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Creating a SaaS Product the Right Way

The SaaS industry is growing at rates up to six times the average for IT enterprise in general. It’s not expected to slow down anytime soon.
This makes it an opportune moment for application developers to offer new Software-as-a-Service product lines. But like most ambitious endeavors worth pursuing, it’s seldom a straightforward journey.
In fact, introducing SaaS into your software company disrupts just about every area of business. Thus, to do it successfully requires careful planning and deliberate execution.
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A SaaS Spending Spree

Cloud-based spending has grown rapidly in recent years, and now accounts for nearly half of all IT spending, a number predicted to reach 60% by 2020.


Advice from Wizmo's SaaS Solution Experts

To save you time and trouble, we're sharing some strategic shifts your business must undergo to develop a SaaS product that performs. We've acquired this wisdom over nearly two decades of guiding software companies successfully through the SaaS migration process.


Your Development Cycle: Faster, More Frequent

With the SaaS model, customers invest in your company as much as in a particular product. Unlike on-premise solutions, the focus of SaaS goes beyond the product itself. Customers are subscribing to the promise that your company will provide fast, reliable and safe functionality today while continuously delivering valuable enhancements.


The Old Way

Traditional software companies typically spend at least a year creating, testing and distributing each new version of their products. They must ensure their new version will work on a wide variety of customer hardware.
Unfortunately, it's far too common for customers to avoid implementing updates because they're afraid something will break, costing them valuable productivity. (We've all been there before and know what it does to our blood pressure.) But as a result, these users aren't taking advantage of the application's latest software features and enhancements.


The New Way

The SaaS model changes all of this. Gone are upfront software costs, deployment, and maintenance costs. Everything is included in one predictable fee. This also ensures that every customer benefits from the latest upgrades.
And so...the nature of your product development process needs to change. The long cycle culminating in a significant upgrade once a year no longer works. Instead, the focus must be on maintaining a continuous build/deploy/support cycle geared to deliver a stream of high-value functionality on a frequent basis.

Your Sales Strategies: Reshaped

The strategic elements of marketing your SaaS product — the audience, value proposition, and schedule — are different from those used for an on-premise solution. As a result, you’ll need to do more than simply tweak your current strategy. In actuality, a bit of an overhaul is in order.

More Users = More Monthly Revenue:

With SaaS, the “elephant hunter” becomes extinct. There are no huge single sales to be had. Successful SaaS companies structure their sales departments and incentives on a volume of smaller sales rather than a small number of big sales. Like web companies, the primary focus of a successful SaaS venture is simply getting people to use the software.

Service as a Selling Point

It is critical that companies not fall prey to selling on price alone. Attractive monthly subscription pricing may generate the initial interest from a prospective customer, but customers value other benefits as well. Rapid deployment, reliability, easy updates and flexibility may be even more important to some than price. Make certain to promote all of the many advantages to the SaaS model.
The SaaS cutomer’s experience includes the speed of deployment, ease of configuration, access to support, and the simplicity of the purchase process. Marketing needs to tout the features and benefits of the entire services package, not just the product functionality.

Free Trials for the Win

SaaS demands marketing that makes it extremely easy for a potential customer to become a user. SaaS companies cannot afford to make prospects jump through hoops to become customers. Marketing must focus on immediate gratification while the product focuses on immediate value.
Free trials are essential, and the most successful companies make it possible for prospects to begin a trial by simply filling out a Web form. Any user who tries the SaaS application becomes a lead for the sales team, who can then work on converting the trial user to a permanent customer.

Online Product, Online Marketing

Gone are the analysts, conferences and huge advertising budgets of on-premise software marketing. Blogs, search words and infiltration marketing are the tools of the successful SaaS company. SaaS lives on the web. Its users do too. So that’s where your marketing efforts should be.

Your Business Processes: Reworked

As software companies transition from an on-premise model to SaaS, how they forecast and plan for revenue and cash flow must also change significantly.
The large “lumpy” receipts of cash from on-premise deployments and the annual payment in advance of substantial maintenance charges are replaced by a more predictable lower level of receipts throughout the year. Planning for this and understanding the working capital requirements during the transition period are particularly important.
Legacy vendors also have to deal with extensive organizational challenges that include: converting to a subscription license model, retraining salespeople and fulfilling a new compensation structure, replacing revenue streams, and converting customers still using the old technology.
The disruption caused by moving to SaaS means that many of the existing business processes — from on-boarding customers to billing to sales compensation — have to be examined and modified to fit a SaaS business model.

When you partner with Wizmo, your SaaS migration is
guided by experts every step of the way.

Get in touch to find out how we can help you.

No high pressure sales or hyperbolic promises.
Just real people with smart answers who want to help.