Many things must go right for a SaaS business to grow and scale. On the flip side, all those things that must go right tend to go wrong. Scaling a business in the software service field is complex. Technology evolves fast, the market is highly competitive, and the customers are becoming more sophisticated and demanding. However, with vigilance and conscientiousness, you can scale your business in ways that the competition cannot.
The best place to start is to learn from the mistakes of other entrepreneurs. Here are the three most common mistakes SaaS businesses make today that you should avoid for smooth scaling.
1. Failing to Research the Market
If you want your SaaS business to grow, you must understand your target niche market. As a software service provider, you must understand the needs of your target clients, their likes and dislikes, and what they are willing to pay for what you offer.
Market research should be the first step in expanding any business venture. Many entrepreneurs, having made a killing in a particular market or with a specific product, often make the mistake of trying to replicate the exact same techniques in another market or with a different product. To reach a new market, a SaaS business owner must know three things about a new market.
What the market:
- strives for
- cares about
- worries about
Create new customer profiles and user personas by aggregating the responses of between 30 and 50 potential customers. This will help you market the right product through the right channels and sell more services quicker.
2. Using the Wrong Sales Process
Many SaaS businesses, when they start, often worry that not enough people may get to know about their product. However, after a few months or years in the business, and the product is doing well in the market, the need for more leads will arise. These leads must be sold at once, and most will require a lot more effort to convert than most software company founders are willing or available to invest.
Setting up the right sales process is key to a high conversion rate, especially in a new market. Considering that you only have one chance to get scaling right, you must perfect the sales processes that actually close deals.
3. Hiring Salespeople too Early
Get the product right, and you will not need to sweat so much trying to sell it. Your business already has the resources to create a winning product. You must never sabotage this by diverting funds to paying a salesperson before you have the funds for it.
Most SaaS companies barely need a salesperson during the early stages of the business. It is advisable to establish a structure for the sales process first and make sure it works. When it does work, all you will need to do is hire an expert to do the closing at a fraction of the budget.
Using the Right SaaS Reporting Tools to Attract Investors and Scale
Every SaaS business is founded on and thrives on raw data. However, raw data does not make any sense on its own, which is where analytics and reporting software come in. These tools can generate actionable insights from raw data, helping fuel growth and scaling decisions in a SaaS business. Investors also heavily rely on reports from these analytic tools to decide whether a business is worth their investment.
There is a wide variety of analytics and reporting tools in the market today. Therefore, an entrepreneur's most important decision is what data to analyze and which tools to use. You must know which metrics and data points to pay attention to and which SaaS reporting software is ideal for your business.
Here is a breakdown of the three top analytics and reporting tools categories every SaaS business needs to use today.
1. Product and User Behavior Reporting Tools
The data that a SaaS company collects from how users interact with them goes a long way to help it understand the value users derive from their products. Product and user behavior analysis and reporting tools can provide in-depth insights about your products and where they need improvements.
The right reporting tools can also provide the insights you can use to document the user's journey and track their health scores at each step. Better still, these tools can help the business identify bottlenecks to the user's journey and single out disengaged users and their difficulties.
Investors rely on reports from these tools to determine the actual user acquisition and product performance under the hood. Examples of the top product and user analysis and reporting tools for SaaS are UserPilot, FullStory, and Heap.
2. Revenue Reporting Tools
Before you embark on expansion or seek funding for your SaaS business, you must evaluate its long-term financial health. After all, everything the company does revolves around how much more revenue it will bring. The right revenue reporting tool should help you gauge the impact of more investment, market expansion, or a new product launch. It must also track most other critical financial metrics such as average revenue per account, user lifetime value, recurring revenue, customer acquisition costs, etc.
Investors will need more in-depth reports on your business's performance aside from balance sheets and sales reports. Great examples of SaaS revenue analytics and reporting tools include ProfitWell, Baremetrics, Holistics, and InfoSet.
3. Marketing Reporting Tools
SaaS marketing reporting tools come in handy when you need to create and roll out data-driven marketing campaigns. The right marketing reporting tool can help you understand who visits your website and how they are interacting with its content. When you understand where your visitors spend most of their time in a browsing session, you can better optimize the content for them. These tools can also help you know how many visitors you convert and from which source or CTA.
his information will help you fine-tune your business product for the most promising markets and users and have a smooth sail when the time to scale comes. Some of the top SaaS marketing analytics and reporting tools you should check out are Google Analytics, HubSpot, Mixpanel, Kissmetrics, and Salesforce.
Why Setting Up Your Sales Team for Success is Integral to SaaS Business Success
The sales processes of a SaaS product are very different from those of traditional software or tangible products. For most products, sales involve generating leads, nurturing them, then closing the sale. With SaaS products, on the other hand, the relationship between the company and the customer is continuous. The relationship held together by recurring billings demands a lot more than a one-time sale.
Here are three core reasons why setting up your SaaS Product sales team for success is critical to the success of the business:
1. You Become the Industry Thought Leader
There are only a handful of effective ways to build your brand and establish yourself as a credible industry leader. One of the most effective is by sharing your life lessons, starter advice, and tried-and-proven best practices. While no one ever wants to be told what to do, many people looking for genuine solutions to their problems are eager to learn. The same applies to brands and organizations. According to a thought study conducted by Edleman in 2020, 88% of respondents pointed at thought leadership as one of the most effective ways to improve a brand's perception.
2. Boost Online Social Media Sales
Regardless of what you feel about the impacts of social media on society, it remains one of the most popular ways that people get information. According to Statista, 90% of retail businesses have benefited from being active in at least two of the top social media platforms.
When you have data to work with, it significantly increases your odds against the competition. The most inspiring way to set up your sales team for social media success is to equip them with creative thinking and strategic planning skills, and real data to guide their ultimate decisions.
3. Accurately Research High-Quality Prospects
Your sales team plays the most important role in converting leads into customers. With the right strategy and quality leads, a small dedicated team of salespersons can filter through leads and prospects to identify the most likely to convert. Empowering the team means enabling them to discern the right type of customer, the prospects with the highest potential, and the right product for the moment.
There is a clear-cut way to achieve this. First, work with the sales team to outline criteria that the prospects should meet based on their engagement history and demographics. The team can then focus on a filtered selection of high-potential leads to boost conversion rates.
Conclusion
Your SaaS company should not underestimate the role that the sales team plays in keeping customers happy. This is because the sales team has the most impact on the company's brand reputation, the foundation of company-customer relationships, and customer retention. These factors greatly affect the business's revenue and overall growth.
Contact us for more information.
