SaaS, the big winner of the future economy
As the COVID-19 crisis continues and questions about a re-opened global economy are debated there are some interesting points emerging that we need to take notes of. Our future economy is going to look different as a result of this and the signs are already there as to what kind of businesses will stand out. When everything shut down, tech, and SaaS, companies prevailed and helped other businesses transition to work from home for employees and serve customers from home as well. SaaS has secured its place as essential to our future economy across sectors.
Here is why SaaS will continue to grow as our economy shifts:
SaaS has unparalleled flexibility:
With no physical product, SaaS companies have an advantage of any other B2B or D2C customers in that SaaS is limitlessly flexible. Your team can add to, change, and update your product once for all customers and leads. Production time is shorter and overhead is your development team, not a physical location. Your team can make impactful changes in hours or days as compared to the R&D process needed for consumer products. With this flexibility, SaaS teams are free to meet customer demands and shifting economic demands much more quickly than other companies. You can use this to not only support current customers but gain new ones with market changes. For example, at the start of stay at home orders, Google quickly (within a matter of days) developed and released a chrome extension called “Netflix Party” where Chrome users can watch Netflix with friends and chat using a group chat stream. Users loved its timeliness and it prompted users to encourage other users to install Google Chrome to participate. Google was able to do this in a matter of days to meet demand and current events.
A business model built for remote teams:
Inherently, SaaS teams and their skill sets are built for remote work. Developers, marketers, sales people, and leaders are predisposed to work through technology together. SaaS teams were among the first to adopt the technologies bigger, more traditional companies are not using to work from home like online chats, videoconferencing tools, or task management tools, etc. The nature of SaaS digital product development and marketing make SaaS teams more flexible and tech-savvy in this sense. The type of work SaaS teams do, including marketing and sales, is more easily remote. SaaS teams are used to addressing a global market from a single location or multiple remote locations as most SaaS products do apply to a global market, not restricted by physical location.
Applicable across business sectors:
SaaS teams can pivot their product to meet the needs of different sectors. During times of crisis, different market segments may disappear (such as in-store software) and new ones may appear in their place (eCommerce supporting software). SaaS companies have the ability to adapt their product and offering to different markets and market segments depending on demand. This makes it easy to navigate crises and also discover new business segments if demand is disrupted for some reason. Teams don’t have to rely on manufacturing or store locations to push new products. Remote teams can make updates and build new features that help new customer segments and begin rolling out from anywhere in the world. They can also market and sell across business sectors and borders easily because SaaS product marketing is for the most part digital and delivery is digital. New products, new features, etc. are all scalable without development and supply hangups.
SaaS supports and attracts young disruptive leaders:
With SaaS companies at the forefront of the highest valued stocks through and between crises, it’s clear that leadership and their effect on rate of innovation are what drives tech and SaaS. Young innovative minds are often attracted to SaaS because of the boundary-pushing nature and speed of growth associated with SaaS. Some of the most watched leaders in the world are SaaS founders and CEOs. SaaS also attracts young disruptive leaders because it has the potential to dramatically shift our way of life beyond tech. It’s exciting and those with big ideas want to be involved in creating technology that changes the status quo. In addition, tech VC firms and investors as well as the general public are interested in backing the next greatest technologies. SaaS IPOs have been highly anticipated within the tech community and beyond as the long term value of these products and their teams continue to be recognized. A huge draw of SaaS for both leaders, investors, and employees is the scalability and reach. SaaS is one of the only sectors that really has the ability to grow exponentially when positioned correctly to serve customers and provide value.
“Life is too short, so let’s do everything we can today to help people now.” – Twitter and Square Co-founder Jack Dorsey, after donating $1B of Square equity using Square’s Start Small fund in response to COVID-19
Subscription and self-service:
What’s great about SaaS products is that you can essentially productize an on-going service and make that scalable, enabling your team to sell to hundreds of businesses of any size and consumers. You can avoid complicated, demanding, and time consuming custom corporate contracts when you create a one product everyone can buy a subscription to. The subscription model allows SaaS companies to scale and bring in more customers while still making money off your customer based month over month. It also helps out customers because they can choose to continue to pay for the value of the product for as long they want without complicated contracts. With this lower barrier to entry and commitment, it’s easier to get initial sales and sign ups. Additionally, SaaS companies can choose to offer varying levels of service and features for different pricing options, allowing customers to take a “self-service” approach to their use of a product. This way, SaaS companies can upsell and cross-sell and give customers the flexibility to scale or contract service as they may need through uncertain business times. This kind of flexibility and value-based pricing wins customer loyalty and doesn’t ride on a make-or-break contract.
AI and automation easily integrated to scale:
SaaS companies, with self-service and an entirely digital sales process and product, have the unique opportunity to employ different tools for marketing and sales to automate them. SaaS companies focus most of their marketing efforts online in targeting their specific customers across segments (there are often more than one) and utilizing AI tools to help with more accurate targeting and automation to take care of at least part of the sales process helps SAaS companies scale easily while saving time and money. Tools like ad retargeting and automated, AI-supported B2B sales lead sourcing help cut the time and effort it takes to drive and convert leads. Outside of the sales process, SaaS companies can incorporate AI and automation into their actual products to better serve their customers and make support feel a click away online. This way, a small team can support a large customer base while maintaining customer satisfaction and loyalty. Chatbot tools with AI-delivered answers can help SaaS teams take care of customer questions on their site and within their product. Other tools like Beamer help SaaS teams keep users in the loop with in-app and on-site updates with web push notifications for new features, updates, bug fixes, etc. These tools also help boost engagement and make customers feel they are supported and their needs are being met by the team, keeping them paying customers for longer.
Supporting customer success outside of the product:
A position SaaS companies have taken on over the last few decades is that of an informative, authoritative, and trusted source for companies, small and larger, who are digitizing and in new waters in terms of using technology to better their businesses. SaaS companies have become a source of advice and best practices for using SaaS tools to improve internal and external business processes. Take a look at Hubspot, Mailchimp, Shopify as examples of companies who have a huge presence online in the form of helpful content that users, sometimes not even their own, research and read everyday for help. This puts SaaS companies in the right place to be a source for solutions during times of crisis and an easily understood and trusted source for companies to learn how to enter the future of business. As business continues to adapt to our new economy and businesses continue to be pushed to more digital reliance, SaaS companies will likely continue to become a more trusted source for teams learning to navigate the future economy.
SaaS has become the backbone of so many B2B and D2C companies of all sizes. The more global we become and the more consumer habits shift, the more companies and individuals will rely on SaaS to connect with customers, connect with teams, improve processes, and stay a competing part of the swift-moving global economy. The demand for SaaS for all areas of our businesses and lives will continue to grow and with new segments of demand appearing all the time, there is no better time for SaaS to thrive.