The popularity of companies that provide software as a service (SaaS) has increased. They’re so mainstream that experts predict that by 2025, 85% of commercial apps will be SaaS-based. You might wonder what it is about the SaaS business model that appeals to people. To begin with, it provides a consistent recurring revenue stream that appeals to a wide range of possible business partners and investors.

This business model also relies on data and customer retention, which, among other things, makes it responsive to changing market environments and maintains its stability over time. It’s simple to estimate a company’s growth and make sound business decisions with SaaS. We’re here to break down some of the most popular income streams for SaaS businesses and give you some tips on how to make more money as a SaaS company.

Subscription-Based Revenue

In most cases, SaaS is a subscription-based business model. A subscription-based business is a recurring revenue model that gives subscribers access to products and services once they pay their monthly membership costs. Customers are often charged monthly or annually in SaaS. Some companies charge huge enterprises special prices based on the amount of service they provide and the company size.

This company concept is quite adaptable. Customers can change their subscription plans or cancel them at any time. It is beneficial for SaaS businesses because it is based on recurring revenue and ensures a steady revenue stream. Also, users profit because they have access to things without incurring additional commitments or ownership costs.

The subscription-based economy is transforming the way people do business. Nearly 70% of CEOs believe subscription models will be the most successful business models in their respective industries. SaaS companies can attract investors and retain customers by offering robust portfolio management services within their platforms. Since technological advancements have made it easier for anybody to build or utilize subscription-based products, it is no surprise that this business model will generate $10.5 billion by 2025, with a 15.5 percent annual growth rate between 2019 and 2025. Subscriptions are here to stay, owing to their consistency in making our daily lives convenient and more manageable.

How to Make Money as a SaaS Company?

As your product is your primary source of recurring revenue, it seems reasonable that it should make you the most money. Taking a chance with different sources of income may not be the ideal option for everyone, but here are some options for gaining more customers and making more money.

Gain more Users by Providing a Better Experience

It’s the experience that sells, not the product. You must focus on features of your product that will keep users loyal to you to keep up with their ever-growing requirements and expectations. Onboarding is the first of them. The overall goal is to make the onboarding process as painless and motivating as possible.

According to a Forbes Insights survey, 55% of customers said the firsthand experience was critical in forming their perception of a company. In light of this, the user experience throughout onboarding should be pleasant and straightforward, from sign-up to the first walk-through till their deciding moment. It can help you retain the existing users and also add new ones.

Streamline the Customer Billing Process

One of the most general problems in the SaaS industry is failed payments. A recurring billing system is one technique to deal with hard or soft declines. Customers are automatically invoiced (weekly, monthly, or annually) based on their subscription plan once they provide the relevant data. This process is also a component of the user experience, so if it’s too complex and confusing, you could be losing hundreds of new customers.

Since recurring billing is an automated service with triggered transactional emails, the frequency of unsuccessful payments (which might contribute to churn) could be dramatically reduced. This category includes invoices, dunning emails, and other documents. SaaS businesses frequently provide a safe and dependable charging method to assist your visitors in becoming consumers. You will also have access to a simple automated process that will help you save time.

Preparing in Advance for Scaling

No other business model offers the same amount of stability as SaaS. Revenue certainty and easy tracking of changes in business growth are two advantages of the subscription-based model. Every SaaS company should take advantage of the wealth of data available from its consumers. Data accelerates business growth, and appropriately analyzing it may help you scale your company faster.

The benefit of SaaS metrics is that you don’t have to wait years to find out if a plan was successful. Your company decisions have a short-term influence on revenue, and you can easily adjust methods to meet your demands. Streamlining the IEC deactivation process in your SaaS product can enhance your customer service and minimize revenue churn. Critical metrics like- MRR and attrition rates need to be tracked carefully to assist you in managing your increasing user base and adapting to changing market conditions.

Changing Prices as Per the Need

Another advantage of SaaS is that you may modify your business to meet the needs of your users daily if you track your data correctly. Everything practically in SaaS is highly flexible and configurable, including the pricing for the services. The volatile nature of the crypto market presents both challenges and opportunities for SaaS products, making agility and innovative features crucial for navigating its potential booms and busts . You can re-evaluate your prices as you go to reduce churn or improve your marketing strategies. You can also estimate when to raise pricing or offer discounts to refine your product offer by conducting thorough market research. Businesses should modify their pricing as their product develops and improves.

You don’t want to undersell a product that solves complicated problems for your customers and causes them to become frustrated when you raise your prices. Although, you also don’t want to oversell a simple product and drive them to your competition. Pricing should be sensible, and you should always do what is best for your business and your customers.

The benefits of a subscription-based model are getting recognized by an increasing number of businesses. It will undoubtedly have an impact on how we do business in the future, both from the consumer’s and the company’s perspectives. The way you make money is determined by how well you implement the proper approach. Simply measuring metrics, altering rates, and automating your invoicing process may help any SaaS company expand significantly.

Author’s Bio:

Deepali Daiya is a communication expert who excels in understanding customer needs. She writes powerful sales scripts and articles with very high conversion rates. Currently, she is associated with Sage Software Solutions, a leading distributor of high-quality ERP and CRM systems to small and mid-sized businesses in India.