Running a SaaS (Software as a Service) business can be very rewarding. People realize more and more the potential of cloud computing and the appeal of the recurring subscription-based income model. It’s not a surprise there are so many SaaS companies out there already and the market is growing quite rapidly in popularity.
However, not all of them actually succeed and reach their desired goals and, more often than not, the growing number of competitors is not the main reason for that. There are other far more important factors that many SaaS companies tend to overlook. If you are running a SaaS business and you don’t want to see it fail, make sure you don’t make the following mistakes.
Solving a Non-Existing Problem
This is perhaps the main reason why a lot of SaaS businesses fail. The worst part about it is the fact that they don’t really realize that they are making a huge mistake right from the start. Offering a solution to a problem that does not really exist essentially leads nowhere – no one will actually need your product.
Therefore, you need to make sure that there is a demand on the market for a particular product you want to create before you actually create it. You have to be sure that the product will address and solve your target customers’ problems once it is launched.
The same goes for offering a solution to the problem that people don’t really want or need solving. You need to do your homework and figure out what exactly is in high demand on the market. Get to know your target customers and learn about their needs before you invest your time and money into the development.
Not Listening to Customer Feedback
If you don’t listen to your customers’ feedback, how would you know whether or not you are actually meeting their needs? How would you know whether your product is impeccable or perhaps there are some areas that could use improvements?
You may think that you fully understand all the possible applications of your product and everything it can do, since you were the one who made it, after all. However, that is exactly what can prevent you from being objective and looking at your product from a different perspective. Yes, it can be difficult to hear criticism at times about something you’ve worked so hard for, but that’s how you make it better.
Take full advantage of your customers’ feedback. They will always tell you what they love and what they wish your product had. If you want to improve your service and not only retain your existing customers, but also pull in new ones, you need to really listen to them and always take into account their suggestions.
The important thing to look out for is negative feedback because it can be really eye-opening. As Bill Gates once said: “Your most unhappy customers are your greatest source of learning”. Perhaps not every negative comment will be reasonable or applicable but most of the time you can definitely learn a lot from it.
Incorrect Pricing
Determining the right pricing for your SaaS products is one of the keys to the success of your business. If you manage to establish the right pricing, it goes without saying that you will generate more revenue and ROI and make your every effort pay off in the long run.
Unfortunately, this is where a lot of SaaS businesses make a mistake, as they either overestimate or underestimate their products and all the benefits that they can provide. As a result, the former makes them lose their customers, whereas the latter leads to losing profits.
If you establish lower than usual prices, your business will not be making money and you will miss out on a number of opportunities for growth. On the other hand, if your pricing is too high you won’t be able to attract as many customers as you would want as they will simply go to a competitor who provides the same service at a lower price.
It’s a double-edged sword and it can really make or break your business. The key is to find the right balance. Take into account your investments and software requirements, but don’t forget about your target users and how much they are actually willing to pay for your service.
The Lack of Strong Terms and Conditions
Creating a terms and conditions agreement is another important step that you need to take when running a SaaS business. In fact, you shouldn’t even go live with your product without making one first. The main purpose of this agreement is to protect your business from anyone who could abuse your service or overuse your resources.
Contrary to a privacy policy, terms and conditions agreement is not required by law, but it is still highly recommended that you have one. It will provide guidelines to your users, clearly specifying everything that they can and cannot do. Specifying all the rules will help you protect your business from malicious users and take action against them if needed.
What’s very important and really cannot be overemphasized is that you should never use someone else’s terms and conditions. Don’t just copy it from someone else’s website. You need to make sure that it is created specifically for your own business and how you run and operate it.
No Real Support
Satisfying your customers should be your number one priority – without them, your business simply cannot really thrive. Apart from making sure that the SaaS products you offer actually meet your users’ needs and solve every problem that they may have, you need to make sure that you provide high-quality support.
What if your customers experience some problems with your product and they need technical support? You need to make sure that you are available to answer their questions and solve any potential issues.
Providing top-notch support will make people trust you more as you will show that you are a professional who cares about them. If you are always there when they need a helping hand, not only will you inspire their loyalty, but they will also gladly recommend your business to their family and friends.
Make sure you follow these pieces of advice if you don’t want your SaaS business to meet the fate of many unsuccessful ones. Avoid these common mistakes others make and you can be sure that you will turn your SaaS company into a lucrative one.
