SaaS is the abbreviated form of "Software as a Service" and refers to the software licensing and delivery model.
There are innumerable benefits of deploying SaaS-based business models for customers including lower cost, flexibility, and scalability, reduced time to benefit, higher adoption, hassle-free upgrades, and therefore, as marketers, you need to find ideas to grow your SaaS business.
Also, implementing a SaaS model is beneficial for vendors as there is less friction in the sales cycle, the rate of multiplication in revenue is recurring, the model is easy to be pivoted and improved. Additionally, the trails are user-friendly and free trials are without much worry, and the deployment and hosting costs are significantly reduced.
Cloud-based software is licensed via subscription and with the help of the cloud, value is generated for your target audience. The cloud-based software is centrally hosted and this business model is deployed by many B2B organizations.
The first-ever definition of SaaS was given by Gartner as follows:
“Software that is owned, delivered, and managed remotely by one or more providers”.
Also a SaaS vendor essentially:
“delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time on a pay-for-use basis or as a subscription.”
According to Statista, the total size of the global public cloud software as a service (SaaS) market is projected to reach 157 billion U.S. dollars in size in 2020.
The range of the annual SDE (Seller Discretionary Earnings) and their final differences can matter a lot to the business owners. As such one of the important ideas for you to grow your SaaS business might be figuring out the metrics that matter most for increasing the SaaS business value. Having figured out these metrics, one can work towards optimizing these metrics.
SaaS valuations have been in the prime areas of focus of the most passionate and intriguing discussions among independent venture business owners, stakeholders, and consultants for quite a long time.
Let's have a look at some of the most impactful ideas to grow your SaaS business:
1. Give Something Valuable that Directly Resonates with What Your Business Offers
When you give something away to your prospective customers, particularly something that is directly aligned with the products or services you have to offer, you convince your prospects to use your services.
This is an important idea to grow your SaaS business and has been successfully used in the past by companies such as Dropbox and PayPal.
When Dropbox first started off their business, they gave away plenty of extra storage to their customers through their referral program.
A similar strategy was implemented by PayPal initially when they rewarded their customers with $10 for each referral to start with.
Such strategies not only get your prospective customers involved and are excellent to get people involved to market your business, but are also impeccable to make an impact by sidelining the common approaches such as giving a 30-day free trial. Also, strategies such as giving a free iPad might sound lucrative, nonetheless, it is too generic an offer and might not resonate with what your business offers.
So, if you have to show the value proposition of your products or services, consider giving something valuable that resonates with your products and might prove to be a spectacular idea to grow your SaaS business.
2. Provide a 'freemium' for your Sophisticated Software Service to gain some Early Traction
Leveraging the 'freemium' model is an excellent idea to grow your SaaS business as it provides you with an opportunity to reflect on the value proposition of your products or services.
People are easily fascinated by free stuff and as such offering, free service can be a great way to get some early traction.
Sometimes, your sophisticated software may require some user education and in such instances, the 'freemium' model comes handy. Whether your product is complex or it is simply tough for users to understand its value proposition, deploying a 'freemium' model resolves all the problems. The more the prospects customers use the products, the easier it becomes for them to see the value proposition of your products or services. As such, providing a 'freemium' trial is an excellent idea to grow your business.
The 'freemium' trial model worked excellently for Evernote. The company was faced with immense challenges in the early stage of its business. However, leveraging the 'freemium' trial model, the company offered its software for free and was able to grow its user base and make people understand the value of its offering.
3. Creating Relevant and Intriguing Content is Amongst the most Spectacular Ideas to Grow your SaaS Business
Creating compelling and high-quality content is and quality publishing is an excellent way for marketers to grow their email lists and helps you build high-quality databases to build high-quality traffic and earn more revenue.
When Buffer App entered the social media tool niche, the creation of valuable content and sharing it on social media was the way that helped it stand-out in the highly competitive marketplace and builds its unique personality as a brand. Because of intriguing, valuable, and high-quality content, the company was able to build a huge audience over a period of time.
With the help of great content, marketers can earn and establish customer loyalty. Thus, leveraging quality-content is amongst the most remarkable SaaS marketing tactics that will help you optimize your revenue no matter whatever software you release.
4. Analyze Your Competitors and If They Predominate Market Share Consider Partnering With Them
If you run a SaaS business, you must have done a competitive analysis. If you have a competition that is way ahead of you and have a majority of market share, consider leveraging a popular platform that they might have created.
When you analyze that becoming a direct competitor can be a path of maximum resistance, you can consider partnering with your giant competitors. This can be amongst yet another impactful ideas to grow your SaaS business and hack your trajectory to a healthy B2B SaaS sales strategy.
Airbnb employed this SaaS product strategy when it recognized the monopoly of Craigslist as a dominant name in rentals, temporary residence, and vacation home market, while Airbnb was still a newbie in the marketplace.
Airbnb analyzed that investing in advertising wasn't much of use and as such smartly instructed its users to add their personal listings to Craigslist as well. As Craigslist didn't have an API (Application Program Interface), Airbnb employed coding gimmicks and trickery to get their game rolling.
5. Providing Exclusive Offers
People love to feel exclusive. Exclusivity is one of the most important business ideas to grow your SaaS business. Exclusivity and SaaS business development go hand-in-hand as by creating compelling reasons for people to sign-up, you can not only show them the value proposition of your products or services but also influence them in a way to share your service with their friends.
LinkedIn, for example, leveraged upon this exclusivity model by making a social networking site, exclusively for professionals. Also, Google did the same when they came up with Gmail. People had to get an invitation to get their personal inbox.
6. Mind Your SaaS Metrics
Employing the right metrics is amongst the most important ideas to grow your SaaS business and can pave the way for the success of your SaaS business. The prospective buyers give great importance to the SaaS metrics when analyzing a business.
Churn, lifetime value (LTV), and customer acquisition cost (CAC) are amongst the most important SaaS metrics looked up by financial specialists while assessing the client base and by prudence the nature of the business' income.
7. Consolidate Your Customer Acquisition Channels
Consolidating your customer acquisition channels is amongst the most important ideas to grow your SaaS business, as customer acquisition is a prime determinant of evaluating the longevity of these businesses.
Businesses should focus on adding a fair number of new customers every month to mitigate the loss in the customer base per year.
The customer acquisition channels of the SaaS business are very important to the investors. Also, these channels are constantly evaluated by the buyers in terms of concentration, competition, and conversion.
A pioneer SaaS business acquires customers from an array of channels including organic search, affiliate marketing, paid advertising, or otherwise.
Having a wide array of channels not only reduces over-dependency on a single channel but also exponentially improves the chances to monetize upon the multiple opportunities in multiple ways.
SaaS businesses with successful paid and organic channels benefit from this premium with buyers.
It is the ability of businesses to defend each acquisition channel of interest to the investors, in the process of evaluating their strength.
If your SaaS business employs a strong backlinking strategy and ranks well for niche-specific organic keywords, it can be considered an effective channel for organic customer acquisition.
On the other hand, a SaaS business engaged in wars for establishing competitive pricing for its products or services with its competitors and simultaneously competing in paid search with its competitors is obviously considered a weaker acquisition channel.
The conversion rates are the ultimate determinants of the actual value gained from the marketing and advertising investments made.
The conversion-to-trail ratio and conversion-to-paid ratio are carefully monitored by the investors alongside the underlying customer acquisition costs and thus, the cost associated with each customer acquisition channel is analytically analyzed and strategies are framed for optimizing the conversions and ultimately, the appraisal of each acquisition channel.
8. Be Mindful of the Product Lifecycle
At a point when a SaaS business comes to showcase in the marketplace, it is prescribed to have the product at a high point of its development life-cycle; at the end of the day, not requiring a significant update at any point in the near future.
This gives the new owner some runway in front of any significant turn of events and gives some solace that the sender hasn't just abandoned the business and is ignoring possession when the product needs significant consideration, care, and improvement at certain fronts.
9. Deploying High-Quality Technical Knowledge Matters
If the developers make it a point to optimize the technical input in the SaaS products, it can be perceived as a sophisticated and high-quality product. Thus, deploying high technical expertise in the SaaS products matters and I amongst the most important ideas to grow your SaaS business. A high-quality product with a unique IP can automatically set you a mile ahead of your nearest competitors even if it means that the new owner has to do some extra work by themselves or pay someone else to get that vital extra tasks done.
Factoring the cost into the Seller Discretionary Earnings (SDE) will ultimately lower the valuation component for the SaaS business.
Intelligent SaaS can, therefore, think about outsourcing the vital development part to the contractors. Thus, they can benefit from a perceived simple transfer of ownership, as well as, from having a greater pool of buyers.
10. Always be aware of the Competition in the Marketplace
Analyzing your competition is amongst the most important ideas to grow your SaaS business. Buyers evaluate the niche-specific competitors of a SaaS business because a number of companies are backed by the venture capitals and there are often high development costs associated with this business model.
Within a highly competitive niche, a smaller SaaS business may find itself underfunded and unable to compete with the development efforts and functionalities demonstrated by the better-funded SaaS companies backed up by venture capitals.
Wrapping Things Up
When analyzing the spectacular ideas to grow your SaaS business, it is important for marketers to understand that there are some valuation factors that cannot be addressed, for example, nothing much can be done about assessing the competition in the niche.
However, there are still several spectacular ideas that you can put to use to transform your SaaS business and gain better revenue. Reducing the churn, outsourcing product development and support, securing the intellectual property (IP), documenting the source code, proper positioning of the products, and avoiding offering too many discounts are some of the business tactics that can be used along with the vital ideas described above in the blog to optimize your SaaS business.
Yet another way to maximize your business profitability is to purchase a SaaS business. Even if you have in-depth knowledge of just a couple of niches, you can discover a SaaS business to best suit your skills.
Employing the above ideas will pave the way to the quick growth of your SaaS business; however, marketers need to be vigilant, and hardworking to consistently optimize their respective B2B SaaS strategy models. To pull off the spectacular ideas to grow your SaaS business, consistent perseverance and optimization endeavors are more important than just considering making the most of each growth-driven idea, one at a time.
Valasys Media is a well-renowned name in providing B2B customers with tailored solutions to optimize their marketing and advertising endeavors. Our services including lead generation, lead nurturing, account-based marketing, list building services, contact discovery services, content syndication services, event promotion, appointment setting, business intelligence, and CRM services, help you optimize your core business bottom-lines after assessing your business requirements, based on your business models and previous transactions.
Contact us for data-driven business recommendations to fuel your marketing and advertising endeavors, and to build and manage perennially healthy sales pipelines to optimize your revenue goals.