According to leading VC firms, SaaS is the unavoidable future of enterprise services. This is supported by statistics showing that funding to SaaS companies hit $11.7B in 2014, a 70% surge since previous year.
Below is my favorite top 3 tips by SaaS entrepreneurs with proven track records and what I saw VC tend to invest in, enjoy.
Customer support is the difference concerning success and failure in SaaS startups
At the start, SaaS invention are usually imperfect, buggy and unclear on their service. But unlike big players, startups can afford to devote time for every single client. Sit down, study the problems they bring up, and tweak your product with a positive constructive attitude. Go as far as apologizing and share your vision for what’s to come. If you get into the hearts and minds of your early customers, you have a solid start.
Most SaaS entrepreneurs are all about getting new customers, but what the existing customers are the real source of revenue. In some SaaS companies major share of the revenue comes from subscription renewals and existing client usage. Conversions are significant, but then again keeping the conversions that already exist is even more vital from a revenue standpoint.
The contented customers always reference the great customer support. Those very customers are the ones endorsing the company on social media and in person. Growth is one of the toughest parts of building a SaaS company, and you need all the sponsoring you can get. Support your clients, and they will support you.
Examining data & Inquiring users
In your initial days, you might not have sufficient data to really understand what’s working and what’s not. Occasionally you will see good numbers you should start probing the data and ask why. This simple question is a good start to actually learn from your data.
Testimonials are an integral part of your data and a must-have, but choose them sensibly. SaaS users are selective when it comes to encouragement by using testimonials. The best convincing testimonials will come from customers who have things in common. The more alike the testifier is, the better the buyer’s likelihood to opt-in.
Showing statistics is key, SaaS buyers think in pie graphs and numbers. A common yet effective marketing tactics is to use data to market your product. Explain how the product saves money, helps the client make money, and improves business operations.
The statement “We had 90% more traffic than last month” does not translate data into helpful insights. Rather find detailed answers: “Last month we had 90% original visitors for the reason that we put the latest blog post on Twitter and it got retweeted by @blog2market and at the same time our sign-up amount has doubled and there might be a correlation”.
Freemium Is Essential
Even though SaaS like any business is suppose to make profit, it is now standard practice to allow users to try it out first for free before selling it for actual money.
Provide free trials and don’t over limit the functionality of the software’s capabilities. Instead, give each user full, free, and unlimited access to your software so they can evaluate its powerful potential.
Marketing to your free customers is just as important as the quality of free trial itself. Your customers already know what they want and which functions it needs. They’ve done their homework and even know about your company, and how it differs from the competition. Therefore It is wasted effort to try selling a product your free costumers are already using, instead, you should sell your benefits.
The marketing should focus on the company’s superior uptime, skilled customer service, and fantastic security and of course the premium paid features. It hard to speak about exact timeframes for a free trial, the best way to find out which works best is to test different times.
In a nutshell
This post just covers three lessons I wanted to share and is not a complete how-to found SaaS Company. Knowing and understanding as much as possible about your business model and your metrics is not optional, specifically if you start a SaaS business. Finally, focus on the weak spots and embrace the costumer testimonies for good or for worse to improve. Also finding the right mentors can save you quite some time when you start your SaaS venture.