Is It Worth Developing SaaS Solutions? Monetization Options

SaaS is software rental. These solutions are perfect for companies that do not need narrow boxed solutions or significant costs for developing their own software. They solve many problems, are financially accessible, do not require hardware, and are applicable wherever there is an Internet connection. If you are thinking about developing a SaaS product and are looking for a UX design firm in San Francisco to help bring your vision to life, this article may be useful to you.

Features of SaaS Solutions

The main features and rules that distinguish SaaS from other applications and programs:

• Work via the Internet – in a browser or through a client application.
• The client does not buy the software, but rents it, so the technology requires a subscription fee.
• The price usually includes, in addition to infrastructure, technical support from the provider, who is responsible for the quality of the service.
• Modernization and updates are the responsibility of the provider; users do not have to worry about this and spend money on additional computing resources.
• The infrastructure is scalable, that is, the capabilities of the programs can be reduced or expanded, depending on the needs of the company. In this regard, customers can control rental costs and pay for customization of only the part they need.
• A subscription model in which access to software is provided only for a specific time (the period that the user has paid for).
• A CRM system is used because the provider allows a large number of clients to access the software.
• SaaS providers offer technical support as well as analytics capabilities to improve service.

SaaS Service Development

The complexity and duration of platform development depend on many factors: market segment (B2B/B2C), purpose, and number of options that are planned to attract users. Let’s give a general diagram.

1Analysis of target audience and market. No matter how powerful the idea may seem, before you begin implementation, you should conduct an analysis: find out the target audience and its needs, determine the strengths and weaknesses of competitors, and measure the scale of the market in which you are going to work.

2Setting goals. The previously collected information needs to be systematized. If the original idea has not lost its potential, identify the tasks and ways to solve them.

3Profitability calculation. Here the final decision is made on the feasibility of the project and methods for its implementation.

4Creation of a UI prototype. It is better to contact developers with a layout, a diagram, from which the logic and dynamics of user interaction with the platform structure will be clear.

5Work on architecture. Turning a prototype into a working model. Development of microservices, setting up correct interaction between individual modules.

6Appearance. Work on the platform design is carried out in parallel with programming. As a rule, several interface concepts are created before a final decision is made. Customized UI/UX design is very important when developing a SaaS product; you can contact a company that provides comprehensive services for the development of SaaS solutions.

7Testing. Checking the viability of the result, searching for errors. Various scenarios and loads are applied to the SaaS platform to assess the stability of systems and components.

8Launch. The service is released to the market. The response of the target audience to the appearance of a new product is valuable information on the basis of which the project is being finalized.

Work on the quality of the SaaS platform does not stop after launch. Even if the metrics show that the product is received favorably by the target audience and has prospects, you should not dwell on its current positions.

Continuous development – introducing new options, working on subscriber engagement, and striving to surpass competitors – is the only way to remain in demand for as long as possible.

Monetization Options For SaaS System Owners

If you change your point of view and evaluate the potential of SaaS services from the perspective of the owner, rather than the user, the model turns out to be no less effective. Here are just a few ways to make money selling access to cloud software.

• Subscription: the client pays for the service once a week, month, year. For an expensive niche product, this is the best scheme.
• Advertising: powerful traffic of service users increases the likelihood of earning money from the sale of related services and goods. The main thing is to guess the target audience.
• One-time payment: Lifetime access to the product can be sold just once but for a price higher than the cost of the subscription.
• Freemium: the basic set of options is offered for free, and the advanced package features are sold for money – a subscription or a one-time payment.
• Donations: a method as old as time is to ask for money for the development of a project. The only thing is that the service must bring at least some benefit.
• For an IT product to become in demand, you need a good idea, a fairly large target audience, and a competent developer

Key Metrics For SaaS

When analyzing the success of SaaS solutions, you should focus on the following criteria:

• LTV. It assumes the average income from each client. The relationship between this indicator and the next shows whether it pays off for the business to attract each new customer, whether it is worth maintaining the methods or changing them.
• Cost of attracting one client. Based on this indicator, the company can select effective communication channels.
• Churn rate. The percentage of consumers who stopped using a product over a specified period.
• MRR (monthly recurring revenue). Monthly income generated by active customers.
• CRR (customer retention rate). This metric shows the ability to maintain the loyalty of the target audience.
• CR (conversion rate). This is the number of users who became clients of the company.

These are universal indicators that demonstrate the success of any marketing strategy, including those aimed at attracting new users.

Wrapping It Up

SaaS solutions allow medium and small businesses to benefit from using high-level IT products without going beyond their budget. All that customers need to receive services using the SaaS model is a browser and a device connected to the network. If you want to create a high-quality SaaS solution, you need to pay special attention to the development of a product prototype, and testing.