Author: Zoe Stimpson

Many software as a service (SaaS) startups want to increase their sales focus on attracting new customers.

While increasing your customer base is important, getting a sale from someone who’s not familiar with your company is hard work. Not only is it hard work, but it also costs a lot of money. In fact, i t can cost five times more to attract a new customer than to keep an existing one. But if you focus solely on keeping your existing subscribers, how does your SaaS company grow its revenue?

The answer is that you need to increase the average revenue per user (ARPU). Average revenue per user is simply the measure of revenue generated per customer and can be calculated by dividing your total monthly revenue by the number of paid subscribers. So, the real question is: How do you get more money from your customers who are already paying?

Here’s how to increase the average revenue per user for SaaS.

Introduce Variable Or Scalable Pricing

If you’re just charging subscribers a flat monthly price for your software, then you need to introduce variable or scalable pricing. Flat pricing is great when you’re just starting out and trying to attract your first users. But once you’ve got a decent-sized customer base and want to increase ARPU, you need to introduce pricing that allows your company to grow alongside your customers.

For instance, Evernote Business uses variable pricing, charging per user. So, a customer can sign up for the lowest-priced plan for one user, but when they need the ability to add more users to the account, they can upgrade to a higher-priced plan.

Alternatively, you can introduce scalable pricing. Scalable pricing is effective because it allows you to capture more revenue from the customers who can afford it without scaring off smaller customers who can’t afford the higher prices. We use scalable pricing at our company. For instance, our cheapest-priced plan is for users who get 5,000 page views. As our customers grow their websites and traffic, they upgrade to a higher-priced plan for increased page views as well as access to advanced features. – Read more

The SaaS industry is laden with products, from martech to accounting software to ecommerce platforms, and surviving in this hectic industry is no easy feat.

Products with a healthy product-market fit have a good chance, but outside of their core features, there’s one key to success — and simultaneously, to failure — that every SaaS company should be concerned with; Price.

Thus, the cost of the SaaS membership, as well as the design and presentation of the pricing page itself, is paramount. So much so, that a 1% improvement in price optimization can result in 11.1% more profit.

In this article, CMSWire leans on the expertise of SaaS professionals to find out why.

Common SaaS Pricing Models

Before we get into specific pricing strategies and tactics, let’s understand what the pricing models are. The most common SaaS pricing models fall under the following three categories, and many companies use more than one in their overall pricing strategy.

1. Tiered Pricing

Matthew White, CEO of Qebot, believes the pricing models most “common these days are subscription based models using month-to-month billing with a typical option to pay for a year at a time up front for a discount.” Tiered pricing allows SaaS companies to offer multiple packages at price points that make sense for their potential customers.

If SaaS companies keep tier offerings simple, they can appeal to many types of potential customers. It may also be easier to upsell, as customers may perceive greater value from a higher tier than the one they initially intended to get.

2. Usage-based Pricing

Manan Shah, co-founder and CEO of Recruiterflow, considers the most common pricing model to be usage-based. He says this category “covers almost half of all the pricing models seen in [the] SaaS universe.” This category, he explains, “is also generally divided [into] two axis — Features/Storage or Users.”

• Features/Storage: This pricing model is useful for SaaS companies with a quantifiable product because it lets SaaS companies closely correlate their prices with the customer’s revenue. SaaS companies can make sure they’re charging for the increased value they provide as their customers grow. White says this “would be like an email marketing company charging on how many [emails] you send per month, or a hosting company charging by how much space and computing power is being used.”

• Users: With a user-based pricing model, SaaS companies charge by the number of licenses, or user accounts, that a customer purchases. The simplicity of the pricing model makes it easy for sales teams to explain to potential customers, and it’s also more straightforward to forecast recurring revenue. The ability to increase revenue is only limited to the adoption rate of the SaaS product itself. – Read more

C2C backup is growing in popularity, so what is it, and how can it help your business if the worst happens?

My company helps businesses manage their software investments, so we spend a lot of time educating customers about maximizing the value of their relationships with software vendors.

Even though cloud-based subscription software (also known as software-as-a-service or SaaS) has been around for decades, I find that many businesses have not yet developed a strategy for obtaining the best value from these relationships.

That’s despite SaaS becoming the go-to model for new software adoption for many organizations. Research from Gartner, Inc. predicts SaaS revenue will grow more than 17% this year, creating the largest segment of the cloud-based market, ultimately worth a projected $85 billion.

Moving Toward A SaaS-Dominant Future

This established foothold will only continue. Even the providers of enterprise on-premise software (the predecessor to SaaS) expect an eventual 100% transition to a cloud-based model. “We have a big existing on-premise user base and I believe all of them will move (to the cloud),” Oracle CEO Mark Hurd recently noted.

With the business software market moving quickly towards a SaaS-dominant future, business leaders who manage these technology resources should understand how to create more value from SaaS tools by maximizing their relationships with SaaS vendors.

Here are a few of the questions we encourage our customers to ask when they interact with SaaS vendors. We find these questions add value to the relationship, help identify risk and provide customers with a better understanding of what they’re buying.

How Does My Company’s Data Stay Protected?

Data breaches cost big bucks. In the United States, breaches cost companies nearly $8 million on average. As more firms become reliant on SaaS tools, it’s important to know that each tool you add to your portfolio becomes a potential linchpin for a new breach.

While your IT team may dutifully carry out industry best practices for data compliance, safety and cybersecurity, lines of business (LOBs) are overtaking IT as the primary purchaser of technology, including SaaS. According to ComputerWeekly, analyst IDC projects that LOB technology purchases will overtake IT budget spending in 2019, increasing the likelihood that IT best practices won’t be carried out.

If and when you become aware of new SaaS tools used in your organization, vet them thoroughly. How is data stored? What certifications do they hold? What standards have they received accreditation for?

If you’re processing payments information, I consider protocols like PCI DSS a minimum requirement. Another standard to consider is SOC II, which covers best practices and processes for five major areas for SaaS providers, including privacy, confidentiality, security, processing integrity and availability. No matter the vetting procedure, your first question for a SaaS vendor should concern how to protect your data’s integrity before, during and after the relationship. – Read more

Software and Software as a Service (SaaS) marketing is, not surprisingly, garnering more attention as spending on SaaS continues to rise across companies of all sizes. In fact, Blissfully notes in its 2019 Annual SaaS Trends Report that the average company spend on SaaS in 2018 rose 78% over the previous year. They also report that companies saw nearly 40% of their SaaS stack change last year.

Fueling this volatility in organizations’ SaaS stacks are a wider variety of SaaS options to choose from and the fact that decision making on which tools to use is increasingly becoming decentralized to individual departments. Given this dual environment of opportunity and volatility, software and SaaS companies that want to gain more customers and keep the ones they already have need to make sure their marketing machine is hitting on all cylinders.

In this post, we look at four factors and best practices in software and SaaS marketing that help companies and solutions rise above the rest.

1. Define and commit to your content strategy

As prospects evaluate SaaS alternatives, they seek out answers and information to guide to the right destination. An effective content strategy creates a framework where you can, and do, provide these answers at every step of their buyer journey, from awareness to consideration to decision. It’s easy for organizations to say “we can’t create all the content we need” or to not maintain a steady cadence of new content, but successful SaaS companies make content a priority. When you’re not there with answers and information as prospects seek them out, it’s likely that a competitor will be.

Although we note the buyer journey stages of awareness, consideration and decision above, it’s also important to recognize the post-purchase role that your content strategy plays in retaining customers. Use newsletters, blog posts, knowledge bases, webinars, videos and other content to share success stories, offer usage tips and tricks and to highlight new or forthcoming features of your SaaS offering that will benefit them. Your goal is to reinforce their trust in your solution and to build champions of your brand. – Read more

Establishing a startup requires a lot of time and money.

If you are planning, or have already, opened the doors to your small business, you’re probably finding yourself working long hours trying to keep your startup running smoothly. It normally takes a few years to fully get into the swing of things, but if you want to make operating your business a little easier, you’re going to need to invest in the right technology.

Previously, many startups needed teams of developers and IT professionals to maintain server rooms for applications and websites to run efficiently. This cost many new businesses a lot of money, and time, they didn’t have. Thankfully, cloud computing has taken over these expensive and demanding tasks so business owners can focus on the bigger picture. If you’re looking into cloud computing services for your startup, here’s where you should begin!

Device as a Service (DaaS)

Device as a Service, also called DaaS, takes over the need to manage all of your company’s devices, such as a desktop or tablet. Instead, with DaaS, startups will have access to cutting-edge software, email, data storage, applications, and online backup. DaaS is able to host the entirety of your company’s desktop computing on a Cloud Service Provider, giving you and your employees more time and freedom to work on important tasks and projects.

DaaS will also save your company time and money by identifying viruses and malfunctions before they can infiltrate into your system and crash your computers. Troubleshooting early will boost productivity and ensure all data is securely stored at all times. Even better, you can choose different DaaS plans based on your startup’s needs. – Read more

For some business owners and professionals, the cloud is still a bit of an abstract concept.

You may have a general sense that the cloud could help your business in some way, but have questions about security, cost, and how it all works.

The first thing to understand is that the cloud is a “way” not a “place.” The cloud refers to software and services that run on a vast network of servers around the globe accessed via the internet, instead of locally on your own computer or servers. This system provides a means of storing and managing data and files, running applications, accessing email and hundreds of other possibilities.

In fact, chances are your company already uses a cloud-based app or service even if you don’t think of it that way. Most cloud services can be accessed through a web browser like Edge, Firefox or Google Chrome. Any service you log into online and that isn’t stored on a machine you own — such as SalesForce, Dropbox, OneDrive, Gmail — is an example of using the cloud. – Read more

According to recent research, over 80% of workloads will be on The Cloud by the year 2020.

And while this might seem foreign for those who are still using pen and paper, you might want to consider switching over to the other side.

Let’s take accounting for example. While there are students working tirelessly in order to get a degree in accounting, we can’t help but notice that there has been a change in the accounting world.

Cloud accounting has effortlessly taken over small businesses. Because this kind of accounting offers the same services as traditional accounting, more businesses are turning to it.

Are you running a remote business? Cloud accounting might be your best bet. Here’s everything you need to know.

What Is Cloud Accounting?

It’s no secret. Within the last 10 years, there has been a rise in the use of digital technology. And while it may seem like this only pertains to social media, your workplace is not exempt.

Cloud accounting is looked at as a digital form of traditional accounting. While cloud accounting can be tailored to any business, it is mostly used for remote companies because of convenience.

How Can Cloud Accounting Help My Business?

Fortunately, cloud accounting provides outstanding benefits for companies that are looking to save money and organize their accounts.

Time Efficiency
First on the list of cloud accounting benefits is its ability to save your employee’s time during their workday. Because cloud accounting programs are designed to increase efficiency for your accountant’s workflow, they will be able to spend more time on other tasks. – Read more

According to Gartner research, by 2020, all new entrants and 80% of historical vendors will offer subscription-based business models.

The challenge, says Ryan Barlow, Chief Information Officer at e4, is navigating the change management challenge for effective deployment of SaaS (software as a service) within organisations.

He says e4 recently completed its own migration to Microsoft Office 365 and Microsoft Dynamics 365, which was a success thanks to careful planning and addressing the change management component of the process: “According to Gartner, addressing SaaS change management is ranked among the top five SaaS challenges for technical professionals. This is easy to believe when you consider the unique nature of SaaS and the resulting challenges that emanate when implementing. There is a clear need for new change management strategies for SaaS to be successfully implemented,” say Barlow.

A lack of trust at the outset needs to be addressed. Moving confidential company information into a cloud, effectively off-premises, is not exposing the company, nor does it increase its risk: “We need to gain a better understanding of the benefits this approach brings as opposed to simply focusing on the perceived risks. IDC predicts that 60% of cloud spend by 2020 will go to SaaS deployments. The trend is there and if businesses want to reach their full potential and compete effectively, transitioning to SaaS is essential.” – Read more

Native cloud operations can have a steep on-ramp in terms of enterprise IT readiness, but some things are relatively easy to port to a tier of storage in the cloud

But not all cloud technology is easy to integrate into existing, traditional (on-premise) infrastructure; so if we want to take advantage of the cloud, how do we do that without major upheaval?
In this article, we will explore the areas of IT that are most easily moved to the cloud, such as backup, tiering and data sharing.

Where cloud can help
The need to deliver with speed, at scale and while reducing costs are common challenges many of us face in our enterprise.

These are often difficult to achieve with more traditional approaches, but this is where cloud excels; with scale, agility and flexibility – so how can we use it to meet enterprise demands?

Why not native cloud?
While our existing technology may restrict our ability to do all we want to do, it is deeply built into in the way we operate.

But shifting to native cloud services – in other words, those that were built for and run in the cloud – is not a trivial task, and may require the rewrite of applications, workflows and retraining of staff. All of these cost time and money, and have the potential to introduce risk.

However, integrating cloud technology with familiar enterprise technologies can help simplify use of the cloud, and allow us to more easily and widely adopt it.

Cloud fixing enterprise problems
How can we best use the cloud to integrate with and enhance existing datacentre functions?

In this section, we will look at some areas of datacentre functionality that can be most easily ported to the cloud, often as hybrid operations with the use of the cloud as an adjunct to on-premise working.

Cloud as a tier
The ever-increasing amounts of data we hold are a real challenge. As well as production data, there are also backups and other “cold”, infrequently-accessed data.

Where to store different classes of data, so that it is held on the most cost-efficient tier – including on-premise or in the cloud – presents a real technical and business issue.

Questions that arise include: how do we size accurately and easily grow our capacity on demand? How do we manage our data so that backups and infrequently used data do not consume expensive production tiers but remain accessible?

The idea of tiering data to lower cost disk is not new, but cloud storage with its scalability and commercially compelling pay-as-you-use model has created the almost perfect long-term repository.

Major storage suppliers have recognised this, and are now starting to integrate a cloud-based tier directly into their production arrays. For example, NetApp’s FabricPool allows its ONTAP operating systems to move data from production into backend cloud, doing it invisibly to storage teams and users alike.

It’s not just the major storage suppliers either. Microsoft’s Azure File Sync service integrates a similar idea directly into Windows Server.

This technology is not without challenges. Cloud costs and the performance impact of retrieving data from a cloud repository must be taken into account, but the benefit that a cloud storage tier delivers make it worthy of consideration. – Read more