5 Tips for SaaS Success

To capitalize on the $141 billion SaaS opportunity, IT solution providers need to make significant adjustments to their businesses.

SaaS

The Software as a service (SaaS) market is growing fast, with Gartner predicting sales will increase 34 percent from an estimated $105 billion this year to $141 billion in 2022. To capitalize on this growth, IT solution providers need to make significant adjustments to their businesses.

As a provider, you must focus on long-term engagements, which starts with making sure you have tools and well-defined processes in place to guide and enhance the customer journey to SaaS. You need to establish customer success functions upfront to facilitate the journey and reduce the likelihood of customer churn.

Remember that customers today are far savvier about their technology investments than in the past. So you need to understand customer needs, pain points and goals in order to make a compelling case for what business problem your SaaS solutions can solve. Here’s what best-in-class solution providers are doing to successfully integrate SaaS into their go-to-market portfolios:

1Make the Case

Some customers may still be unfamiliar with the SaaS model and, therefore, remain suspicious of how it works. As a provider, you have to ease their minds about the model’s benefits. Talk to them about lower risks around product end of life. With SaaS, it’s much easier to transition to other SaaS solutions. As such, it’s vital that the solution provider invest in the customer success functions of these solutions to ensure their customers are completely realizing the full value of the vendor’s SaaS-delivered solution. It’s also important to note that SaaS lowers CAPEX in favor of smaller, more predictable OPEX costs, and eliminates the problem of over-provisioning, allowing customers to pay as they grow.

2Use APIs

APIs are essentially the glue between you, your vendors and your customers, allowing them to interact with your organization when consuming and delivering SaaS applications. APIs enable you to automate and support your links with customers, and to deliver enhancements when available. APIs also let you to interact with your SaaS vendors for procurement and to aggregate data showing how your customers are using the solutions you sell them. A successful SaaS operation relies heavily on APIs.

3Create a Marketplace

To sell SaaS successfully, it helps to have a framework to deliver repeatable offerings designed to address customer needs. One of the best ways to do this is to create a marketplace, which you can be self-hosted or using a public cloud offering like AWS, Azure or Google Cloud to “put your wares on display.” A marketplace makes your offerings more understandable to customers while creating a standardized process internally to sell services and bundles.

4Adjust Compensation

SaaS affects not only how you interact with customers but also how you run the business. One of the biggest adjustments to make is how to pay sales reps for their deals. Traditional pay plans are largely built around commissions for the initial sale. However, with SaaS the initial sale value is substantially lower, so you have to adjust compensation accordingly, and that means providing incentives for the initial sale as well as subscriptions, renewals and upsell.

5Adjust Sales Metrics

Hand in hand with compensation adjustments is how you track, report and measure SaaS sales. Legacy models of course won’t work because now you’re tracking subscription-based sales paid for monthly or quarterly. You’re better off employing an ACV (annual contract value) model, which helps identify which clients are generating the least amount of income and uncovers upsell opportunities. Take advantage of machine learning-based analytics systems to accurately track sales and draw insights that will help drive revenue growth.

SaaS Success

Following these best practices helps establish a strong foundation for a SaaS practice, paving the path from legacy sales to longterm, recurring-revenue engagements. Remember to stay engaged with customers, making yourself available when they have questions or concerns. And lastly, always be learning. To stay at the top of your game, make sure your staff  takes advantage of both vendor and industry-standards certifications to make them proficient in the technologies you offer. SaaS is the future. And the better you prepare for it now, the more successful you will be down the road.

Scott Jacobs

As Senior Director, Channel Strategy and Operations for Infoblox, Scott Jacobs is responsible for the analysis, formulation, delivery and continued refinement of the company’s channel strategy and vision to drive sustainable growth through the partner ecosystem.