Everything You Need to Know about Building SaaS Product
Software as a Service product is changing the world. Emerged with the rise of cloud technologies, day to day they are conquering their place on the top. Their popularity is explained by the ability to make life easier, a positive impact on performance and productivity, reduced costs, and time. Put into plain words, SaaS is a solution that provides users with a ready-to-use software via browser or mobile app. There’s no need for a customer in paying attention to installation, maintenance, and updating the app: all of this is done by a software provider. Users only rent the app and pay for permission to exploit it for their purposes for as much time as they want. Internet connection is the only requirement needed to make it all work.
What are the advantages that define the popularity of SaaS products?
- It’s incredibly convenient for the customers. They avoid all the problems with software installation and configuration and can just utilize the SaaS product to solve their problems.
- There’s no need for customers to pay big amounts of money on expensive software. They can only buy a subscription for the period and functionality they need and cancel it when they no longer need the service.
- Support and automated updates. Apps updates and bug fixes are synchronous and available to users of all devices maintaining their security.
- Ease of management and productivity. Focusing on SaaS software providers’ benefits, the product has a positive impact on sales without even putting extra resources. Its scalability allows making a customer base of 100 and 100K without making additional efforts.
- Cloud-based apps are less susceptible to software piracy so a SaaS app has its cybersecurity advantage.
- SaaS apps are accessible from anywhere in the world with only one condition — the Internet — required. Some of them also may work offline and synchronize only when they are connected to the Internet.
SaaS now isn’t just a buzzword, this is our today’s reality. And it’s more than understandable: solution like this brings benefits to both parties: users and software providers.
If you belong to the customer group, today is a good time to start exploring the advantages of various SaaS products. If you are one of the entrepreneurs considering bringing your new product to the SaaS market table, we created a roadmap to keep your business afloat and avoid some of the common mistakes.
1. Market Research and Target Market Defining
Market research is a starting point of SaaS development. Properly conducted, it will become the foundation of the product’s long-term success. It helps to get an idea of competitors and the level of competition. All of this will help you to find out what exactly customers need and what you can bring to the table. Go and interview your potential clients about the challenges they face and how they overcome them. It will be essential for finding your product-market fit.
Going into details, market research can benefit in identifying and analyzing business opportunities and select the most profitable ones. The notion of the field you’re going to operate in will increase your chances to succeed by a better understanding of your Ideal Client’s profile and tactics for their targeting built on the base of the research. Keeping an eye on competitors will provide you with an understanding of competitor software’s strengths and weaknesses and the measures your opponents use to retain their customers.
2. Formulate Strategy and Create Implementation Plan
The strategy is a vision of how a product should be and how it’s going to get there. The strategy consists of three main elements.
Vision is a fundamental reason for building a product. How will your product contribute to tackling the issues that customers have?
The second is concrete and measurable goals, the fulfillment of which will lead to the achievement of a vision. What metrics do we use and how do we track performance?
And the third is actions should be taken to achieve the goals.
When there is a strategy, it means that there is no ambiguity when it comes to making important decisions. And if the decision is contrary to the strategy, then it cannot be applicable. Similarly, any opportunity to promote a product that is consistent with the strategy should be considered further.
3. Determine Pricing Model
Pricing model specification isn’t always a simple matter. You need not only to solve clients’ business challenges but also be fairly awarded for the value you provide. If the price isn’t high enough, the initial costs you incurred will take longer to pay back and your enthusiasm and steam may disappear. Therefore it is so important to calculate the unit economics in the early stages. If you charge too much, new customers may prefer the competitors’ solutions and adoption of your SaaS product may stagnate.
There are some models available for implementation. Each of them has its pros and cons and may show different effects in different conditions. Some of them are:
- Usage-based pricing
- Per Feature pricing
- Simple, flat rate pricing
- Tiered Pricing
The model choice should be made based on your idea and market research. It is very important to conduct customer research before determining a pricing model since a lot will depend on how your product solves the needs of your customers and how much and often they are willing to pay for this solution. For instance, flat rate pricing is the best fit when you want to give users access to all the features for a fixed fee. The main advantage of this model is its simplicity. It also eases sales and marketing processes as there’s only one offer to push. But this simplicity may also play on you a good joke because it will be difficult to upsell to your actual clients as they have been locked down to a fixed price.
Another model — Tiered Pricing — can help avoid this problem by defining a cost for each SaaS feature. But customers don’t always know what they want and this is the main disadvantage of this approach.
There’s one financial mistake that may become crucial for your business is requiring payment upfront and for long-term. It bears a lot of concerns in customers’ minds. They are connected either with the doubts about how the product is going to meet the company’s needs, or with the lack of trust in software provider, its ability to update the app timely and provide data security. The solution is simple: just to give the users the opportunity to try the product and make a decision on the basis of their experience for free.
4. Make Wireframes
Wireframing is the creation of a schematic and structural visual representation of a product. It provides an opportunity to define the layout of UI elements on a screen before falling into detailed design. The best thing about using wireframes is the opportunity to make changes fast and easy without sophisticated manipulations. They may be created by hand or with the help of special applications and used for prototyping.
One of the important components of this process is the user for whom you are creating the product. You need to understand correctly: who is your user and how to interact with them in order to receive feedback.
The most important thing in the design stage is to correctly understand the needs of users in order to create a product specifically for them and achieve results.
Creating User Stories will help identify the user and his needs. Since the characters are described in fairly general terms, there can be several user stories (even for one person).
User stories should have — who the user is, what he needs, and why he needs it.
5. Put Emphasis on MVP
The successful story of SaaS development has to contain a minimum viable product (MVP) chapter. This is a version of a saas application with the basic features included to grab the attention of users and collect customers’ feedback. Many startups and large IT companies are increasingly using MVP as a starting point for building a successful saas product. This will fast-track the market release of the product, reduce implementation costs, test the demand and finally provide you with a clear understanding of your assumptions’ accuracy. The sooner users can tell or show you how they use the product, the higher level of success.
However, MVP is not just a version of the product with a minimum of functions, but the least resource-intensive tool for validating the economic feasibility of a business idea, which also serves as the basis for the final offer.
In summary, the main objectives derive MVP:
- To test saas product hypotheses at minimal cost.
- Accelerated retrieval of information required to build a saas product.
- To save development time.
- Quickly deliver a product that solves at least one problem to early users.
6. App Development
After all the preparations are done, the concept defined, the idea is validated, an analysis of the market and potential customers is made, it’s time to make it all work. At this stage the main component of success is the right choice of an experienced and reliable development team. This process usually falls into 3 steps:
- Coding itself. During this stage, scalable architecture is designed and a prototype is developed to test and improve the concept or demonstrate the idea to the investors. UX designers focus on the behavior of a SaaS application to ensure it is actually usable and appealing.
- Support and Maintenance. Of course, nothing stops with the release of the product. The development team always keeps an eye on the app performance, works on the new features, and maintains the product.
But knowing these steps of building a SaaS product isn’t enough to succeed. It’s also important to be aware of the challenges most companies face to foresee all the potential difficulties and not to be trapped in a bottleneck.
There’s the list of commonly made mistakes (better nor be repeated):
Very often the software development team choice turns out to be crucial for all the SaaS projects, its prospects, and profit. It’s needless to mention the reputation break and customer loss. That is the reason why it’s important to do good research before relying on one or another software vendor. SumatoSoft team is an example of a reliable software partner with solid expertise in digital product creation and vast experience in SaaS development in particular. Always check the provider’s portfolio and testimonials not only on their website but also on other platforms. Trusted companies will have the highest rates (for comparison, the rate of Sumatosoft is 4.8/5 at (clutch.co) and 5/5 at (goodfirms.co)).
The digital world in general and the SaaS market in particular are undergoing continuous reorganization and development, so it’s important to keep up with its pace not to be left overboard. Flexibility is the key. Thus it’s needless to change and be stuck at the first business model you came up with: leaders often have to pivot to survive.
7. Rolling out Your Product
The crucial question remains the choice of a reliable cloud provider. We advise you to pay attention to Microsoft Azure and Amazon AWS, which make it easy to deploy your Saas solution. These services can be easily scaled according to the requirements of a project and are equipped to deal with surges in users of your SaaS product.
For example, Amazon AWS provides a wide range of infrastructure services, such as providing computing power, various storage options, network solutions, and databases offered as services: as needed, with availability within a few seconds, and with payment upon use. At your disposal — more than 90 AWS services: from data storage to tools deployment and directories for content delivery. New services can be prepared fast and without initial capital costs. This enables start-ups, small and medium-sized enterprises to access necessary components to quickly respond to changing business requirements.
8. Beta Testing
It’s impossible to foresee all the customer requirements and preferences. All of this may be sorted out by beta testing. It may be done by a small group of users for free or at minimum price in return for their time and feedback provided. When the results are acceptable, new customers at a pre-planned price may be invited.
9. Customer Onboarding and Support
This is a crucial moment in the life cycle of a SaaS product because the users’ initial impression will play a significant role in their further choice: either stay loyal to the product or switch to another one.
Customer onboarding should provide initial training along with ongoing support. Its duration is defined by users’ needs in assistance with exploring all the features that they plan to use.
10. Marketing Your SaaS Product
Nothing stops after the SaaS project is officially launched. It’s important not to leave marketing out of proper attention because wise and well-elaborated strategy can make a difference. Let’s pay special attention to the tools that showed their effectiveness with SaaS projects. Some of them are:
- Content Marketing
- Product Trials
- Search Engine Optimization (SEO)
- Referral Marketing
- Google AdWords
Content marketing is used all over the world to build the brand, attract visitors, and turn them into customers. The main advantage of this method is that content continues to provide leads without any additional investments, when other forms of marketing, such as pay-per-click (PPC) advertising, will not do so after you stopped paying. Don’t forget about Search Engine Optimization as it makes your content discoverable.
Talking about PPC advertising, it also remains popular because of such reasons as scalable and targeted traffic delivered to your website. Due to its predictability, the marketing budget will always be kept under your control. Retargeting, used along with PPC, will help you to turn hard-earned visitors into customers.
Nothing is better than the opportunity to try the product before purchasing — that’s why Product Trials must be considered as a good opportunity to get your potential customers to estimate the product’s value. But providing access isn’t enough. You have to be sure that users are satisfied with the service so onboarding and support from your side must also be provided.
In the SaaS case, co-marketing may be highly effective. Usually, companies that are going to collaborate have either products that are complementary to each other or shared views and approaches. Joined efforts may bring a very high outcome.
The fact is that the SaaS market now is continuing to expand. More and more people get acquainted with all the opportunities SaaS products bring to their livers. Small and medium businesses are starting to realize that Software as a Service is a great fit for their needs. That’s why joining the SaaS market today may bring great prospects and huge benefits tomorrow. Of course, that’s not always easy and it’s important to have a deep understanding of how this domain works. We at SumatoSoft are always ready to share our knowledge and experience and guide you through this journey. Get in touch with our team and get a free consultation about your SaaS product development.
Originally published at https://sumatosoft.com.