If you are not aware about the SaaS revolution, you are living under the rock. Software as a service is globally growing. For every process or software, there is a SaaS tool to make it better. SaaS offerings allow companies to operate more efficiently, grow revenue, improve performance, and quickly scale. In 2020, SaaS will generate nearly $141 billion according to Gartner. A SaaS company moves through many stages during its life cycle. 70 percent of SaaS companies fail due to premature scaling, according to the Startup Genome Project.
Some startling facts as found in recent research include:
- By 2021, nearly 75% of organizations will shift to SaaS offerings
- Most organizations with more than 250employees use over 100 SaaS apps
- 80 percent of businesses already use at least one SaaS application
- For 89% of SaaS businesses, new customer acquisition is the top growth activity.
The four major SaaS life cycle stages include:
- Pre-startup
- Startup
- Growth
- Maturity
Pre-Startup: This is the stage of discovery, mission, and understanding the problem you want to solve. During this stage companies should focus on identifying the problem and devising ways in which the service provides a solution to that problem. It involves research, discussion, and dialogue. Talking to investors, customers, or raising finances are some of the activities in this stage. Establishing relationships with customers or joining incubator groups can also help. Designing a business plan or strategy directed towards sales and revenue is important.
Start-up: In this stage, the idea is validated about its suitability for the market. A good foundation for the product will be important to scale well. Every start-up faces certain risks including failing to understand the target audience. Spending a lot on customer acquisition before product is created completely. Common activities in this includes achieving viral growth, marketing funnel optimization, customer experience, and finding channels to acquire customers.
Growth: In this stage, your SaaS company is growing. You understand the market, product, and what fits. It shows a clear understanding of customers, their costs, feedback, and more. Increased hiring, improvements in the back end, more funding, new customers, established sales processes, and more will ensure that your SaaS company is scaled to grow. Looking for opportunities to grow globally. Considering new services or products and experiment with additional opportunities.
Maturity: At this stage, there will be shifts to transform to an extended life. Growth may slow down and be unable to keep up with expectations. There is a need for strategic transformation. There may be slowing down issues. The company should be ready for disruption and adapt to new technologies to develop products. If a product is not working, there is a need to understand the issue and look for solutions. Integrating latest features like artificial intelligence or machine learning can help immensely to stay abreast with global proceedings.
Benefits of SaaS and Reasons why SaaS is scaling up
SaaS is scaling up in 2020 and will continue to do so in 2021. SaaS businesses warrant necessary investment of resources. Here are reasons why SaaS companies are scaling up.
Cost Effectiveness
A typical SaaS business will enjoy more financial benefits as compared to other companies. There is a predictable cost involved. The hardware, software development, testing, delivery costs, and implementation expenses can be guessed and evaluated. The costs are manageable and include upgrades, hosting, and more.
Scalability
SaaS companies are easy to scale and support. There is less worry with respect to storage or new servers. Scalability offers a competitive advantage to grow in a fluctuating marketplace. SaaS companies can grow and shrink quite rapidly. It removes the worry of storage, backup, and server rooms. This while not compromising on the security of operations.
Flexibility
SaaS companies offer flexibility to customers. They can choose a subscription that works best for them. It allows for virtual product tours, remote work, any time customer support. The customer support is streamlined making it important to access business- critical support and help. It is also fairly simple to use. Things like installing, upgrading, are simple can be easily managed.
Scaling a SaaS business: 5 Growth Hacks
SaaS companies are all about customer acquisition, product, customer retention, and service. Some amazing growth hacks will make scoring success and scaling business faster.
Use live chat to get leads
Live chat is a great way to get to customers. It is a low hanging fruit which can help users with their questions on your product. Make it a proactive one instead of a generic live chat. Live chat prompts can help customers understand the product better. You can even get personalized demos of the product to get user details. Live chat will boost customer satisfaction by making sure they can ask the questions in their mind.
Content Marketing
This one is not a hack per se. It is more of a long-term plan to create organic traffic. This will tremendously scale your business. Well researched content with good statistics and research will contribute to success. Reaching out to the right teams will also impact growth. Content marketing will also create a good reader base which will promote loyalty and boost brand growth. This will also lead to customer education which is absolutely important.
Get a free tool
A great way any SaaS business can grow is through free tools. Guides, e-books, and other downloadable bits are good lead magnets. They will provide useful information and solve user problems. Some tools that can be given include-
- E-books
- Free guides
- Actionable toolkits
- Generators
You can limit the number of times it can be used to get details.
Create a list of influencers
Reach out to the right people to promote your product. Leveraging the help of influencers in the domain can help spread the word. You can find influencers in your niche who will engage with your product or service. Building relationships is important as it will scale operations. Retweets, mails, social media comments can help immensely with networking. The right list will help drive your sales incrementally. These relationships are more beneficial in the long run.
Retargeting is important
Retargeting is necessary to get a grip on audience. Every consumer has an idea of remarketing ads. They are more likely to convert. Retargeting is powerful as it will result in better conversions. It is important to make the right ads for remarketing. A bad ad can cause more hurt than good. Your retargeting campaign should address their pain points. A strong value proposition is necessary to make customers feel valued. Website visitors with remarketing ads are 70 percent more likely to become customers.
Bottom Line: SaaS Set for Growth
SaaS companies will scale when they have identified the points which can help them success. You need to create and implement better strategies to grow. This will be helpful in creating new opportunities and creating ways to excel and adapt. Expansion will continue at impressive rates and there is a need to be ready for disruption to scale better. SaaS is easier for enterprises to accept, learn, adapt, and grow. Though SaaS has its risks and challenges, companies are becoming increasingly aware. New innovative ways to enhance security have been created. Cementing your brand through marketing will also help maximise growth.
