What lessons can businesses can learn from the success of SaaS
SaaS businesses are focused on customer success, offering the latest products and removing complexities and payment challenges. Since its inception over twenty years ago, the industry has experienced significant growth and innovation.
Recent studies show that the average employee uses over 30 cloud services at work. According to Synergy Research Group, global investment for cloud-based software is predicted to exceed $100 billion this year. Some businesses such as Netflix have gained a significant increase in their subscriber base and while all businesses would like a similar level of success, it is difficult to implement SaaS business models. There are several features of SaaS businesses that have supported the success of this industry:
Ensure Customer Success is a priority
Success for SaaS companies isn’t simply focused on sales. Subscriptions can be relatively easy to sign up customers but it’s equally easier to lose subscriptions. A lack of focus on addressing the churn rate can really damage a subscription business. SaaS businesses tend to invest heavily in customer success, marketing and consulting to measure client satisfaction and monitor any potential issues before they arise. Customer Success Managers should be focused on gaining a clear understanding of customer challenges. Ultimately, the most important part of the process is whether the customer has bought again and how much more they spent on the business. SaaS industry experts believe transparency is key, creating a clear dialogue with customers and asking direct questions such as why would you choose us again and why would you recommend us to others. This is vital information for a business to continue evolving and to maintain a happy customer.
Simplified access to new products For major businesses such as Microsoft, only a few years ago customers were required to renew products every time an updated version was released. Today, Microsoft enables individuals and businesses to use cloud-based applications on a monthly fee. A major factor of success with SaaS businesses is the delivery of cloud-based software, eliminating the need for high initial costs associated with acquiring products and to be left with a redundant product when a new version is introduced. In a SaaS environment, the customer is provided with real-time access to the most recent product versions. Compared to the conventional of ‘buy and own’ product models, the time taken to set up and deliver these services is greatly reduced and customers require minimal effort to access the product updates.
The core thing to consider here when offering products and services is flexibility. Businesses need to invest in the necessary resources to support customers to upgrade products simply and scale product deployment in a manner that suits customers.
Managing the burdens
Quite often, businesses will develop services within their focus area and use a SaaS business for other areas. The SaaS pricing model generally suits most businesses, enabling a company to cover all services without having to build its own in-house system. From a security and compliance perspective, its usually simpler and more efficient to utilise external providers. SaaS allows companies to incorporate the services they need and focus their attention on their core offering. A further benefit of SaaS is enabling smaller businesses to gain access to the latest infrastructure, security and compliance provided by SaaS businesses. The key lesson here is to really consider the potential challenges your clients may be facing and what actions can be taken to working towards solving them. The customer journey could be improved by reducing cost, regulation and compliance from customers, enabling them to focus on their core service.
Remove the payment complexities
Customers are looking for a simplistic payment service that requires minimal effort and doesn’t involve further payments. Creating a seamless, subscription payment process is essential for SaaS companies to improve the lifetime value of their customers. A prime example of efficient payment is DocuSign, providing a payment mechanism the eliminates as much friction as possible. In terms of payments, it is critical to understand how your customers wish to pay and then focus on ensuring the solution is seamless. Whichever payment plan a business decides to focus on, customer preference needs to be the focus and providing a payment system that doesn’t obstruct the sales process.