The Software as a Service or SAAS industry continues to develop fast as several businesses are shifting towards cloud-based services. SAAS is the latest trend in the business world. Make use of these 10 tips to develop an effective business in this growing industry.

1. Follow KISS

KISS means keep it simple and stupid. Most of the SAAS products are self-served. It requires to be clean, simple, self-explanatory and also highly intuitive. Marketing and sales collateral should highlight value, user flows and returns on investment instead of technology and features.

2. Provide several packages

The entry level of SAAS should remain free. It should be limited in functionality, usage volume and time. It is best to provide two or three paid packages according to different kinds of customers and their usability, willingness to pay and ROI.

3. Describe, measure, investigate, enhance, control

In terms of actions, most SAAS users share valuable information about their product usage, behavior,and requirements. The information would reveal about the popular functionalities and the functions that are not in use. It should, therefore, be omitted according to the KISS principle. It also helps in defining packages and segment users. It is necessary to define tests and control the enhancement after making changes.

4. Develop an ecosystem

Successful products come with flexible and open APIs, which helps in easy integration of third-party software. Interoperability enhances the product value and remains the main source of income from resale opportunities, referrals, and equipment manufacturer contracts.

5. Provide the right professional services

Professional services should be provided with utmost care and attention. It is almost like a double-edged sword. It helps in increasing stickiness and revenue and decreases churn rates. It also increases cost of sales and deployment time and eases margin.

6. Remain committed to the customers’ success

Along with signing new customers, the SAAS Company should protect and develop its periodic revenue from current customers. The main goal would be to increase sales for about 10 to 25% through new bookings. To accomplish your goal, it is best to work with your customer success team. They need to monitor the usage levels of the customers, send satisfaction surveys and product updates, and also invite to customer advisory board meetings along with other things. To perform all these activities, the customer success group should be capable and trained in selling.

7. Monitor the dashboard

It is necessary for the SAAS Company to monitor KPI or key performance indicators. Some most important measurements include MMR or monthly recurring revenues, cash flows, churn rate, customer lifetime value, customer procurement cost ratio, MRR and ACV pipeline, customer lifetime value and average MRR or ACV per salesperson.

8. Align incentives

It is complicated to set compensation plans and develop incentives according to the KPIs. The salesperson has to be compensated according to the kind of booking (nonrecurring vs. recurring), kind of customer (up-sell vs. new), terms of payment, contract term, etc. In the same way, customer success managers have to be salaried for increasing up sales or reducing gross churn.

9 thoughts on “Tips for Developing an Effective Software Business”

  1. Hi, I am an engineering graduate and have plans to start my software business. This blog is really motivating and encouraging. I am able to understand the tips and the way it should be applied. Thanks for sharing good ideas.

  2. Lot of people give advice on starting and developing a software company. It is not a simple thing. It involves lot of dedication, hard work and commitment. If you feel really interested to start your own company, it is the best option. If not, it is best to work and gain experience first.

  3. Conducting market research helps in a great way for developing the software development business. This way, you would get an idea about the target audience, major competitors, the requirements and preferences of your potential clients. It is therefore best to analyze before stepping in.

  4. At the beginning stage, there will not be much demand since there is no product equal to you in the market. When your product gets worldwide reach, it will start to receive huge demand in the market. If the customers do not feel your product impressive, it will become a failure.

  5. Select the best method to promote and sell your software. Selling the product is the most important thing in your business. Though there will be several similar products in the market, you need to sell in such a way your competitors could not stop you.

  6. It was really interesting to read this blog. At the starting stage, most people remain confused and do not focus on anything. They would keep thinking whether their product gains good reach or not. Your ideas are helpful and remains perfect for the startups to utilize.

  7. Team is the main backbone of the software company. It is important to form a team of experienced professionals. The interview process should be tough so that you can meet and work with the experienced professionals in the software field.

  8. Ensure to focus as much as possible. No matter, you are developing a product, service or technology, you should always aim for best results. When you are able to satisfy the client requirements, you will start to easily reach the #1 position.

  9. Keep searching and utilizing new opportunities and trends. It is also important to track the profit and expenses. It is challenging to start and continue running the software company for years. Several companies shut down within few months or few years due to various reasons.

Leave a Reply