Facts You Should Know About SaaS Business Model

Starting a new business has its own set of challenges, especially if you choose to begin your business journey in the IT industry. In such a competitive and saturated industry, few things can give you an advantage over others. One of the ways to get an edge over others in the IT market is to be wise while devising and choosing your product niche. 

Apart from moving the business world to new levels of comfort and ease, cloud technology nevertheless needs the application of specific techniques and tactics to reap its full benefits. Adopting cloud solutions entails several nitty-gritty details to follow and avoid, as well as important recommendations to keep in mind. Here are a few facts you should know about SaaS business models:

1. Create Content for Your Audience

The content is the king of binge marketing. Your target audience is right at your fingers, waiting for you to convey your message and encourage them to act.

Content is a sales tool, and every successful company must have a sales and marketing plan. If you run a software as a service (SaaS) company, you’ll need a lot of high-quality content generated and authored to educate, intrigue, engage, and encourage prospects to convert.

If you ever want to fight your way to the top of the corporate world, you’ll need to generate compelling content. All businesses are well aware of content marketing and its benefits; therefore, you won’t be able to beat the rest of the world to the punch. In that circumstance, optimized and audience-oriented content is your greatest bet for gaining a competitive advantage. Content that is both well-written and unique is ideal for nurturing and lead generation.

To accomplish content marketing that enhances lead generation and marketing ROI (return on investment), it is necessary to have a well-structured and focused approach. 

Starting with the essentials, create materials that are appealing to your clients since you don’t want to leave them baffled and bored. Create material that sounds like social evidence for your service/product. Don’t fill your content with product exaltation; instead, state the advantages that your potential buyers could receive from it.

Here’s a hint: Create a customer-oriented quiz material that may assist them in recognizing what and where they are lagging in technology and identifying their pain point, then transform your software into a treasure trove of remedies appropriately and TADA! There is no longer any reason for them not to purchase your stuff.

2. Add Value for Customer’s Money

One of the major turn off for customers after bad marketing is unrealistic pricing. Yes, your product could be everything they want but unaffordable or not trustable enough to invest their money on. Hence, experiment with pricing as everyone wants to get the most value for the least amount of money, so you need to figure out what your customers are willing to spend on. 

Our next aim is to convert our leads into buying customers. Devising products and services price while keeping in mind consumers behavior and need is the best a business could do. Determining the product price after a keen survey of consumers’ needs and understanding what service your customer values could save your bucks spent on experimental products.

Offering a free trial could be your golden pick to convert strangers into your buying customers. Design a suitable offer or trial and then work on creating hype about it.

Utilize your home page, email marketing, blogs, and everything else to spread the word about your trial.

You are an unproven commodity without any trust-building with your customer; in that case, your offer for a free system drive can come to your rescue. Offering a free trial can prove to be an ideal way of converting your potential customer into a loyal client. Offering trails not only help you gain customers’ trust but also helps you improve the product’s quality and security without costing you anything.

We have a better suggestion for you regarding trials. Use an in-app user prompt to make your customers use your trial in real-time rather than just subscribing to forget about it. Also, you can use your email marketing automation to reach out to your trial users at set intervals with something as simple as “hey, did you try our XYZ feature yet. If not, go ahead; it has the golden key in your solution box”.

Transparency is highly valued by potential customers as your product and services could leave your customers scratching their heads wondering how your product relates to them, and at that moment, your free trials and eye-catching offers will regard you as a trustworthy brand.

3. Understand the Science of Metrics

There is a well-known quote of Lord Kelvin, “If you can’t measure it, you can’t improve it,” and we could not agree more. Understanding SaaS metrics to improve your business is second to none, as recording and understanding resulting facts and figures on a daily basis would help you align your management and give your team an insight to improve their practices.

Metrics are crucial in SaaS businesses; you can’t make decisions without them. It is important to identify which metrics to highlight. You must decide what important measurement is and what is not. For example, it’s not so important to know how often employees of your customers are using your application in a day. But it is important to know how many new customers are signing up after the trial period. Metrics are not about vanity but about making important business decisions.

SaaS’s valuation is driven by growth and profitability. SaaS businesses are highly sensitive to small changes in key variables, so it’s crucial to understand these specific variables to unlock growth for your business.

Growth and profitability should be your simultaneous goals; for instance, if your growth rate is sluggish, you can make it even with being more profitable and vice versa. There’s a famous role of 40 in SaaS businesses; to achieve the total sum of 40% of your growth rate plus your profitability, either you could be growing at 50% and losing at 10% per year, or you could be growing at 10% but making 30% profit.

Scalability in software or services should be one of your key priorities if you want to build a lucrative growth machine, but providing the right amount of flexibility to your software or service is easier said than done. To make your growth process scalable, it’s best to keep an eye on your customers’ pain areas regularly, then match relevant in-time solutions and sell them right away when they are needed the most.

4. Set Prices Based on Your Audience

Setting the prices right is the most important thing that will affect both your long-term and short-term revenues. Make sure not to set prices based on perceived costs but your customers’ behavior and what they value. 

Communicate with your customers and know why they are paying for your SaaS product. Sometimes, what they think about your product is totally different from what you expect from them. 

For more information on this topic, check out our Guide to SaaS Pricing Models and Strategies.

5. Can Easily be Integrated with Various Apps

The best thing about a SaaS app is that it can be integrated with multiple apps using the API strategy. This will make it easy for your customers to use your app without leaving other commercial apps and apps they may already be using. 

Customized integrations with other apps can be quite expensive; therefore, you can simply use open API to create integration without breaking the bank.


It’s important to make sure you are building a product or service that can make a scalable growth process repeatable. This is something that might be easy to say but more difficult to achieve and follow through on. When it comes to making your project grow, people within your company or employees of your start-up need to know about the different ways to practically execute what makes for a profitable growth machine. 

To attain such an ideal team, you must train your employees from time to time about changing strategies and upcoming challenges.