9 Facts Everyone Should Know About #Saas Business

Posted on March 17, 2014 by

FactsAs more businesses move towards adopting cloud solutions, it is important to know some facts about SaaS before you build your product. Below are nine facts you should know about SaaS:

1. Maintaining a healthy balance is a must

During the early stages of your SaaS startup, you will often have to wear different hats. For example, you may be in charge of reviewing content for your blog, managing leads, updating lead scoring, interviewing candidates for a job and so on.

As you build your business with a lean team, you have to determine what is important that needs to be done right away and what can wait. Your daily tasks should address the following important goals: build awareness, manage leads, create sales support and build the product.

Even as you focus on getting customers, do not forget to improve your product. Take care of your existing customers even as you prospect for new ones. Always strive to improve your product to align it with the needs of your customers.

2. Set price based on customer behavior and what they value

Growing a SaaS business is slow in the initial stages. However, in the middle age, the business becomes a predictable recurring revenue machine. Don’t be afraid to experiment with yearly plans upfront to drive in cash and reduce early churn. Moreover, strike a balance between users and revenues. If you will be offering support, avoid the freemium model.

Pricing is important as it will affect your short and long-term revenues. Do not price your product based on perceived costs but on customer behavior and what they value. Interact with your paying customers and find out why they are paying for your SaaS product. Are the reasons they signed up the same ones you think? Sometimes, customers may find your service valuable in ways you did not think of.

3. Treat customers like prospects

If you are only interacting minimally with your existing customers e.g. during their renewal period or when you need a reference, you are running your business wrong. You cannot afford to spend lots of money acquiring customers only for them to leave at the back door.

Continue reading “9 Facts Everyone Should Know About #Saas Business” »

Listen To Your Customers. They Will Tell You All You Want To Know About Your Business #custserv

Posted on March 12, 2014 by

Listening to CustomersOne of the principles of success of SaaS startups is knowing who your customers are and what they want. Now, Steve Jobs once famously said that customers do not know what they want. Henry Ford even said that if he asked customers what they wanted, they would have said a faster horse. Most founders cite these two examples to justify why they do not listen to customers. In reality, they are just shooting themselves on the foot.

Customers know what they want. However, they may not be able to tell you in black and white what they need. It’s up to you to determine what they want , not on intuition, but based on feedback.

Listening to customers is the best way to know what they want. Whether you are getting out of the office to meet customers in person or are engaging with them on Facebook, you will get crucial information that can propel your startup forward. The problem (which may not be a problem to your team) with SaaS is that it is fun building products and features than talking to customers. And not paying attention to your customers may be the reason why your traction is unenviable.

Why Focus on Customer Conversations?

They say customer is king. This assertion remains true even in SaaS. When customers talk, you should listen. But you have to listen with a discerning voice. Customers may not know what they want, but they surely know what they don’t want. It’s your job to determine what customers need from what they tell you.

For example, when customers say they would like to pay a lower price for your product, this may not be the case. What they may mean is that they do not derive value from your app to warrant the price that they are paying at the moment.

So, what do you do? Do you reduce your price? Absolutely not.

A savvy founder will find out how to make users customers derive the best value from the app. Perhaps you have all the best features in your app, but how many users actually use the features? If your customers have not discovered the features of your app, perhaps it’s time you updated the “resources” section on your website with information on the rarely used features. Show customers them how they can benefit by using the features of your product.

Continue reading “Listen To Your Customers. They Will Tell You All You Want To Know About Your Business #custserv” »

Why every MSP should have their own automated recurring billing system

Posted on March 10, 2014 by

MSPIn most cases, recurring billing is associated with direct debits or debit orders. However, online credit and debit card recurring billing provides the same recurring collection conveniences and other benefits such as a global sales reach, faster funding and real-time authorizations.

Below are some reasons why MSPs should consider automated recurring billing system for their operations:

1. Improve Customer Billing

One thing that can make or break your relationship with customers is the billing process. A cumbersome billing process is not only expensive on your side, but also frustrating to customers. In the initial stages of your MSP business, you may be able to bill customers manually. However, as your user base grows, manual billing becomes more expensive.

Manual billing takes time and is prone to human errors. To bill your customers, you will have to request for their credit card details, call their bank to find out if they have enough funds for the transaction, etc. This wasted time could be better utilized to improve your business.

Having a recurring billing system that automates charges will significantly improve your billing accuracy and leave you with more time to concentrate on other important aspects of running your business.

2. Custom Pricing and Discount Plans

MSPs usually offer their products in packages. This is understandable given that users have different requirements for the same service. When you have different service plans, the service fees should reflect the different service consumption.

Continue reading “Why every MSP should have their own automated recurring billing system” »

Unravelling the Key to Perfect Checkout Pages

Posted on March 8, 2014 by

The whole checkout experience is very fragile, and getting the experience right is always a big challenge. to comply to the  Data Security Standards and also get the user to take the motivated action of completing the whole ‘Checkout’ process is a tough ask. After analyzing thousands of checkout pages, we finally deliver the perfect checkout pages that fit both PCI compliance and conversion rate puzzle.

First-off: Why the Hosted Checkout Pages?

If you wish to accept credit cards for your business, it is critical for you to have a checkout page that complies to Payment Card Industry’s Data Security Standards. For businesses of any size, this is a laborious process and could stretch out for months, an alternative to this is to start off with a hosted checkout page of any PCI compliant services such as ChargeBee.

However, with varying needs of every customer each checkout page needed to be optimized to the correct fit of the merchants and their services or products.  So getting the framework right for the hosted checkout pages was even more pronounced. And after tons of research and a host of new features, here’s unravelling the key to perfect checkout pages.

Some of you have already had the behind the curtains access and have been helping us beta test it(And a real big thank you for that!). For the rest of you, let me take you for a spin on what’s new and and the step behind it.
Continue reading “Unravelling the Key to Perfect Checkout Pages” »

Why Most #Saas Businesses Fail

Posted on March 6, 2014 by

Why most SaaS Businesses FailThe success of many SaaS companies is one of the reasons why many entrepreneurs are looking towards the business.  Just like “there is a tool for that”, we are likely to soon have a scenario of “there is a SaaS product for that”.

However, behind the news on Techcruch of successful SaaS companies, VC funding rounds and acquisitions, very many SaaS businesses do not take off or simply fail miserably. And no, the problem is not too much competition.

Fundamentally, running a SaaS business requires a shift in metrics that founders concentrate on. Most people run SaaS like any other online venture and within no time, realize they are not breaking even or getting traction. Below are some of the major reasons why most SaaS businesses fail:

1. Lack of a Market

Yes. You probably expected the first reason to be related to technology but no, it’s related to the market. Most SaaS businesses fail because they are simply not solving any existing problem. Others may be solving a problem that users do not want solved.

The barriers to developing an app are at an all-time low. With sites like Guru, Elance and Freelancer, anyone can assemble a team from overseas and get an app coded for less than $1000. However, most founders find themselves in limbo after product development when they realize nobody seems to care about their app.

One of the ways you can avoid this problem is to adopt Lean Startup approaches and be customer-centric. In a nutshell, you simply create a small solution and see if there is market for it. From there, you can tweak the solution and scale it based on user requirements and feedback.

2. A Failing Business Model

With the adoption of lean startup model and many success stories of SaaS companies bootstrapped to profitability, most entrepreneurs assume that it is easy to acquire customers. They assume that after building their product, customers will simply show and sign up. This may be true for the first few customers but in most cases, acquiring customers is an expensive task.

Continue reading “Why Most #Saas Businesses Fail” »

9 Mistakes In #Saas Business That Make You Look Dumb

Posted on March 4, 2014 by

9 Mistakes In Saas Business That Make You Look DumbThe pressures, expectations and responsibility of running your business can make you lose focus on important goals and end up making some simple mistakes that make you look dumb, unfocused and confused. Here are nine mistakes SaaS businesses make that make them look dumb:

1. Thin Content Website

SaaS users are expected to be internet savvy. However, how ‘savvy’ a person should be is subjective. To some people, being “savvy” means knowing how to use read and send email. To others, it means knowing how to configure databases and extrapolate information from an application.

Regardless of the market you are serving, your website should be rich with helpful content on your product. Having a walk-around tour of your solution and a comprehensive “knowledge base” can help to activate more paying customers.

2. Hiding your Prices

It’s still shocking to see some companies still hiding their prices. The first thing that comes to customer’s minds when they cannot find prices on your website is that you are too expensive.

On the flip side, you may encourage customers to contact you to get pricing information. However, this is not a marketing strategy you want to use. First, most customers will just not take the trouble to email or call to ask for pricing information. Secondly, you can get lots of unqualified inquiries, which do not help your business and makes you waste your time answering questions that would have best been answered on the website.

3. Concentrating on Front Sales

This mistake will make you look dumb among your investors. The SaaS business model is built on recurring revenue. Therefore, your sales process should be optimized for both immediate and recurring sales.

Continue reading “9 Mistakes In #Saas Business That Make You Look Dumb” »

16 insane (But True) things about SaaS Marketing

Posted on February 25, 2014 by

MarketingFor the most part, SaaS marketing is similar to e-commerce marketing. However, there are some distinct factors that make SaaS marketing stand out. Below are 16 unconventional but true things successful SaaS founders know about market:

1. Metrics Matter

Your marketing should be tied to other important metrics in your business. For example, you should know how much you are spending on acquiring customers and how much you are generating from your new leads. Watching these metrics will help you determine whether your marketing efforts will result in positive returns.

2. Relationships Matter

If you are bootstrapping your startup, building relationships with key influencers in your industry is crucial to your success. Networking with influencers via email and social media and can help you with credibility when you launch.

3. Launch Big

Regardless of the type of SaaS business you are running, you need to launch big and fast. Now, launching big does not mean buying a Superbowl ad. It simply means being at the places where your audience hangs out. Get the word out about your product through all avenues.

4. Get Feedback

Steve Jobs famously said that customers do not know what they want. This may be true for a company with the ingenuity of Apple. However, most customers know what they want. Listen to their feedback and implement them.

5. Push the Right Message

Your product is only as good as the value customers will derive from it. Users must know how they will benefit from your product. The benefit must be compelling enough to make them want to pay for your product.

6. Know your Audience

Know your potential customers and how to reach them. Continue reading “16 insane (But True) things about SaaS Marketing” »

Custom Fields and how to take advantage of it.

Posted on February 21, 2014 by

Collecting and tracking useful information from your customers just got easier with ChargeBee’s Custom Fields option.
Right fit Custom Fields

What exactly are Custom Fields?

Custom fields are the fields that can be put on your site to collect additional information from your customers. This information could be used to help you understand your customers better or just to help you with your business. Space is the limit (Well, now that we have man on the moon and rabbit on Mars I don’t think the “term sky is the limit” still applies :P)

Let us take a look at a few ways in which custom fields can be put to great use:

Referral or Affiliate Source:

A custom field with ChargeBee is all you need to track the source of the customers you are getting through referrals or affiliates.

Use Case: Customer Referral

Suppose you’re running a referral campaign and you’d like to offer your existing customers a discount or free credits for each new customer they refer. Tracking which customer referred who can be easily done through custom fields. Just get the referrer’s name during sign up and store it in a custom field and you’re all set.

Use Case: Affiliate Program

Quite similar to referral programs, tracking affiliates to make payouts for subscriptions can be handled using custom fields as well. Just get the reseller’s name as input and use that to track your affiliates.

Change without change of price: 

Allow me to explain. When you are selling a particular product that comes with variety but without a change in price like clothing, that comes with the variety of sizes. This is where the custom field comes into picture. You not only allow your customers to choose the size of clothing they want but you will also be able to track which one of your sizes is selling better.

When will my shipment arrive?
Continue reading “Custom Fields and how to take advantage of it.” »

Your DB is NOT your credit card vault. Here is why

Posted on February 19, 2014 by

Credit Card VaultOne of the biggest challenges of SaaS startups is how they can accept payments online. We have already covered the major payment gateways that startups in US, Europe, Australia and Asia can use. However, some companies opt to store their customers’ credit data in-house. Why would you want to use an in-house database as your credit card vault? And is using a database to store credit card information safe?

Some startups like 37 Signals switched from using third party payment processors to custom in-house systems. However, other companies have tried using in-house systems with disastrous consequences. Many times, headlines detail companies crippled by a breach of data security. Whether it is a large-scale attack or simply a case of an employee abusing access to sensitive cardholder information, the results can be devastating.

Cardholder data stored in a company’s database is exposed to a number of internal and external risks. Companies that fail to safeguard cardholder data not only lose their customers’ confidence, but can also be slapped with heavy fines for being non-PCI compliant and face other legal problems.

Risk of Storing Credit Card Data in Databases

According to the 2012 Verizon Data Breach Report (PDF), databases have the highest rate of breaches among all business assets. The report shows that approximately 96% of records breached are from databases. On the same note, the Open Security Foundation revealed that 242.6 million records were potentially compromised in 2012.

Hackers and malicious insiders target databases for one simple reason; it is where customer records and other confidential business data are stored. When malicious third parties access cardholder data, they can quickly extract value, impact business operations or cause massive damages.

Many startups do not invest in database security as they should. According to the IDC, companies spent less than 5% of 27 billion on security products related to addressing database security in 2011. The vulnerability of databases is based on its technology. Below are some reasons why you should not use your database as a credit card vault.

i) Unused or Excessive Privileges

When employees are given more privileges than their job functions require, they can abuse the privileges. For example, a customer success team member whose job function requires the ability to change customer contact information may take advantage of excess privileges and increase a customer’s account balance.

On the same note, companies often forget to revoke access to database privileges of employees who leave them. If the employees depart in bad terms, they can use their former privileges to inflict damage or steal high value data.

ii) Privilege Abuse

Authorized users may abuse database privileges for unauthorized use. For example, an employee may be granted access to the database with certain limitations such as disabled printing and saving of electronic copies. Continue reading “Your DB is NOT your credit card vault. Here is why” »

Customer success & SaaS Metrics – You improve only what you measure

Posted on February 14, 2014 by

You can Succeed Only when You MeasureSaaS founders are obsessed with metrics. However, it is easy to get off-track measuring metrics that do not contribute to the bottom-line. Without in-depth insight on how your current users interact with your service, it will be difficult to achieve customer success. Tracking user interaction with your app may seem like a vanity task, especially when you are still generating revenues and acquiring new customers.  But is this really the case?

Why You Need to Track User Interaction

Concentrating on customer acquisition and activations without giving thought to customer success is a flawed approach to SaaS. Let me explain why.

SaaS profitability is largely based on recurring payments from users. The cost of acquiring new customers (CAC) is usually higher than the cost of retaining them. However, success means retaining customers through to their lifetime value (LTV). Typically, the lifetime value will be the point where the needs of your users supersede what your product offers. The LTV can vary from industry to industry and should be maximized for optimal recurring revenues.

If majority of users are terminating their accounts without reaching the average LTV, then there is a problem with your product or service. While a percentage of churn is expected, higher churn rate will slow down your growth and negatively affect your revenues. Lowering churn should be at the center of your marketing.

You need to know why users are not reaching their expected LTV. If you are not tracking user interaction, you will not know what is causing churn. Most causes of churn are related to customer satisfaction. Here are a few examples:

  • Customers get mixed up with packages. They have no way of upgrading or downgrading their package.
  • Your product has bugs that customers cannot deal with.
  • Your product does not deliver what you promised.
  • Customers feel that they don’t get adequate support from your team with regards to using the app.

By tracking user interaction with your app, it will be easy to spot potential causes of churn and address them in time. For example, if usage metrics data show that customers don’t use a particular feature, find out why.  Is the feature too difficult to learn? If so, provide learning resources. Host a webinar to highlight the feature, provide instruction notes  or videos on your knowledge base, etc. Is the feature not being used because of a bug? Provide an easy way for user to provide feedback to your feature. Get your development team working on any bugs in your product, of course prioritizing.

Continue reading “Customer success & SaaS Metrics – You improve only what you measure” »

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