Developing a Business Case for Your SaaS Solution

February 7, 2013

Making the Business Case for your SaaS Solution. Picture courtesy of Intel

Steps to Developing a Business Case for SaaS Solutions

Last week, I discussed the factors that stakeholders consider when choosing a specific SaaS solution. This week I want to discuss how to build a business case for your solution when presenting to customers.
There are a few approaches depending on the product you are selling. Ask yourself two key questions:

  1. Do you have to sell the customer on a specific concept or technology?  Ex: Transitioning specific functions to the cloud, adopting a new technology, or controversial changes such as outsourcing entire IT functions.
  2. Are you seeking to just differentiate your offering from that of your competition? Ex: If the vertical you are competing is sold on the promise of the cloud, then you can put most of your emphasis on the value proposition of your product.

If your answers to 1) and 2) are both “yes” then you will have to structure your business case differently. First, you need to to sell the concept you are proposing. Then you will have to illustrate the potential benefits and value proposition for your solution.

Establishing the Business Case for Your SaaS Concept or Technology

Your pitch should include the following elements:

  1. Illustrate the pain points your customer is experiencing: Outline what the issue is and how it negatively impacts your customer’s business. If possible, assign a cost in terms of productivity lost or dollars.
  2. Establish credibility: Demonstrate the endorsement of thought leaders or prominent researchers behind the technology to lend authority to your product or solution.
  3. Address any concerns: Your customers may be wary about making a leap of faith on an “unproven” or “new” concept. This could come down to addressing concerns about reliability, transition plans, and/or post sale support.

In many of the customer interviews I’ve conducted, the chief selling point and differentiator of a “new” product/solution is the strength of the account team and customer service.
Customers can be convinced to take a leap of faith on a new technology, as long as they have confidence in the account team and the strength of the technical support team standing behind the product. It’s the secret of German luxury carmakers that has allowed them to stay at the top of the heap even though their Japanese counterparts surpass them on quality.

Establishing Your Value Proposition and Competitive Messaging

If your prospect is sold on the technology, the next battle is convincing them your product is the way to go. Make sure your pitch includes the following:

  1. A head-to-head matrix on your product versus the competition: This should include pricing, features, and/or technology used. B2C technology companies and automakers do this to great effect. If you want to avoid the competitive angle, just lay out the best attributes of your solution for this step.
  2. Key endorsements: Include testimonials from satisfied customers, industry thought leaders, and honors from third party research firms (Gartner’s Magic Quadrant is a good example of this).
  3. Include real world examples of your product in action: What pain points did it address? What cost savings or benefits did the product provide? Provide some examples on how the implementation went and how your company helped the customer deploy the solution.
  4. Your approach to customer service: As discussed above, customer serivce can be a major differentiator. This is especially true if you are in a market where solutions are perceived as similar (Comcast’s Xfinity and Verizon FIOS are good B2C examples of this).

Following the approach laid out in both sections can go a long way towards making the best case possible to your prospect. By doing so you will address the technical, practical, and qualitative dimensions that factor into how an organization chooses a solution.

Are there any other factors one should consider? Let me know in the comments below!


Corporate Strategy, Sales Operations

Sudip is in charge of Corporate Strategy, Sales Operations at <a href="">Alegeus Technologies</a>. Previously, he worked at OpenView from 2012 until 2014 with portfolio companies to provide insights on the markets they operate in, their customers, and drive development of business strategies.