By the Numbers
SaaS
Software-as-a-service (SaaS) has become an attractive choice for organizations in search of accessibility, functionality, agility, and cost-effectiveness within brand divisions, SME’s and and other B2B drops, and in conjunction with the increased need for software collaboration tools during Covid 19, SaaS is taking over the cloud computing market.
Gartner predicts that the global service-based cloud application industry will be worth $143.7 billion by 2022, and has increased its estimates for global enterprise and IT spend growth in 2022 to 10.2%, with Enterprise and SaaS the biggest beneficiaries.
The Key Ingredients
Product
Your product is the foundation, and SaaS product management produces quantifiably better, focused, need-based outcomes.
Product management consists of:
1. Product Research
Your product’s R&D should be based upon constantly updated, peer reviewed research which will provide insights, allowing you to understand how to right size your product, and ensure that the development trajectory aligns with the market demand and the needs of your existing clients, a key component of strategic planning.
Also note, research not only involves using market analysis tools, surveys, focus groups etc. but it also includes prototype testing, beta testing etc.
2. Product Vision, Goals and Pricing & Revenue Model
Strategic leaders should understand the objectives of the product, the company vision and goals, and then work with their product teams to create a plan accordingly; the vision needs to include goals, objectives, high-level discussions, and more detailed info of the product.
The business teams need to create a pricing model for the product, based upon the market research, segmentation and the business goals. Many initial models are based upon the pricing model and sales assumptions, but with the right tools, it’s possible to predict and create a 3 year start-up revenue plan, an important step towards making revenue predictable, repeatable and scalable so that you can then focus on making your business profitable.
3. Roadmap and Planning
Product roadmap is an unsung hero in the SaaS world; it’s a cocktail of goals, timelines, and features that gives a detailed overview of your product plan and aligns all the key stakeholders of your team. This should be owned by your product leader.
4. Product Maintenance
You got an agency to code your product, or built a team who coded it or coded it yourself. Great, now what?
You need a whole plan and team to maintain the product which includes a mix of UX designers, engineers, DevOps AND a system architect, someone to stay on top of the recent tech practices ensuring your product tech stack, APIs, SDKs etc. and its development over time.
5. Product Lifecycle Management
PLM is another one of those “is this a real thing” ingredient. PLM for SaaS is the management and maintenance of a SaaS offering, from the prototype phase to the retirement phase. PLM allows companies to make informed business decisions about pricing, product expansion, and the growing complexity of the product as it scales.
PLM not only does that but combined with product research, it provides sales insights for retention, up-sell, and cross sells.
Sales
Developing the right sales model and process for your SaaS brand is very important. The most common models are customer self-service, transactional sales, and enterprise sales.
In today’s cluttered world, Sales need to become crafty and combine with marketing to create a better experience for the customers and prospects. To make marketing more value and revenue-driven, sales cannot work in silo anymore. It needs marketing to support with creating relevant content and engagement materials.
Finding the right sales strategy should require you to collaborate with market research and core marketing teams to deep dive into audience personas, user journeys and preferences. The shotgun approach is great if you’re not looking to scale or you offer a very unique product everyone needs.
Marketing
Some dev team or startup builds an awesome app, gets covered in few blogs, generates some buzz and then hits a wall; 9 out of 10 web SaaS startups end up like this and in 12–24 months shut down. Building a software is the exciting part, but what can become tough, boring and time consuming is the marketing of that product which a lot of SaaS companies struggle with, especially if they think anyone can do marketing.
With SaaS offerings, each customer is unique, so it’s very hard to take a mass approach to marketing; it needs to be able to cater to a variety of industries, and the best way to do that is to take a vertical approach, which requires you to understand your audience starting with — Who could use my product? What value will they add for this particular industry? Take an example of a successful retail business pivoting online; could they use your E-commerce platform at scale? Should you then market to retailers looking to pivot?
The secret sauce
Brand & Positioning
The market is getting cluttered. Before you pivot your product to serve another market, you should look at your brand and positioning. SaaS-ers aren’t known to be very good at branding because it’s easy to get lost into the product-market-fit dilemma. To find out if this is you, ask yourself the following:
You have a product that works just a well as other products. What’s your unique selling point (USP) or USPs? Maybe you have a better customer service and account management team, maybe you have world class UI for your product, maybe you have the best strategic business directors working with your clients to right size the product and support adoption across the organization. Whatever it is, use it as part of your positioning ideation process.
Branding experts should be able to help you come up with a strategy that uniquely works for you and positions you as the leader in the markets that you serve.
Trends for SaaS — a different perspective
Global Outreach
If you’re a SaaS company in Canada or USA, North America is not the only market you serve anymore. With the current pandemic, virtual communication and collaboration has expanded in society further, enabling companies to extend their offerings to global clients. Expanding your sales strategy and vision from regional to global leaves you with a larger pool of potential prospects.
Focus on Branding
With the current clutter in the market, SaaS companies need to understand the importance of branding themselves in a way that not always highlights the product. A great example of this is Salesforce who sell CRM software; read about their brand positioning here.
Content Marketing
Focus on teaching, investing in creators and how-to content to fast track tech adoption. SaaS companies should invest in SME programs to support them in adopting tech. If you can’t find that one large enterprise client, you can teach medium sized ones and make up in volume.
Influencers
A study by Nielsen indicates that influencer content has 11X higher ROI than traditional forms of digital marketing efforts; It’s possible for SaaS companies, provided they’ve done the proper market research to understand their market segments, relevant figures their target looks up to and the channels they use to promote, to utilize the support of influencers to gain top of mind awareness or to have them as your brand advocates.
Reduced pricing + High value = Market Acquisition
As a SaaS-er, you can always go with an aggressive market penetration strategy by reducing your initial costs or provide free implementation and training services. IT implementation, product adoption and training is costly for your clients, especially those with legacy systems. Providing free one-time implementation services and training materials can be your USP. We believe, the more cluttered the market gets, the higher the probability of some SaaS-ers going down this road.
Partnerships
Don’t just partner with technical shops. Partner with marketing companies. A lot of SaaS is being used by Marketers, and partnering up with digital marketing agencies makes sense. “Hubspot’s” partnership model is a great example of this.
*All the trends mentioned above are strategic opinions only.
