SaaS or Software-as-a-Service is a software licensing & delivery model in which software, hosted on cloud platforms, is made available to end-users on a subscription…
Software-as-a-Service or better known as SaaS products are increasingly in demand more than we think. Netflix, Slack, & Google Apps all have one thing common in them and it is their business model, which is based on the SaaS model.
SaaS-based products offer convenience, economy, simplicity, and many other advantages. And thanks to all these benefits of this technology, SaaS-based products are winning the hearts of people. Furthermore, SaaS is easy to scale and can yield predictable revenue that further wins the heart of new-age entrepreneurs.
For these entrepreneurs, coming up with a successful SaaS-based product that people will love has become significantly important. Before we start on the same, let’s quickly recap what is SaaS.
What is SaaS?
SaaS is a software licensing & content delivery model hosted on the cloud platform to make it available for end-users over the internet. ‘Tis a software sales model where a vendor develops and manages the web application and enables users to access that over the internet. SaaS products are developed using cloud computing models.
Market Shits with SaaS-based products
As per Synergy research group data, the SaaS market in Q1 of 2019 generated over $23 billion in revenue. Moreover, SaaS is expected to grow to become over $141 billion market in 2022. This wasn’t the case five years ago and the growth of online businesses was mainly focused on eCommerce & entertainment.
This immense growth of SaaS-based products acted as a catalyst for bringing the market shift in classical software licensing schemes. Thanks to that, we have entered a completely different era of software products. Today, there’s no need for the purchase of software as well as hardware for its deployment. The best thing is it does not need to be maintained for performance; the vendors will do it themselves.
How to Come Up with a SaaS Product Idea that People Will Love
Transactions are at the very center of any business. There is no way to get something without giving anything out first. Without fulfilling the unmet needs of your customers there’s no way to get new signups every day. To achieve a breakthrough in the SaaS market, your journey starts at coming up with a SaaS product idea that people will love.
1. Validating the SaaS Idea
The first thing to note is SaaS products must have some authenticity. Nobody wants to invest in a product that turns out to be not that exciting for the end-users. And it is not worth putting in efforts and hard work into creating something that nobody wants to use.
The vital part of developing a SaaS-based product is how it will ease the lives of your users and make them pull out their credit cards, fill in the form and subscribe to your online service. And for that, you must get started with the solution that you would bring out for the world that people love or at least feel nice to have.
Any expert on the subject will always recommend what we are going to suggest here. Always start with the pain points of your potential users. Come up with a solution for the problem you face or someone in your industry faces. Finding an acute problem and giving out a solution for the same will pave the way for your extraordinary growth.
To better understand the pain points of the audience, you must talk to them, establish communication, connect with them emotionally. Make a list of problems and ask if they face any of them. Once you have cracked the idea & validate it, move on to the MVP (Minimum Viable Product) development.
2. Choose Developers for Your SaaS Products
Choosing the right developer for building your dream SaaS-based product is as important as coming up with the idea that people will love. Hiring SaaS developers is not like hiring developers to grow your existing business by developing a website or app. Here, the SaaS is your business.
So, with the help of ironclad SaaS developers, you will be able to launch faster, save time, get quick feedback, so that you can improve your SaaS and generate more revenue. Searching on Google will provide you ocean wide choices to choose SaaS developers, but you must choose developers with these criteria in mind:
- Transparent SaaS Development Process: Developers you hire should be in regular touch to report small milestone accomplishments. Their team must speak in a language you understand so that streamlined and transparent communication is maintained.
- Experienced in Data Management System: SaaS product development requires an experienced team of developers. Because it separately serves users from different places within a single application having the same configuration for all. And the only apt team of developers knows how to isolate subscribers from each other.
- Skilled in Online Payment Integration & Processes: You need a team skilled and experienced in different pricing plans, handling a number of users and process their payment, track resources spent.
- Have a Better Understanding of SaaS Architecture: SaaS products may have different logic or the same, but the data would have different architecture. And developers you hire should have a better understanding of SaaS architecture.
- Provide Frequent Updates: After you launch your SaaS product, you’ll start to get feedback from your users. At this moment, it becomes important for you to provide updates based on the changes required by your users to sustain them. And your developers must be able to provide frequent updates.
3. Get Your Analytics Right
You have found the perfect market fit, developed the MVP and final SaaS application; now it’s time to get your analytics right. Analytic figures are important to measure the conversion rate, revenue per customer, etc. Here’re some of the main metrics to pay attention to:
- Monthly Recurring Revenue: This metric changes from month to month based on your existing & new customers. It is the most significant metric that every SaaS product owner wants to improve.
- Churn: Churn means the lost customers.
- Average Revenue Per User: ARPU denotes the average revenue from a user over the life span of that user with your SaaS-based application.
- Customer Acquisition Cost: This metric tells you how much you have invested to acquire each customer.
Through the combination of all metrics, you may know if it’s time for you to scale your SaaS-based product or not.
4. Focus on Your Customer Needs
While the SaaS product is under pipeline, you may make the mistake of only considering your own point of view of how your product should be developed. This may turn out to be an unsuccessful venture if you don’t have the brain to the likes of Steve Jobs. Instead, what you should do is develop your SaaS product by evaluating the point of view of your target audience.
Ask them yourself and let them send their feedback and then mold it in a way that makes sense out of it. You don’t necessarily need to launch a free beta version to get feedback. You’ll get the best feedback from your paid customers and then focus on making changes to your SaaS product to make it even better.
5. Give a Thought on Coming Up Lucrative Pricing Strategy
Pricing of your SaaS product can have a huge impact on the success of your application. As the new customers are sensitive to the pricing of the product, you must provide them ease to up or downgrade anytime they want. What can be worse is not providing the right plan for customers, which can result in customers wanting to churn. It’s always better to have customers who may even downgrade than churn.
There’re also the existing customers you have to think about. Launching new products in a certain interval is a must to keep them engaged with your products. And increase your price by a margin that doesn’t impact your customers vastly but improves your net revenue.
As the SaaS business model is gaining significant popularity because of the immense advantage it offers. There’s lot of things that go into crafting a stunning SaaS-based product and a lot of thing startups have to pay attention to. And the apt team of SaaS developers at M-Connect Solutions can help you shred some stress of building a state-of-the-art SaaS-based product.
Contact us to get started with your project from the safest hands available.
About Hemant Parmar
Hemant Parmar is an eCommerce expert and a keen Magento consultant who specializes in meeting the needs of businesses in the e-commerce space. Years in the eCommerce market make him a perfect choice for sharing his expertise on eCommerce and Magento 2 development. He believes that customers need to be met no matter how challenging it might be.Read More