulty retaining customers.

    Scalability

    Look for a SaaS startup with a scalable business model, meaning that the company can easily expand its customer base and increase revenue without incurring significant additional costs.

    Market demand

    Consider the size and growth potential of the market in which the startup operates. A startup with a product or service that meets strong demand in a growing market is more likely to be successful.

    Competitors

    It is also important to consider the competitive landscape in which the startup operates. A startup with a unique value proposition and a competitive advantage over its competitors is more likely to succeed.

    Growth and Potential

    The growth and potential of a SaaS startup are determined by a variety of factors, including market demand, competitive advantage, customer acquisition and retention, financial stability, and scalability. Companies that are able to effectively address these factors are more likely to experience growth and success. For example, a SaaS startup with a unique product that addresses a specific need in the market and has a strong customer acquisition and retention strategy is more likely to experience growth than a company with a generic product and poor customer service. Similarly, a SaaS startup with a strong financial foundation and the ability to scale its operations is more likely to experience growth than a company with weak financials and limited scalability. Overall, the growth potential of a SaaS startup is largely dependent on its ability to effectively address the key factors that drive growth in the industry.

    There are several factors that can be considered when evaluating the growth potential of a SaaS Startup

    Market Size

    A large and growing market can provide a strong foundation for the company’s growth. Look for a market that is large enough to sustain the company’s growth over the long term.

    Product-market Fit

    Does the company’s product or service solve a real problem for its target market? A product that meets a strong customer need is more likely to experience growth.

    Competitors

    Analyse the competitive landscape to understand the company’s position in the market. A company with a unique value proposition and minimal competition is more likely to experience growth.

    Pricing

    Consider the company’s pricing strategy and whether it is sustainable over the long term. A company that charges a higher price for its product or service may have more room for growth than one that charges a lower price.

    Customer Acquisition Cost

    Look at how much it costs the company to acquire new customers. A company with a low customer acquisition cost is more likely to be able to scale its business.

    Customer Retention

    High customer retention rates can be a sign of a strong product or service. A company with a high retention rate is more likely to experience growth.

    Revenue Growth

    Look at the company’s past revenue growth to get a sense of its potential for future growth. A company with a history of strong revenue growth is more likely to continue growing in the future.

    Overall, it is important to consider a variety of factors when evaluating the growth potential of a SaaS startup.

    Best Practices Before Investing

    While the best practices that you can follow before choosing a SaaS startup to invest in can be a lot easier than it looks. As a rule of thumb, you can look for these check pointers in any Startup that uses software as a service.

    Financial Stability: Look for a company with a strong financial track record, including steady revenue growth and profitability.

    Customer Base: Look for a company with a diverse and growing customer base, as this can indicate a strong demand for the company’s products or services.

    Product Differentiation: Consider whether the company’s products or services stand out from the competition, as this can be a key factor in attracting and retaining customers.

    Management Team: Look for a company with a strong and experienced management team that is capable of executing the company’s business plan and driving growth.

    Scalability: Consider whether the company’s products or services can be easily scaled to meet the needs of a growing customer base.

    Market Opportunity: Consider whether the company operates in a growing market, as this can provide a strong foundation for long-term growth.

    Intellectual Property: Look for a company that has strong intellectual property protections, such as patents or trademarks, to help protect its products or services from competitors.

    Exit Strategy: Consider whether the company has a clear exit strategy, such as an IPO or acquisition, as this can help you maximize your investment returns.

    Conclusion

    Investing in a SaaS startup can be a lucrative opportunity, but it also carries its own set of risks. It is important to thoroughly research the company and its business model before committing any funds. Look for a company with a clear mission and vision, a solid customer base, and a track record of success. Additionally, be sure to consider the financial stability of the company and its ability to generate steady revenue streams.

    Just remember to do your due diligence and weigh the pros and cons before committing any funds. With the right approach, investing in a SaaS startup can be a smart move that pays off in the long run.

    FAQ

    How do I fund a SaaS startup?

    The four types of SaaS funding are as follows

    • Venture capital
    • Angel investment
    • Incubators/Accelerator
    • Revenue-based financing & MRR Lines

    Why SaaS is a good investment?

    SaaS software lives online and there is no physical product to manage, ship, store, and manufacture. That significantly reduces the time, cost, and manpower required. That allows SaaS businesses to launch with less capital and increases their profit margins.

    Why is SaaS so profitable?

    SaaS companies tend to have low churn and high renewal rates, resulting in high customer lifetime values with a good sales team selling a product that works should be able to generate customer retention rates above 90% and revenue retention at or above 100%.

    What percentage of SaaS startups succeed?

    Over 90% of SaaS startups fail, only 35% get past the 10-year mark, and only 40% of these ever become profitable. To avoid product failure a good product positioning helps achieve customer fit and reduces customer dissatisfaction.

  • What Does an Investor Look Out for in a SaaS Product?

    With dramatic tailwinds and accelerated digital transformation, the SaaS market has grown exponentially in the last decade. The industry has managed to amass a revenue of $104 billion in 2020. By 2022, the market is expected to reach $140 billion, according to Gartner.

    Whether you’ve created a SaaS product to solve a problem or make extra income, it is a valuable asset. However, when it comes to scaling the product, you need investment. But what’s the final checkpoint that the investor looks out for in a SaaS product? It’s vital to understand how valuations and metrics work in businesses.

    Investors think a lot about characteristics that are representative of an early-stage startup. Before they invest in your company, they want to see specific metrics. And so, to help you prepare these, we’ve compiled an overview of the most crucial SaaS metrics. If you adhere to these, your valuation is bound to improve.

    1. Clear Ideal Customer Profile (ICP)
    2. AI-powered SaaS Applications
    3. Product-led Growth Strategies
    4. MRR
    5. Customer Acquisition Cost (CAC)
    6. Churn Rate
    7. EBITDA

    1. Clear Ideal Customer Profile (ICP)

    When it comes to product building and efficient selling, it’s fundamental to know your target audience. Companies that have an apparent understanding of their target customers have improved chances of success.

    Investors look for a well-defined ICP before investing in the business. Therefore, entrepreneurs should establish their ICP through apparent insights and extensive “Voice of Customer” Research. It’s also essential to build the customer base from a combination of past experiences.

    Some of the most substantial benefits of a clear ICP are:

    • An efficiently targeted go-to-market (GTM).
    • Highly focused product roadmap.
    • Shorter sales cycles and value propositions.

    2. AI-powered SaaS Applications

    Artificial intelligence plays a significant role in advancing modern software to automate work for consumers. At its core, AI-powered SaaS applications can be trained on increasingly larger datasets and be further augmented with customer-specific data. Thus, allowing users to automate tasks and make better-informed business decisions. Consequently, it will propose a unique standpoint to the investors.

    Some SaaS companies developing AI-powered applications comprise:

    • Yalochat – It is a conversational AI-powered platform that allows businesses to efficiently communicate with customers.
    • Zeni – It is an AI application that provides bookkeeping, financial reporting, and invoicing services.

    3. Product-led Growth Strategies

    The product-led growth (PLG) strategy is crucial when it comes to building SaaS companies. It allows the consumers to test the product for themselves. Without the restraint of features, users can effortlessly explore the product and infer its value.

    This not only helps businesses develop consumer-like products but also furnishes lucrative returns. The PLG strategy has become business-critical across all enterprises functioning. Companies adhering to product-led growth have increased chances of being approved by investors.

    The PLG strategy has capitalised on a few trends, including:

    • Reduced sales cycle and buying decisions.
    • Fast employment (due to the cloud-based feature).
    • Easier purchasing (swipe a card and go).
    • Intuitive onboarding and adoption.

    4. MRR

    Monthly Recurring Revenue or MRR is a leading indicator of revenue growth. Hence, it’s a well-received way to appraise SaaS businesses. Investors are more likely to consider the MRR rather than the ARR (Annual Recurring Revenue). Simply because the ARR doesn’t furnish much proof of churn.

    Big SaaS companies with high MRR can raise a sizable amount of money during seed funding rounds. If small businesses or brands are experiencing rapid growth and meet the criteria of investment, they could be valued using MRR. Below mentioned are the criteria:

    • More than $2M ARR
    • 50% growth year after year
    • Founder involvement isn’t important for the business’s survival.

    5. Customer Acquisition Cost (CAC)

    Customer acquisition cost or CAC is a significant metric to assess marketing and sales cost. It helps measure the effectiveness of your SaaS business’ customer acquisition strategy.

    Furthermore, it analyses the expense incurred (on average) to attain new consumers. CAC also represents the return on investments in sales and marketing. Thus, it is a meaningful metric for potential investors.

    An efficient customer acquisition cost allows the investors to gauge the scalability of your SaaS product or business.

    6. Churn Rate

    The churn rate is the long-term trajectory of any SaaS business. A low churn rate improves the recurring revenue, and growth rate – and curtails the risk of long-term value loss.

    Smaller companies have a higher churn rate because of less sophisticated needs and low demands. Investors would not invest in a SaaS company that experiences a high churn rate. That’s because it signifies you’re losing potential customers – and your company’s retention rate isn’t up to the mark. Hence, the churn rate is a fundamental metric that SaaS business owners need to cater to.

    Ideally, lost customers equal lost revenue. Besides, it’s far more expensive to attain new consumers than it is to retain the old ones. Therefore, businesses should focus on customer retention to improve scalability and performance.

    7. EBITDA

    EBITDA stands for earnings before interests, taxes, depreciation, and amortisation. SaaS businesses that make annual revenue of $5 million will likely use EBITDA.

    It is a substantial measure of core profit trends. This metric furnishes an accurate comparison between companies with different capital investments, tax profiles, and debt.

    Besides, it eliminates extraneous factors, boosting returns. This allows a fleshed-out infrastructure and accelerated growth in your SaaS business. Thus, making it investable.

    Conclusion

    The COVID-19 pandemic has bestowed heavy growth to the SaaS industry. With companies compelled to take their business operations online, the SaaS market has grown fierce – yet competitive.

    Seeking venture capital funding is of paramount importance in any SaaS business. Investors would only plough their money into your business when you can convince them of your company’s commercial viability and growth potential.

    To fight competition, survive, and thrive, you need to stand out from the rest. Thus, there are a few business metrics that you need to take care of. Essential metrics, such as the CAC, MRR, and Churn rate define your company’s scalability and future. Once you cater to these metrics, your SaaS business is ready to successfully attract investment.

    FAQs

    What do investors look for in a SaaS company?

    Low churn rate, Product-led growth, AI-powered SaaS applications, and EBIDTA.

    What is one of the most important metrics in a SaaS model?

    Customer lifetime value is one of the most important metrics in a SaaS model.

    What are SaaS metrics?

    SaaS metrics are different KPIs that companies measure to track their success and customer growth.

  • How to Improve Customer Experience for SaaS Businesses? (Best Strategies)

    Interaction between a customer and a brand at different stages of the customer’s journey impacts the customer’s perception of the product and services. Positive interaction strengthens the connection and enriches the customer’s experience (CX) throughout all aspects of the product consumption journey, including browsing websites, enquiring about products, purchasing products, post-purchase communications, etc.  Hassle-free and convenient business transactions keep customers engaged and drive their loyalty to a brand.

    The personalized experience of the product enhances the credibility of a brand and brings out the brand from a shop for a shop. Let us see how SaaS companies can enhance customer’s experience and drive revenue growth:

    What is Customer Experience?
    Why do SaaS companies need to Improve Customer Experience?
    How to Improve Customer experience strategy for SaaS Business?

    What is Customer Experience?

    SaaS products and services work on subscription-based pricing and that can be altered anytime with the myriad number of SaaS products available in the digital market. Customer acquisition and customer engagement are their prime concerns and to get an edge in the market, they are dependent on customers’ responses about the SaaS products.

    Effective customer experience strategy is well-crafted planning of business goals and organizing the itinerary to reach that goal. Online customers relationship play a crucial role in keeping customers engaged with the SaaS product and a brand, in a highly competitive SaaS market.

    Advanced UX, easy interface, real-time chatbot conversations, engaging emails, customer feedback, review, YouTube videos, etc are various means to increase interaction between the brand and the customers. It also helps businesses to get data insights about the sensory and behavioural responses of different types of customers to further improve communication with the targeted customers.

    Why do SaaS companies need to Improve Customer Experience?

    SaaS businesses are undergoing many transformation phases due to the increased use of cloud computing, AI, advanced data management tools, remote working, agile infrastructure, on-demand resource availability, and many more local/global reasons. SaaS businesses run on subscription services so customer satisfaction at every consumption touchpoint delivers a stand-out result and ensures product-led growth.

    Maintaining customer retention for a long time is extra pressure apart from increasing new customer in-flow for a brand.  The end user’s experience is essential to maintaining a long-term relationship and improving business output.

    Why Should You Improve Customer Experience
    Why Should You Improve Customer Experience

    How to Improve Customer experience strategy for SaaS Business?

    Improve Customer Onboarding Experience

    User onboarding is the beginning stage of a customer’s interaction with a SaaS product. The customers should be well acquainted with the accessibility of website navigations, image representation, easy interface, purchasing convenience, and smooth check-out functions. Easy onboarding can include:

    • Free Sign-up and product trials to gain audiences’ trust for paving the way for long-term relationships.
    • Complete walkthrough, knowledge base, support, FAQs, and guidelines to provide comprehensive knowledge about the product and simplify the process.
    • Consistent customer support through support and knowledge base articles to help them to reach easy and quick solutions. Quick resolution of Help Desk queries enhances customer experiences and builds the product’s credibility.

    Increase UX Investment

    Your website is the face of your business and the main communication channel for showcasing your product and crafting your digital customer journey. Slow-running websites, abrupt navigation, poor image quality, and complicated language are all major pain points for customers and cause frustrations at every stage of the customer’s journey. Even a few seconds wait period for a website to upload causes 70% give up of visitors and the business loses its brand loyalty too.

    Poor digital customer experience can lead you to lose traffic to competitors and it can ultimately impact the company’s growth and revenue. 85% of buyers do online shopping because of the great customer experience they get through product pages.

    Focus on Customer Feedback and Reviews

    Unbiased and honest posts have more capability to drive traffic and then convert it into potential buyers. People adopt which is devoid of the banner and listen more to genuine comments. Customers’ feedback, reviews, surveys, and questionnaire are considered more trustworthy because they are coming directly from customers’ mouths.  

    According to a market survey, 85% of people trust customer reviews before online purchasing. This way a brand engages customers and promotes its product more efficiently and authentically. Approximately 75% of brands agree that their customers are their brand promoters.

    Customers’ feedbacks and ratings identify valuable insights about product quality, shortcomings, encountered issues, expectations, satisfaction, recommendations, and customers’ perception of the product.

    In a fiercely competitive market of SaaS businesses, lead generation and customer acquisition are substantial parts of product growth. The constant customer engagement leads to secure and long-term relationships, which eventually turned into customer loyalty.

    Get the opinion of customers through feedback, survey forms, emails, chats, and social media, and ask them to respond quickly. Positive feedbacks and recommendations promote your product through word-of-mouth marketing free of cost.

    Average people are more trustworthy because they are promoting your brand for the value they got in return and not for the marketing.

    Cross-Departmental Collaboration

    Effective customer experience strategy is the well-crafted planning of business goals and organizing the itinerary to reach that goal. Your business goal and marketing goal should be aligned and the marketing goal should work as a complementary to achieve the business goal. Less coordination between different teams hinders smooth business functioning and frustrates your customers due to time lagging in response to the request.

    Customer experience should be intelligent, personalized, relevant, and insightful across customers, marketing, communication, sales, and service teams. Develop a smooth business transition to bridge the gaps between customers and multiple departments to create better customer experiences.

    Track and Measure Customer’s Experiences

    Subscription-based product is highly volatile in nature and can be replaced anytime with alternates. Current customer trends, purchasing behaviours, expectations, and demands, are needed to be tracked and examined to focus on target customers.

    Map your customers’ journey; research customers’ profiles, and collect data from social media about their choices, interests, gender, age group, and preferences to track the latest trends. Identify whom you are talking with? Create a persona of your audience and then target them selectively.

    Introduce chatbots to get personalized with customers and to address accurately what they are looking for. Determine the common stage where you can connect with your customers. Twitter, LinkedIn, and Pinterest might be the best channels for connecting with target audiences for SaaS-based products.

    Personalized email marketing collects insights such as niche interest, buying intent, and behavioural patterns and helps in anticipating the future needs of the customers.

    Some SaaS companies personalized their websites for new or existing customers. Big data analytics and machine learning bring out the customers’ insights and their predictive behaviours which help to segment customers based on their preferences and needs. Delivering individualized content and targeted emails strengthens the relationship between businesses and consumers. It enriches customer experiences and increases brand credibility in a volatile SaaS market.

    Make a Mobile-friendly Interface

    Make your interface mobile-friendly as 90 out of 100 customers access web pages, social media, and emails on mobile. Customers can get weekend offers, festive offers, and timely coupon notifications anytime, anywhere with the portable mobile device.

    According to a recent survey, 82% of users are primarily engaged with smartphones, while 63% of users use computers. Effective customer experience is to meet customers where they are and mobile device is accessible almost everywhere.

    Incorporating the Latest Tools and Technologies

    Using the right tools and technologies is an integral part of an enhanced digital customer experience. Live chat, FAQ page, Chatbot, and Helpdesk enable customer support to automate resolution quickly and enhance customer experience. Big Data analytics, AI, and Machine Learning techniques collect valuable insights and create a customer-centric user experience for individual users.

    Promote Omni Channel marketing

    With constantly changing consumer habits, it is crucial for the business to connect with customers through multiple channels. However, maintaining consistency all along and seamless communication at various media channels (omnichannel support) is quite a tedious job.

    70% of consumers expect the same representative or same product copy in every channel. A mobile app, social media, chat, email, and web page are all part of omnichannel marketing. Create an omnichannel support strategy by optimizing user engagement across web, mobile, social media, and live chats.

    How to Reduce Customer Churn Rate: 5 Proven Strategies
    A churn is a user or revenue loss in a given period. If you don’t want to lose your customers, follow these strategies to reduce the churn rate.
    StartupTalkySunita Singh

    Conclusion

    A perfect customer-centric strategy comprises a well-thought-out plan to increase positive customer experiences at all stages of the customer’s journey and measures the customer’s perception of the company, product, and brand.

    To create an excellent SaaS customer experience, nurture your relationship with your customers by understanding their behaviours and expectation and provide a comprehensive customer experience platform from onboarding to feedback collection.

    An average user can be turned into a brand ambassador from his role as a fan or a contributor.

    FAQs

    What is the SaaS customer experience?

    SaaS customer experience is keeping your customer engaged with your SaaS product.

    What are customer experience strategies?

    Customer experience strategies are a strategy that you plan to provide the customer throughout the customer journey by providing the best experience at every stage.

  • 5 Biggest Sales Challenges in Selling SaaS and How to Overcome Them

    Software as a service, commonly abbreviated as SaaS, is a type of software that is hosted by a software company or single provider. It permits its customers to connect to and use apps based on the exclusive cloud-based feature over the internet.

    The customer need not need to worry about the storage. The software is backed up by the product engineers of the providers. The customer success team looks after the management of the software.

    SaaS sales can be understood as the process of selling web-based software that is accessible by the customers through an online portal. SaaS sales products help solve business-related issues.

    SaaS sales are regulated by the following sales representatives- Sales Development Representatives (SDRs) and Business Development Managers (BDMs). The former focuses on the outbound sales and qualifying leads, and the latter works on conducting product demos and closing deals respectively. Here is a list of a few most common challenges faced by SaaS founders that they face when selling SaaS, along with suggestions on how to overcome them.

    1. Qualified and Unqualified Leads
    2. Stressful SaaS Sales Cycle
    3. Choosing the Right SaaS Sales Model
    4. Conversion from Freemium to Premium
    5. Too Many Competitors

    Importance of SaaS Sales Strategy

    Like all B2B sales, the prime objective of the SaaS sales team is to generate qualified leads and revenue for the company.

    Planning gives an idea about what we are up to and paves the direction for us. Therefore, a strategized sales technique must be adopted. The decision of the SaaS sales strategy depends on the company’s SaaS adoption and development.

    The SaaS sales strategy includes various sales techniques to fulfil two-fold objectives i.e., upselling clients and closing deals.

    A SaaS Sales strategy plays a vital role in the success of the company as it focuses on the growth of the company and its position in the market, in the longer run. The SaaS sales strategy most commonly uses the subscription-based pricing model. While creating the strategy the team must focus on the following points:

    • Lead generation to turn interested into sales.
    • Focus on the target group of the market and convert prospects into consumers by introducing them to the company and its offerings.
    • The final stage of the transaction includes the agreements signed between the company and the customers thereby, resulting in sales.

    This simple 3-step transaction has to face a lot during the implementation phase.

    1. Qualified and Unqualified Leads

    Lead generation
    Lead Generation

    Lead generation gives happiness. But the same end up in tears if it does not give you a sale in return. Therefore, it is necessary to make sure that you do not waste time on unqualified leads.

    Categorization of your leads into qualified and unqualified must be followed after lead generation as not all leads require an equal amount of attention. Contacting all leads will result in a waste of time and leave you exhausted.

    Here, the team needs to come up with a strategy so that more time and focus can be given to the most important leads. This distinction could be made by a little survey through an interesting and engaging questionnaire in a Google form or measuring their quality through a lead scoring formula.

    Preparing a lead scoring model that fits your business model is a good idea. It helps to focus and save time on the most important inbound leads. It can also prepare you for future dealings with bigger opportunities yet to come in the future. The lead scoring formula gives amazing results when comes to filtering the potential customers from the free trial users who are never planning to convert.

    2. Stressful SaaS Sales Cycle

    SaaS sales cycle
    SaaS Sales Cycle

    SaaS sales cycles vary from product to product. Each sales cycle depends on various factors such as the target market, the pricing model, or even the target audience.

    It might involve dealing with unrealistic expectations at times, which creates pressure on the sales team. The only solution to this problem is- Benchmarking. It helps you get started as you have a goal set to achieve. Once the benchmark is reached, it’s no more an issue. The next step is to align the results with the expectations.

    The team should set a benchmark to predict the average sales cycle based on industry, pricing, and customers’ needs.

    3. Choosing the Right SaaS Sales Model

    Sales models play a vital role in the success journey. However, picking one isn’t as simple as it may seem. Your decision directly impacts the growth and revenue. Therefore, all the SaaS sales model options available must be reviewed thoroughly. Further, there should be a test to find the most suitable one in a limited time.

    Finally, it can be rolled out if successful. Otherwise, there should be a re-test if your sales model lacks at any point for your SaaS product.

    4. Conversion from Freemium to Premium

    This one can be regarded as the biggest challenge for every SaaS business that wants to grow.

    Many of the generated leads are of the view that they would enjoy the free trial and switch to the other SaaS product’s free trial once the previous one gets over, without paying for the product in the end.

    It’s good to know that all the free trial users cannot be convinced to pay. But at the same time, you need to pay attention to those who are showing interest in your SaaS product in a different way as compared to others. They could be the ones who would like to continue.

    That is the point where you need to create an engagement and keep those warmest leads engaged throughout the trial period. You need to set up a strategy for how you approach them.

    You need to make them well versed with the benefits and further exclusive features eagerly waiting for your customers once their free trial ends. You should let them know how that your product is important to them as they are to you.

    You must try to find out more about them and try not to overwhelm them. Take them into trust with your pocket-friendly policy and other benefits by the time they get ready to retain with you.

    5. Too Many Options to Choose From

    Too Many Options
    Too Many Options

    New SaaS products pop up like crazy. Having competition is good – it increases the value of the market.

    When a customer is looking for that one product that satisfies exactly what he wants, he faces too many options. The customer gets confused about which SaaS product to choose from when several options are presented before them.

    To make your product the most obvious and preferable choice out of many alternatives, you must think like a customer. You need to figure out the ways to stand out in the heavily crowded market.

    You need to highlight the most exclusive feature that compels your customer to opt for your offering, over the other options available to them at the same time.

    While presenting your product, you need to explain its value, how is it different from the other offerings, and how it benefits your customer.

    Your website must be customer-friendly. It must be a little more informative than your competitors; fill it with the past experiences of you and your present and current customers. The content must be such that it helps customers make more informed decisions.

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    Conclusion

    Every SaaS business faces sales challenges. Sales is not an easy task, we need to earn it. There is a solution to all the challenges. Whether it’s the lack of time to qualify all the leads, a longer sales cycle, or dealing with a saturated market. The only thing we need to do is to figure out the right strategy and find the best possible solution to get the SaaS product in front of customers.

    FAQs

    What are sales biggest challenges in selling SaaS?

    The customer is faced with too many options, converting a customer from a free trial to a paid customer, choosing the right sales model, and qualified and unqualified leads.

    Is it hard to sell SaaS?

    Yes, selling a SaaS product is not easy as there are already other companies trying to convert customers into paid customers so it is important to make your product stand out and provide the best customer service.

    Why is SaaS so profitable?

    SaaS businesses are profitable as it is a recurring model where you are already earning revenue from recurring customers as well as from new customers.

  • Tips for Increasing Customer Retention Rate for SaaS

    Attracting and gaining customers and making them loyal to our brand so that they remain our customers- is the greatest goal of any business. Loyal customers are more profitable for business. They provide positive feedback and help in marketing your brand. Through loyal customers, businesses can gain new customers through referrals. So, increasing customer retention rate becomes fundamental for all businesses.

    Some of the entrepreneurs from SaaS industry shared their point of view on increasing customer retention rate. Read to get insights on increasing customer retention rate for saas startups.

    Shayak Mazumder, Co-founder, Eunimart

    Shayak Mazumder - Co-founder, Eunimart
    Shayak Mazumder – Co-founder, Eunimart

    The rate of  customer retention can be increased by:

    • Value-based pricing
    • Ensuring that customers unlock value the fastest

    Robin Das, CEO of Brandintelle

    Robin Das - CEO of Brandintelle
    Robin Das, CEO of Brandintelle

    Here are certain things you could do to increase customer retention rate-

    • Invest in research and build the product experience best suited for your target audience. If your audience is CXO’s or millennials, the entire experience from no of clicks to the colour themes matter more than you can imagine.
    • Hear from your customer. Build continuous feedback channels via chats, NPS surveys and user interviews and let your customers speak.
    • Be clear on your products core value proposition (CVP). If the CVP resonates with the customer then the likelihood of the retention is high.

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    Pramod Gummaraj, CEO, Aprecomm

    Pramod Gummaraj - CEO, Aprecomm
    Pramod Gummaraj – CEO, Aprecomm

    Each customer is unique. As Aprecomm is a B2B Player, Account based Strategy has produced incredibly superior results. Engage your Customer Support Team and Post Sales Teams to have regular interaction with the customers. Try to get some testimonials and feedback from the customers at regular intervals. This feedback should drive part of your product innovation and requirements. Aprecomm believes in delivering high quality products and have built a strong customer support team to enable high customer retention.

    Arjun Gupta, Founder, Courseplay

    Arjun Gupta - Founder, Courseplay
    Arjun Gupta – Founder, Courseplay

    Identify your core metric and protect it at all costs. As a B2B SaaS platform, the adoption rate, i.e. the percentage of the number of users online in the month against the total user count, is the single most important number for Courseplay and we are in a battle of life and death trying to get it to 100%. This metric is the single biggest factor to decide if the customer is going to come back or not. There will be other factors also, but since you asked for only one tip, if users are using the platform, the client will not be able to point any fingers at you. So find ways to get users to log in every day to keep reaping those sweet B2B SaaS bucks.

    Shreyan Gandhi – Director and Co-founder, Comket Solutions

    Shreyan Gandhi - Director and Co-founder, Comket Solutions
    Shreyan Gandhi – Director and Co-founder, Comket Solutions

    The most effective way that works for us is constant innovation, we’ve found that providing them with additional services results in a high retention rate, because then the consumer gets something they weren’t expecting and they also have something to look forward to. Along with our Tap1ce card we provide our consumers with sharable QR codes&Links that will enable them to share their profiles over long distances. They can also use our QR generator to generate QR codes for other links as well. And we’re going to keep adding features that will help us achieve a greater retention rate.

    Sarvagya Mishra – Co-founder & Director, SuperBot (PinnacleWorks)

    Sarvagya Mishra - Co-founder & Director, SuperBot (PinnacleWorks)
    Sarvagya Mishra – Co-founder & Director, SuperBot (PinnacleWorks)

    Customer retention relies on two very important factors which include:-

    • The quality of the product/service you are offering.
    • The relationship you maintain with them.

    In the absence of either of the two, customer retention becomes a big challenge. The product/service relies on the hand of the development team. But if the product is good and still the client isn’t retained then it could be due to a communication gap, which is a grave issue. In which case, it is imperative to have a strong communication channel in place that covers all their queries 24×7, collects their timely feedback and improves upon them. These two when sustained would help maintain a healthy relationship with the clients and boost the customer retention rate.

  • 8 Ways To Provide Better SaaS Customer Experience In 2022

    ‌‌‌‌‌‌Traditionally, software was distributed in different forms such as through CDs and DVDs. These practices are used to cost the user and distributor the additional responsibility of installation and maintenance of the software.

    The new alternative to this practice is to directly download a subscribed service by the means of the internet. They are termed SaaS. SaaS is a software distribution method that allows the end-users to directly purchase and download their needed software by the means of the internet.

    SaaS has gained much hype in the last few years. Many different startups and companies are investing in SaaS for vivid reasons. Some sell their products by SaaS, or others use SaaS for improving their business. Irrespective of the need, creating a SaaS is a hectic job.

    Imagine creating a SaaS product with such dedication. However, in the end, you are left with an almost negligible amount of customers acknowledging your efforts. The biggest fall for any product is through its customers. Customers are the biggest resources for success. Creating the best user experience for any SaaS developer is surely one of the major tasks.

    There are a few tricks and tips one can try to implement for a better SaaS user experience. Some of them are:

    Work Towards Creating a Good Impression

    We all have heard and believed the proverb “First impression is the last impression”. Creating better impactful landing pages can attract the attention of customers. On average, a visitor roughly spends about 10-20 sec on each webpage. These initial seconds are the time when a judgment is passed towards it. Creating an attractive and thoughtful landing page can surpass this period. Surpassing can increase the chance of converting a visitor into a customer.

    Begin With Ease

    The beginning is the first and most crucial step of any journey. Providing customers with an easy start can be more beneficial. There can be times when a SaaS product loses out their customers at the start only. This can be because of a complex starting procedure. It’s best to keep the start simple and clear.

    Starting with complex or time-consuming steps can irritate the customers. Even to sign in, it is best recommended to ask for needed information only at the start. As an alternative one can also add up the option of skipping unrequited formalities at the start.

    Be Clear About Your SaaS Product

    SaaS is a product brought by some amount. Before buying the product, no user has the proper acknowledgement of its services and tools. Not all products of the same field offer the same services. Customers buy the SaaS depending upon their requirements. Without actually having the idea of detailed work, a customer can’t make a call. Giving out clear information on the subscription given by the amount and the tools made available will be a plus point for both sides.

    Provide Clear Guidelines

    New users might get stuck in some steps. Keeping clear and detailed guidelines for customers can make them grateful for the team. Guidelines can be in the form of a small tour of the service, it can be a video explaining any error, a pdf full of basic working, or a graph showing the next steps. Guiding users makes them feel valued. This is a great tactic for avoiding any negative comments about service.

    Have an Open Communication System

    There can be times when clients might feel stuck. And no possible solution is made available to them through any guide. At such times, they might feel the need to have direct contact. For such occasions, keeping one or two methods as a part of communication is recommended. It can be in the form of an email or any other similar service.

    As much as it is important to provide clients with an immediate contacting option, it is also an essential part to answer them. For one to have better control over their customers, they should constantly reply and communicate with customers on all of their needed issues.

    Follow Real Advice

    Each service has a comment section below it. This is the place where one can easily track the accuracy of their made products. Be it grocery products or a SaaS product. It is best to keep track of given comments for a better understanding of the target audience and their needs. This can also avail the developers with the knowledge of their competitor’s strategies.

    Provide Improved Services Constantly

    The purchased users are the ones who can attract more customers by their comments and feedback. It is important to provide them with satisfactory service. New implementations are required to be made now and then.

    Developers should avail their SaaS users with new implementation as a part of the update. This update should also be explained and notified to the users by any possible means such as a message box or notification to their registered email.

    Be Grateful

    Showing gratitude to the SaaS users can alleviate their experience. Along with that, it can also make them a trusted client of your SaaS product. There are different options for making your users feel special.

    Giving out any free service as an addition or providing them with a free trial of service for a limited period. All these can create a good impact on clients.

    There are many practices one can implement for improving the user experience. The above-given examples are some of the most simple and needed implementations by markers.

    Conclusion

    SaaS (Software as a System) is the distribution of software by the means of the internet. Software as a service (SaaS) is one type of cloud computing along with Infrastructure as a service (IaaS) and Platform as a service (PaaS). SaaS works to deliver software to the client directly without the need for additional instalment and management of any software or hardware.

    SaaS startups and products are gaining much hype recently. There are many factors affecting the success rate of SaaS products. One of them is their user experience.

    FAQs

    How do you improve SaaS UX?

    Provide Clear Guidelines, Provide Improved Services Constantly, and Be Clear About Your SaaS Product.

    What are SaaS best practices?

    Provide a better user experience, focus on personalization and compatibility with all devices.

    What are the examples of SaaS?

    Some of the most common examples of SaaS are Microsoft Azure, Dropbox, Google Docs, etc.

    What are some of the failed SaaS startups?

    Some of the failed SaaS startups are Teamometer, RingDaddy, Habitual, etc.