10 Mistakes Executives Make When Launching an SaaS Company
SaaS companies are profitable, no doubt, which is the reason why they’re growing in numbers. However, the fact of the matter is that there are a number of mistakes that new SaaS companies suffer from. Here’s an account of some of them:
Operating Like A Traditional Software Enterprise
A SaaS company cannot hope to follow in the footsteps of the traditional software enterprises. Why? Well, it’s because SaaS companies don’t rely on the selling of software; rather they depend upon recurring revenues. Therefore, it is imperative for them to closely monitor their revenues and expenses, unlike the traditional software enterprises. Minimization of fixed costs should also be a major concern.
Not Thinking Outside the Box
The problem with consumers, over the years, has been that they tend to stick to the traditional software without feeling the need to incorporate the gifts of modern technology into their practices. Due to this reason, SaaS companies often tend to offer the same old technology to the consumers without thinking outside the box. This is one of the biggest mistakes that can be made, for it closes the doors for growth.
It does not mean that every business is a unique snowflake; rather what it means to say is that what works for one business might not work for the other, even in the same industry. Why? Well, it’s because different SaaS companies offer different software as services. This is the reason why a new SaaS company should not blindly copy a thriving SaaS company’s business model, without giving it a thought at least.
Not Categorizing Customers
One of the biggest mistakes that SaaS companies can make is to have the same price for everyone. Why? Well, it is because pooling ALL consumers into a single category is not a realistic option. Think about it: how can a business categorize two consumers, with different budget constraints, in the same category? It is recommended, therefore to offer services in packages that vary in accordance with the price. This will encapsulate a larger customer pool.
Hiring the Wrong People
This mistake stands for not only SaaS companies but companies in other industries as well. In the initial stages, business owners, literally, rush into the unemployment market and hire employees to take care of the operations of their businesses. What’s the problem with this? Well, the problem is that they don’t put much thought into who they are hiring, for they are more concerned about filling the vacant positions to kick start their operations.
Neglecting Human Power
The other extreme of the above stated possibility is that the SaaS company might put too much emphasis on technological platforms and ignore the importance of manpower altogether. Regardless of how much the technology might advance, the fact of the matter is that the utility provided by quality human labor cannot be replaced. For instance, you need capable human resource to make the most of technology, right?
Ignoring the Customers
If you think about it, it’s pretty easy for a SaaS company to get busy with their shenanigans and ignore the people that matter the most: their customers. SaaS companies NEED to focus on catering to the needs of the customers and ensuring that they are provided the highest possible standards of customer service. Remember: regardless of the nature of your business, it’s your customers who’ll keep you running!
The importance of marketing cannot be stressed upon enough for a SaaS company. Why? Well, it’s because a SaaS company might have the best kind of software and services to offer to its clients, but for the company to make profits, it’s imperative for the consumers to know about those services first, right? SaaS companies that don’t invest on their marketing campaigns fail to take flight. Remember: the people need to know!
Ignoring Content Marketing
Speaking of marketing, the fact of the matter is that the art of marketing has evolved over the course of time. It wouldn’t be wrong to say that content marketing has become a major part of the marketing of today. It’s essential for SaaS companies, therefore, to have a blog that will not only generate customer leads but ensure that the name of your business is known far and wide, especially among the relevant audience.
Neglecting the User Communities
While you’re at it, ensure that the customers are able to get the most out of the software and services that you’ve got to offer. It will do wonders for the purpose of customer retention.
So, are you looking to launch a SaaS company? Remember to keep your distance from these common traps!