The COVID-19 crisis has put most companies in a difficult position. Even SaaS companies that have been able to transition to remote working environments seamlessly have had to reimagine their business-as-usual. Many have had to adjust growth targets, reduce marketing budgets, and focus on weathering the storm.
When the COVID crisis struck, most companies did not have any crisis protocol in place to fall back upon. Businesses struggled as many of their client’s budgets got severely reduced and prospects delayed their purchase decisions. But, as most businesses adopted a remote working strategy, the SaaS model came to the forefront, to aid them in the recovery process.
In mid-2020 a survey conducted by Statista showed that over 50% of global respondents stated that spending on SaaS products remains constant in their companies or they were planning to increase it. Now, with the economy slowly picking up, SaaS companies need to build strategies to reignite their efforts and outcomes. SaaS firms need to stabilize operations and position themselves for growth in the coming months.
Company Offerings and Customer Profile
First and foremost, SaaS companies should innovate their product and service packages and rebrand themselves in the eyes of their customers.
Next they need to re-examine their ideal customer profile (ICP). There exists an ideal customer profile for every product. The target ICP is made up of buyers who are a great fit for what the company is offering. These ideal customers tend to have a long lifecycle with the company, and this positively affects retention rates, the monthly and annual recurring revenue.
Businesses can assess the ideal category of buyer by analyzing their revenue profile and identifying which customers drive the highest percentage of revenue and sales. This increases their ability to enhance marketing effectiveness towards these types of customers.
Re-examining the customer base also provides firms with the opportunity to hedge against vulnerabilities. Furthermore, firms can also use this data to see which of their offerings creates the most revenue. By shifting the marketing strategy toward inventory with a proven record, companies can maximize the effectiveness of their efforts.
Upselling Existing Customers
Even though attracting new customers is important, it can often be very expensive. In fact, many companies spend about five times more on attracting new customers compared to retaining existing ones.
It is important for SaaS firms to reach out to their existing customers to see if there is anything they need help with. It is a great opportunity for upselling solutions that might be relevant for them. Firms can also roll out complementary features to some of the highly valued customers, and even offer dedicated account managers.
One easy way to increase monthly recurring revenue (ARR) without drastically increasing the marketing budget is to upsell customers that already find value in the products provided by the company. An upsell strategy can be mutually beneficial – The ARR increases and the customers enjoy the benefits of enhanced services.
Companies have an increased success rate when upselling to existing customers. But, not all upsells are created equal – the upsell strategy needs to be value-driven and minimally invasive for the customers.
Localizing the Product Offerings
Not all locations are affected the same way in a crisis situation. Some locations do much better than others and move quickly towards the path of recovery. Therefore, it is crucial for SaaS providers, to localize their offerings, particularly in areas that are leading the recovery.
SaaS firms can highlight local success stories, create custom content in local languages, and pay extra focus on parts of their solution that are deeply relevant in specific geographies.
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