As people become more reliant on software for various aspects of their lives and businesses, the SaaS (Software as a Service) industry has never been as profitable. Innovation is key to a successful SaaS business, which means being able to capitalize on the latest relevant technologies can result in massive profits. To put things into perspective, note that many average small-scale businesses rely on at least three cloud-based services. This means that there really are a lot of potential customers ready for the taking.
Unfortunately, there’s one big catch: staying innovative involves a lot of change, and changes sometimes require a lot of resources. Even the biggest companies in the SaaS industry can experience trouble implementing such changes, so how can a small-scale business keep up with the competition while still making profits? The answer lies in keeping a healthy subscription base.
1. Understand Your Customer’s Value
Customer value is one of the most important factors you need to understand in order to maintain a steady flow of revenue in the SaaS industry. Because you often have to spend a huge amount of financial resources to attract subscribers, you want to make sure your customers stay subscribed long enough to the point where you can recoup the costs of acquisition. The longer a customer stays subscribed, the more value you get out of what you spent on acquiring that particular customer.
2. Convenience Is Key
When it comes to SaaS, customers are more likely to go for the most convenient option available in the market. For example, a subscriber may find their current subscription plan too tedious to manage so they end up looking for a more hassle-free alternative.
Many customers that are satisfied with their subscription can still end up unsubscribing because of the friction points associated with making regular payments. By using a proper recurring billing software, you’re able to provide the convenience that people are looking for. As a result, they keep their subscription, and you prevent those customers from churning.
3. Focus on High-Value Customers
Of course, you can’t expect all customers to stay subscribed even if you make things as convenient for them as possible. There will still be customers who are likely to unsubscribe after a month or two, for one reason or another.
Instead of spending more resources on making your brand more appealing to them, it’s better to focus on improving your products or services for those who are actively seeking out your services. High-value customers require less effort to keep them engaged, and they are the ones that are more likely to encourage other potential customers to subscribe to you. You don’t just focus on looking for more customers, you also need to find the ones that will stay loyal to you.
4. Make the Right Changes
With the constant development of new software, you might be tempted to adapt to every change coming your way. However, some of these upgrades may not be relevant to your existing subscription base. Either the changes in the new software is not something your subscribers will find useful or the extra benefits the software provides does not warrant the higher cost of upgrading.
By using your subscription management tools to study patterns in your customer’s usage statistics, you can limit your spending on upgrades that will actually matter to your subscriber base, making them more likely to stay subscribed despite possible price increases. It also helps to have flexible subscription billing tools to make scaling up and other changes to the business model easier.
The SaaS industry might seem too focused on staying up to date, but those changes actually point towards the real path to success: helping the customers themselves succeed. As long as you provide top- quality products that are useful and relevant to your customers, they are bound to stay loyal to your business.