SaaS development and SaaS marketing are a big deal now. So how to build and monetize SaaS? The good news is, if you follow the right steps, the chances of success are relatively high.
The SaaS market is growing by 20% annually and it’s expected to be a $164 billion market by 2022. The bad news is that the market is getting crowded and the barrier to entry is getting lower. There are now more than 10,000 SaaS companies competing for customers and investors.
So how to build a SaaS business and stand out from the crowd?
1. Create a product that solves a real problem
If you want to build a successful software business, you need to start with a great idea. And the best way to come up with a great idea is to identify a problem that people are willing to pay to solve.
The problem you choose to solve is the most important factor in determining the success or failure of your software business. If you choose a problem that is too small, too niche (for example, platform migration for EV charging businesses), or too easy to solve, you’ll have a hard time building a successful business around it. Even more so, if you do not localize your software, you may miss out on potential markets where your solution could be highly relevant.
On the other hand, if you choose a problem that is too big, too broad, or too hard to solve, you’ll have a hard time building a product that can effectively address it.
The key is to find a problem that is big enough to support a successful business, but small enough that you can effectively solve it with your product. This is where working with an MVP app development company and low code consulting can be extremely helpful.
2. Invest in your customer support
Customer support is one of the most important aspects of a SaaS business. If your customers are having trouble using your product, they’re not going to stick around for long.
Make sure you have a dedicated customer support team in place to help your customers with any issues they may have. Additionally, providing multilingual support can greatly enhance your service, catering to a broader audience and ensuring all customers feel understood. This will help you build a loyal customer base and reduce churn.
In addition to having a dedicated customer support team, you should also invest in customer support software with multilingual support features.. This will help you manage customer inquiries from diverse language backgrounds and provide timely responses. AI-powered chatbots can further enhance customer support by providing immediate, personalized responses to common questions, reducing the workload on your support team.
3. Use a freemium model
The freemium model is one in which you offer a basic version of your product for free and then charge for premium features. This is a great way to attract new users and get them hooked on your software.
Once they see how much value your software provides, they’ll be more likely to upgrade to a paid plan. This is a great way to build a customer base and start generating revenue.
Just keep in mind that you need to make sure that your free plan is valuable enough to get people in the door. If it’s too limited, then they may not see the value in upgrading to a paid plan.
4. Get your pricing right
One of the most difficult decisions a SaaS founder has to make is how to price your product. The price you set will have a huge impact on your business. Too high, and you could price yourself out of the market. Too low, and you’ll struggle to make a profit.
There are many different pricing models you can use for your SaaS business, such as freemium, tiered pricing, usage-based pricing, and value-based pricing. The key is to find the model that works best for your business.
To do this, you’ll need to consider a number of factors, such as your costs, the value you’re providing to your customers, and what your competitors are charging. You’ll also need to test your pricing to see how it affects your sales and revenue.
Pricing is an ongoing process, and you’ll need to revisit it regularly as your business grows and changes.
5. Create an affiliate program
Affiliate programs are a great way to get other people to promote your product in exchange for a commission on any sales they generate. This is a low-risk way to get more exposure for your SaaS and can be a great way to scale your sales.
You can create an affiliate program using affiliate software, or you can build your own. You’ll need to decide on a commission structure, create promotional materials for your affiliates to use, and then recruit affiliates to join your program.
6. Use a subscription model
The subscription model is the most common way SaaS companies monetize their products.
The subscription model is a business model where customers pay a recurring fee at regular intervals. This is typically monthly or annually.
The subscription model is great for SaaS companies because it provides a predictable stream of revenue. This makes it easier for the company to plan and grow.
It also helps to build a loyal customer base. Customers who subscribe to a service are more likely to continue using it over the long term.
There are a few different types of subscription models you can use. The most common are flat-rate, usage-based, tiered, and freemium.
Flat-rate is the simplest subscription model. Customers pay the same amount each month, regardless of how much they use the service.
Usage-based is where customers are charged based on how much they use the service. This can be a good model for SaaS companies where the cost of providing the service increases with usage.
Tiered is where customers can choose from different pricing tiers. Each tier offers a different level of service and is priced accordingly.
Freemium is where you offer a basic version of your service for free, and then charge for a premium version with more features. This can be a great way to attract new customers.
7. Charge for premium features
One of the most common ways to monetize a SaaS business is to offer a free version of your software with limited features and then charge a monthly fee for premium features.
This is a great way to attract new customers, as they can try your software before they buy. It also allows you to start building a relationship with your customers, which can lead to upselling opportunities later on.
When it comes to deciding which features to offer for free and which to charge for, think about what your target customers need most. If you’re not sure, ask them! Your customers are the best source of information when it comes to making decisions about your product.
8. Use a usage-based pricing model
Most SaaS companies use a subscription-based pricing model, where customers pay a flat monthly or annual fee to access the software.
However, if your software is designed to help businesses scale, you might want to consider a usage-based pricing model.
With a usage-based pricing model, customers only pay for the resources they use. This allows you to charge more for your software as your customers grow, without having to constantly raise your prices.
It also allows you to attract smaller businesses that may not be able to afford a subscription-based pricing model.
9. Target the right audience
When you’re building a SaaS product, it’s important to know who your target audience is. To do this, you’ll need to conduct market research to identify the needs of your potential customers and understand how your product can help them.
Once you know who your target audience is, you can start to build a marketing strategy that will help you reach them. This will involve creating customer personas, identifying where your potential customers spend their time online, and tailoring your marketing messages to speak directly to them.
If you’re not targeting the right audience, you’ll find it difficult to get your SaaS product off the ground. That’s why it’s so important to spend time on this step before you start building your product. Positive customer reviews can illustrate how your product solves specific pain points, helping attract the right users.
10. Get the word out
The last step is to get the word out about your new software. You can start by reaching out to your existing customers and letting them know about the new features you’ve added.
You can also use social media to spread the word. If you have a blog, you can write a post about your new software and share it with your audience. You can also reach out to influencers in your industry and ask them to review your software.
One of the best ways to get the word out about your new software is to offer a free trial. This will allow potential customers to try it out for themselves and see if it’s a good fit for their needs. If they like it, they’ll be more likely to sign up for a paid plan.
Conclusion
If you are a SaaS business owner and you are looking for ways to grow your business, don’t forget about your customer. You can have the best product in the world, but if you don’t have customers, you don’t have a business.