SaaS Business Growth Strategies

October 26, 2010

SaaS business growth strategies all share the same fundamental principle: deliver a service that stands out from the competition and get/keep/grow as many customer relationships as possible.

SaaS business growth strategies

Seems obvious, right?  So why is it that so many companies are trying to conform to some kind of packaging standard?

These orthodox moves are characterized by regimenting pricing and contracting models, lacking professional services in the whole product, skipping a rich and usable client interface, and more.  This is especially troubling because these companies are working in an innovative industry and, instead of embracing this overarching premise, are sequestering themselves in a SaaS box.

Work outside the box—don’t be a SaaS militant

First you need to determine your most attractive target market segment, devise a goal-addressing strategy, and then build the best whole product possible to serve this market.  This revised mode of thought and approach might include one or more of the following:

  • Go without contracts (other than a EULA) or multi-year contracts, even if you prefer annual contracts.  You may also need to alter your billing plans and switch to a monthly model.  This will help reduce your company’s sales complexity, which then increases your service’s appeal.
  • Provide professional services such as product training or installation, even if self-service is your current preferred method.  This hands-on approach improves customer relationship building and management, and could create a positive reputation for your company.
  • Ditch the idea that your SaaS product lives in a Web browser—products need to have a rich client interface for desktop and mobile devices.  Having a mobile Web-ready product and site is important, especially since smartphones are set to overtake feature phones sometime in 2011.
  • Though cloud computing and storage is the wave of the future and could render on-premise product availability moot, it’d be wise to have this service available in the meantime, just in case some of your clients haven’t adopted the cloud yet.
  • Similarly to the point above, given technology advances and the current hands-off approach to SaaS sales, implementing a field-based sales team has benefits outside of channel sales, inside sales or pure Internet sales.

Making these kinds of changes—some of them perhaps a little drastic—can be a difficult for a SaaS militant.  All of us have our favorite business and delivery models, after all.  But remember: it’s not your company who decides how SaaS should work, but rather your customers that are paying for your service and using it every day.  You can still have your ideal model and test out new approaches that are more in line with your notion of the ideal from your company’s perspective.

Founder & Partner

As the founder of OpenView, Scott focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest in application and infrastructure companies, and businesses that are addressing the next generation of technology, including SaaS, cloud computing, mobile platforms, storage, networking, IT tools, and development tools.