1. Great SaaS businesses charge for their service
Sentiments like “the future is free,” “we’ll all from ads,” “VC money will get us there,” “acquisition is nirvana” are short sighted and frankly, lazy. Online advertising is getting completely saturated. Google is very difficult to compete with. AdSense as your only revenue stream is BadSense. VC doesn’t want to hear about advertising as a sole revenue stream anymore.
If a service is valuable, clients will pay for it. If it can’t be charged, it probably isn’t valuable.
Think about that. Think long. Think hard. Don’t invest frugally.
2. Great SaaS businesses foster and maintain trust
It is a pretty scary proposition for a client to entrust your business with their valuable and confidential information. It is equally scary that the more information they entrust you with, the more locked in they become. This is a big subject, but getting prospective and current clients to trust the service (and maintaining that trust) is a core competency of the great SaaS businesses.
Also, foster and trust your employees, whether they work on-site or virtually.
3. Great SaaS businesses evangelize their value
I spoke about offering value above. Great SaaS businesses let everybody know, in every possible way, that they offer bottom-line value.
4. Great SaaS businesses segment and understand their market
A SaaS application in use will have numerous stakeholders/users. A great SaaS business understands the needs of all service stakeholders and ensures they are addressed appropriately.
5. Great SaaS businesses understand buying behavior and the current status of SaaS
In terms of new technology/product adoption theory, the majority of customers are “Pragmatists” and “Conservatives.”
In the current SaaS scenario, SaaS buyers are “Visionaries” or “Early Pragmatists.” The good news is that SaaS is becoming increasingly mainstream, i.e. “Conservatives” will come on board sooner or later.
What this means for great SaaS business is that they understand the buying profile of their target market. For example, if you are about to launch to a target market whose buying profile is predominantly comprised of “Conservatives” or “Skeptics” you are going to have a tough time. You’d be advised to wait a while.
6. Great SaaS businesses understand that they are selling a service, not software
Buyers of SaaS are often fed up with software products. They need a business result. Great SaaS businesses understand this and sell business results as a service. The software product simply enables their ability to offer that service.
7. Great SaaS businesses improve continuously
SaaS enables the ability to make frequent software enhancement releases with minimal end user disruption and cost. Great SaaS businesses fully exploit this reality and thus give their clients a tangible sense of ongoing value.
