It’s time to find out how SaaS can improve a company’s MRR. We will discover everything you need to know about SaaS and its influence on revenue. Read on to find out!
A few decades ago, it might have been impossible to convince people that technology was going to occupy practically every aspect of our lives. Today, accessing services online without moving an inch from where you are has become the norm. You can access such services through online applications from companies, including Slack, Microsoft 365, and Salesforce. But, did you know how such applications work? Or where do they come from? Simply put, online apps come from SaaS, a model that enables their licensing and delivery to you, the consumer. Read on to learn more about it, including how companies providing the service can increase their revenue.
What is SaaS?
Software as a Service (SaaS) is a model that involves software licensing and delivery. The software has a central host whose subscription is renewed at regular intervals. In simpler terms, SaaS involves delivering applications to individuals over the internet as a service. Consumers of these applications access and use them via the internet, leaving the developers the complicated aspects of installing and maintaining software. Companies offering such services thrive, especially since applications are high in demand in this technological era. The metric used to assess the performance of such companies is referred to as Monthly Recurring Revenue (MRR).
What are SaaS Sales?
The SaaS industry is growing rapidly globally, thanks to its widespread use among many people. Almost everyone uses SaaS regularly, or at least daily, hence the rapid growth that shows no signs of stopping soon. Some market researchers evaluated that the worldwide SaaS industry would reach an impressive value of 177 billion dollars by the end of 2020. By 2024, Kbv Research estimates that the SaaS industry will have achieved a $185.8 billion value in the global market. Software as a Service focuses on the convenience of its users due to its adoption of a unique subscription model. Therefore, more people utilize the service, generating more sales to its service providers.
How Do Companies Make Considerable SaaS Sales?
It is important to know how companies make sales to understand how they generate SaaS MRRs. The sales process of such companies is unique and challenging, and it involves the following steps:
A. Conduct a Market Research
It is very important to conduct thorough market research before venturing into any business. Use the research to leverage your preparation plans so that when you enter the SaaS industry, you are more likely to make more sales. Research involves the following steps:
- Constantly update your information about the market to understand what customers need. When you have an application that solves their wants, customers are more likely to subscribe and use it, hence more sales.
- Know what strategies your potential competitors use to increase their sales. This helps you determine the best strategy to adopt for your SaaS business.
It is very important to understand your customers and know the inefficiencies they experience from other SaaS providers. Knowing this helps you enter the market with a software solution that addresses their major concerns.
B. Identify Potential Customers
After conducting vigorous market research, it is time to identify and collect useful leads based on the data. Your marketing department will help you collect potential customers with SignalHire. SignalHire is a platform that you can use to access customers’ data like email addresses and phone numbers. The platform gets the data from various sources, including social profiles, phone directories, personal web pages, and blogs. SignalHire’s deep search crawlers then process and index the data for you to easily find potential customers.
C. Qualify the Prospects
When you acquire leads in the market, the next step will be qualifying them to determine their suitability for getting involved with your SaaS. You can use several tools to develop a consistent stream of suitable prospects. Evaluate the following aspects when qualifying the leads:
- Is your service suitable for the prospects?
- Is it the right time for prospects to use the service?
- Are they financially able to purchase the application?
- Are they capable of making the buying decision?
D. Make a Strong Sales Pitch
If the prospect ticks all the above boxes, they are ready for you to make a good sales pitch to them. The pitch helps you convince them that they need the service to solve a particular problem.
E. Identify Potential Hurdles and Their Solutions
Any smart SaaS provider knows that you can face some challenges while promoting your service and making sales. Therefore, you need to be prepared for the setbacks and identify their potential solutions.
F. Follow Up on Your Prospects
If your prospects didn’t buy into your idea, following up through phone calls or email is a good move. You can remind them of your service and gently nudge them to subscribe to it.
G. Fine Tune the Above Steps
Constantly refine the above steps so that you can improve and grow your SaaS sales cycle, generating greater MRRs for your business.
How Do Companies Increase Their Sales to Generate Greater MRRs?
The following are revolutionary tactics that companies can use to increase their SaaS MRR:
1. Continuously Get New Customers
You need to constantly get new customers on top of the already existing ones for you to skyrocket your company’s MRR. The more customers subscribed to your SaaS, the more revenues you have each month.
2. Reduce Your Customer Acquisition Costs
Adjust several factors in your company’s sales process to avoid spending more money when starting a new customer relationship. This will help you shorten the sales cycle and instead focus on getting more qualified leads, increasing sales, and optimizing conversion rates. The shorter you take to close one deal, the more sales you are likely to make, hence a good MRR.
3. Treat Your Customers Well
Any company that offers good services to its clients is more likely to retain them longer. You will likely have a shorter customer turnover if you retain your customers and attract new ones due to good services. As your customer retention grows, so does your Customer Lifetime Value (CLV). An increase in CLV with a subsequent decrease in CACs (Customer Acquisition Costs) is the perfect formula to increase your SaaS MRR.
4. Add Value to Your Existing Customers
Your existing customers already trust your brand because they have already experienced its services. Therefore, they are more likely to spend more on your application than new customers who are still unsure about your SaaS value. Find new ways to add value to your existing customers so that they can continue buying more from you. For instance, you can introduce a better subscription package where your customers pay more to access premium services.
5. Focus on Upmarket Sales
You can move upmarket and sell your services to companies higher in the corporate chain. Such clients have the financial muscle to pay better for a customized version of your SaaS solution. As you can tell, if your service fetches more money, you are more likely to have a higher MRR.
6. Offer an Annual Subscription Plan
If you have ever subscribed to any application, you may have noticed that annual subscription plans are slightly discounted compared to the monthly ones. Offering an annual subscription package is a clever trick to receive upfront payments and secure your brand as a year-long customer. Such plans boost your sales and, in turn, your brand’s MRR.
Conclusion
SaaS is a profitable venture, but only if you can tweak it to achieve a desirable MRR. Artificial intelligence is on the rise and so is AI Saas companies. Reaching the right audience is key, if your looking to market your AI product or brand. A social media marketing agency does exactly this. They can help you find the right audience and give your sales a boost by using both organic strategies and paid. Implement the above strategies to develop a good relationship with your customers, build brand loyalty, and increase sales. Increased sales are the key to achieving a skyrocketed MRR.
