The success of SaaS companies is well established and many would like to be so successful but are unable to apply SaaS business models identically. Discover four fundamental qualities that have made the sector successful and that all companies can learn from.
Since Salesforce coined the term “Software-as-a-Service” over twenty years ago, the industry has been characterized by tremendous growth, value for money, and continued sophistication of innovation. Thus, cloud service spending reached $ 200 billion worldwide in 2019. All IT segments have been impacted by the crisis, and only Cloud Computing is resisting:
according to IDC, revenues from cloud services, both public and private, increased by 2.2% in the first quarter of 2020, while investments in infrastructure traditional, non-cloud, fell 16.3% year-on-year.
All companies would like to be so successful, but many are unable to apply SaaS business models identically. There are, however, four fundamental qualities that have fueled the success of the sector and which hold lessons from which virtually any business can draw.
Make “customer satisfaction” really appealing
Unlike the traditional business selling process, the success of SaaS businesses doesn’t just depend on the initial sale. The subscription is a double-edged sword: customers can easily register, but also cancel. If it doesn’t take into account the problem of attrition, any subscription business can quickly disappear.
So SaaS companies typically invest a lot in their customer service, marketing, and consulting teams in order to manage customer satisfaction thoroughly and resolve issues before they arise. The best Customer Success Managers (CSMs) focus on understanding their customers’ challenges. They don’t care to be appreciated; they want to earn the respect of their customers by helping them solve specific problems. This satisfaction is not measured by positive company health, or by the number of commitments made during the last quarter; the only thing that really matters is whether the customer has purchased again and, if so, how much has still been spent.
The biggest lesson for non-SaaS companies is that transparency breeds transparency. Establish an open dialogue with your customers and ask direct questions. Why would you choose us again? Why would you recommend to us? All of this helps an organization to become more self-aware in the way it offers its products and services, to innovate directly, and to satisfy its current customers.
Provide easy access to the best and new products
Only a few years ago, customers had to renew the products of big players such as SAP and Oracle whenever new versions were available. Today, the software giants in SaaS mode allow individuals and businesses to connect and use its cloud applications accessible over the Internet for a monthly fee.
One of the main success factors of SaaS is this online software offering, which reduces the significant upfront costs of buying software or hardware. and owning it and ending up with a product. obsolete as soon as a new version is available. In the world of SaaS, the customer always has real-time access to the most recent and efficient versions.
SaaS also offers many other potential advantages over traditional “buy and own” models. For example, the time required to set up and deploy services is reduced and customers have effortless access to updates. This built-in flexibility helps businesses adapt and grow.
This is an essential element for all companies to take into account: when it comes to offering products and services, flexibility is essential. You need to invest in the resources and teams necessary to help your customers easily upgrade their products and tailor their deployments of your product to their needs. Empower them, don’t lock them into arbitrarily imposed constraints.
Lighten your engagement model
There has been a long-standing debate about whether to develop yourself or outsource when it comes to services. Often times, successful companies only develop services that are within their area of expertise and use SaaS companies (among others) for the rest.
The pay-as-you-go (SaaS) model is most often suitable for these companies. For example, it would probably not seem relevant for a food delivery company to create its accounting system or its own online security portal. This is especially important because it’s not just about how a company can build the solution itself – there are significant legal and security issues as well. When it comes to security and compliance, it’s often much safer (and easier) to use outside vendors. SaaS allows businesses to plug in the things they need and focus on what they do best.
Another advantage of SaaS is the reduction of barriers to entry for small businesses because the “multi-client” architecture is generally at the heart of their service. This means that all customers, large and small, can benefit from the same quality of infrastructure, security, and compliance. It democratizes software and services to provide fairer and more secure access to all.
You must learn a lesson that you must learn to understand the problems of your customers and know the extent to which you can go to solve them. Businesses in all industries could improve their customer journeys by sparing them as much of the cost, regulatory and compliance considerations as possible, so they can focus on their own business.
Eliminate payment difficulties
For the end customer, payment is a means of achieving a goal, that of accessing the service he needs. He wants to sign up once, pay in the way that suits him best, and never worry about payments again. A transparent subscription payment process is crucial for SaaS companies to maximize customer value over the life of the service.
For example, DocuSign manages this aspect particularly well. The SaaS company is at the forefront of experimenting with payment mechanisms that take preferences into account and remove as many hassles as possible. And it’s all based on real data and information obtained from its customers.
For example,
during the initial phase of rolling out the subscription offering internationally, DocuSign found that a significant portion of its new customers in Europe chose to pay by direct debit when they had the option.
When it comes to payments, it’s very important to know how your customers prefer to pay first. and then to make sure your solution is transparent. All businesses can learn from this: Whether you use recurring payments or not, you need to accommodate customer preferences and maintain payment systems that don’t get in the way of a sale.
Get inspiration from SaaS
The combination of these four approaches has fueled much of the success and meteoric growth of the SaaS industry. We may indeed be envious, but above all, we should learn from it. Because when it comes to customer retention and satisfaction, it’s hard to deny that SaaS does it much better than others.
