Cloud computing has revolutionized the software market, giving developers the opportunity to utilize the software-as-a-service model, also known as SaaS. In an increasingly crowded market, how can your service outperform the competition?
Back in the olden days, if you needed to write a document, you would install word processing software onto your computer. This would typically come with a one-time payment transaction for the end-user - think Microsoft Word.
Now, with the rise of cloud computing, word processing software can be provided to the end-user as a service, in the form of web-based applications with recurring (often monthly) payments for continued use. Google Docs is a perfect example of this.
The software-as-a-service model is popular with both developers and end-users. For developers, the subscription-style model offers regular, reliable and recurring revenue. Whilst for end-users, the in-browser experience eliminates installation and compatibility headaches.
Understanding The Long Term Value Of Your User 👥🔮
Unlike perpetual software, which the user can operate indefinitely, you need to ensure your users are willing to keep making recurring payments for the use of your software. To achieve this, you need to create long term value.
Keeping your users happy is at the core of your business. Satisfied and loyal users are proof to the world that your software consistently delivers on the needs of its users. If you want them to be in this for the long-haul, you need to focus on building a long term, intimate relationship with them.
People love to be listened to and have their opinions heard. Competitive advantage is a result of what goes on in a customer's mind. Therefore, you should explore ways of empowering your users and building those special, one-on-one relationships through direct communication. What could your SaaS business be doing to help your customers further meet their goals?
Focusing On A Small Segment Of The Market 🌎🍕
Let’s face it: ‘going niche’ is daunting. No matter what software you are offering, it’s more than likely that you are operating in a saturated marketplace with many competitors fighting for your users. One of the best ways to give your SaaS business competitive advantage is by truly differentiating yourself from your competitors - tailoring your software to a specific segment of the market.
By offering software aimed at a niche market, you will be able to word and promote your subscription towards a more specific audience. This will make them feel like they’re buying a product that was made for them - setting you apart from the competition.
Typically, reducing competition can give you the opportunity to make a bigger impact on the marketplace. By analyzing your sales trends and competitor movements with a service like CompetitorZoom, you will quickly be able to assess whether ‘going niche’ is right for your company moving forward.
Offering A Free Trial Of Your Software 🙋💻
Minimizing or removing the initial financial risk of becoming a user can make your software service offering more attractive. This will make potential customers less hesitant about the prospect of just ‘giving it a go’. Essentially, you need something that gets the user hooked, converting them into someone who will pay month-on-month for your software-as-a-service.
When you think about it, SaaS is basically a rental revenue model. You are renting the use of your software to the user. Why not offer the first month rent-free? For potential customers, there is suddenly nothing to lose in trying out your software. So, what’s the trick behind designing a high-converting free trial?
The free trial of your software must be designed to effectively get the user to a point where becoming a paying customer is both the most practical and logical next step. The purpose of a free trial is for the user to evaluate whether your software has delivered on their desired outcome and if they have gained enough value to justify the future price tag.