How To Launch A SaaS Business
Are you starting a SaaS business? Frankly, that is easier said than done. Building a SaaS company from the ground up takes a lot of time, effort, and dedication.
Not to mention that it can be quite expensive.
But if you do it right, the returns can be worth it. SaaS businesses are among the most lucrative and fastest-growing in the world.
So how do you do it?
In this article, we will talk about how to launch a SaaS business. We will discuss what you can do before, during, and after the launch itself.
What To Do Before The Product Launch
Before you launch your SaaS business, there are a few things that you need to do in order to prepare the way for your SaaS product to shine.
Here are some of them.
Set SMART Goals
The first thing that you need to do is to set SMART goals for your up-and-coming SaaS company. SMART stands for Specific, Measurable, Achievable, Realistic, and Time-bound
Your goals should be specific so that you know exactly what it is that you want to achieve.
They should be measurable so that you can track your progress. You know what that means — use the right key performance indicators (KPIs).
How much annual recurring revenue (ARR) are you targeting in the next five years? How many leads do you want to generate every month? Up to how much churn rate would you consider tolerable?
The best way to have a specific and measurable goal is to use the right KPI and put a number on it.
What’s more, your goals should be achievable, realistic, and time-bound so that you can set a deadline and work towards it. If your goals are too small, they might not make a big enough impact on your SaaS company. And if they’re too big, you might not be able to achieve them on time.
So it’s best to find the balance.
Research Your Target Market
One of the most important things in starting a SaaS business (or any kind of business, for that matter) is knowing everything you can about your target market.
You need to know their demographics, their interests, how they think, how they behave, and what their needs and wants are.
This way, you can create a SaaS product that they will actually want to use. Otherwise, all your efforts will go to waste.
In fact, it is better to know your market first before completing your product development. Understanding the needs of your target market will enable you to build a SaaS solution that actually addresses those needs.
This is a great way to ensure product-market fit.
To do this, you can start by conducting market research. You can use various methods, such as the following:
Focus Groups: You can gather a group of people that fit your target market profile and ask them about their thoughts, opinions, and experiences regarding the problem that your SaaS product will solve.
Surveys: You can also conduct surveys online or offline. The anonymity of responding to a survey might help people answer more honestly than they would in a focus group.
Just make sure that you use a reputable tool like SurveyMonkey to create your survey so that you can get accurate results.
Interviews: Another great way to understand your target market is to interview them one-on-one. You can ask them about their needs, wants, frustrations, and even how they would want a SaaS product to address those needs.
One downside of this method is that it takes more time than gathering multiple respondents in a group. But doing this one-on-one with each of them may also help them be more honest with their answers.
Competitor’s User Reviews: You can also learn a lot about your target market by reading user reviews of your competitor’s products.
And that could tell you a thing or two about the most pressing needs of your target market.
Just make sure to take those reviews with a grain of salt as some of them might be biased and circumstantial.
Test Your SaaS Product Repeatedly
Once you have your product ready, it’s time to test it out.
You need to make sure that it is actually usable and that it can address the needs of your target market. The best way to do this is by testing it out repeatedly with different users.
This way, you can get feedback about what works and what doesn’t work with your SaaS product. You can then use that feedback to improve your product before launch.
One of the best ways to test your product is by using a beta testing program.
A beta testing program or beta launch allows you to give access to your SaaS product to a group of users (usually called beta testers) before its public launch.
These beta testers use your product and provide feedback about their experience. This feedback is then used to improve the product before it is made available to the public.
Not only does this help ensure that your product is actually usable, but it also helps create a group of people that are already familiar with your product.
This can be helpful in promoting your SaaS product later on.
Choose The Right Pricing Model For Your Product
The next step is to determine how you’re going to price your SaaS product.
This is a critical decision because it will impact your entire business.
You need to make sure that you choose a pricing model and strategy that will work for both you and your target market.
Here are some of the most popular pricing models for SaaS products:
Pay As You Go: This is one of the most straightforward pricing models for SaaS solutions. Customers only pay for what they use. It’s sort of a “post-paid model” for SaaS products.
This is a great option if your target market is price-sensitive. It ensures value for money since they only pay for what they actually use.
But the downside is that it might not be very profitable in the long run as customers might not use your product that much. What’s more, your users can easily stop using your product altogether without notifying you.
Freemium Model: This is when you offer a basic version of your product for free and then charge for premium features.
This is a great way to entice potential customers to try out your product. But the downside is that some people might never upgrade to the paid version.
Tiered Pricing: This is when you offer different levels or tiers of service, and each level has its own price.
This is one of the most common pricing models for SaaS products. It’s a great way to give customers the option to choose the level of service that matches their needs and their budget.
But the downside is that it can be confusing for customers, and you might end up with a lot of unused features.
Usage-Based Pricing: This is when you charge customers based on their usage, such as how many users they have or how much data they use.
This is a great way to ensure that you’re getting paid fairly for your SaaS product. But the downside is that it can be hard to track usage, and customers might be discouraged from using your product if they think they’re being charged too much.
Credit-Based: This is when you offer credits that customers can use to access your product
This is a great way to give customers the flexibility to use your product how they want. But the downside is that it’s hard to keep track of credits, and customers might not be able to use all of their credits if they don’t use your product frequently.
Customized Pricing: This is when you work with each customer to come up with a unique pricing model that meets their specific needs.
This is a great way to ensure that each customer is getting exactly what they need.
But the downside is that it can be time-consuming. There would be a lot of back and forth between your leads and your sales teams.
Hybrid Pricing Model: This is when you offer a combination of two or more of the above pricing models.
For example, you can have user-based pricing that still varies depending on different tiers. Those who only want to try out your product may also sign up for a free plan for only one user.
As for customers that have complex needs beyond what the tiers can offer, you can also work out a customized solution.
This is a great way to give customers the best of both worlds. But the downside is that it can get too complicated and confusing for your potential customers.
So if you’re going to use a hybrid pricing structure, make sure that it’s easy to follow.
When it comes to choosing a pricing model for your SaaS product, the important thing is to figure out which one will work best for you and your target market.
There’s no right or wrong answer. So it’s important to experiment and see what works best for your business.
Craft Your Go-To-Market Strategy
When you already have a pricing model in place, it’s time to start thinking about the specific steps you’re going to take in order to launch your product.
This is where your go-to-market (GTM) strategy comes in.
Your GTM strategy is a plan for how you’re going to market and sell your product from start to finish.
It includes everything from how you’re going to reach your target market to what kind of sales channels you’re going to use.
To do that, you need to ask yourself three questions:
- Who am I selling to?
- What am I selling
- How will I sell it?
Who Am I Selling To? One of the first things you need to think about when crafting your GTM strategy is who you are selling your SaaS product to.
Are you selling to businesses or consumers?
Are you targeting small businesses or large enterprises?
Are you selling to a specific industry or market?
Your target audience is the specific group of people that you are targeting with your marketing efforts. They are usually characterized by specific demographic or firmographic factors.
For example, your target audience might be small business owners in the United States.
Your target buyer persona, on the other hand, is a semi-fictional representation of one person that you are targeting with your marketing efforts. It has more specific details, like their position in the company or the age group they belong to.
It also includes information about how they make purchase decisions. You may even go as far as creating a backstory for them so that you can put yourself in their shoes.
Creating a buyer persona can help you better understand your target market and how to reach them.
What Am I Selling? By itself, knowing who you are selling to won’t be enough in helping you know how to craft your marketing campaigns.
You also need to look inward and see how your SaaS product’s features can benefit your target audience. This is why it’s important to have a clear understanding of what your product is and what it can do
You need to be able to articulate its value proposition in a way that resonates with your target market.
Your value proposition is the unique benefit or solution that your SaaS product offers.
It’s what sets you apart from your competitors and makes you worth investing in.
How Will I Sell It? Once you know who you’re selling to and how your product can benefit them, it’s time to start thinking about how you will actually reach them and get them to buy from you.
Which marketing channels will best reach your target audience and buyer persona?
Which marketing programs would best help you communicate your value proposition?
Which marketing strategies would help you reach your goals?
Your answers to these questions will be your guide in crafting your go-to-market strategy.
Know Your Competition
In order to have realistic expectations as you launch a SaaS business, you need to know how your product stacks against your competitors.
You need to know who your main competitors are and how they position themselves against you.
In other words, you need to perform some competitive analysis.
This will help you determine how you can differentiate yourself from them and what marketing strategies you can use in order to gain a competitive edge.
Some of the questions you need to ask yourself are:
- Who are my main competitors?
- What do they offer and how are they pricing it?
- How do they reach their target market?
- What is their unique selling proposition (USP)?
- What are their sales and marketing strategies?
You can even go so far as to perform a strengths, weaknesses, opportunities, and threats (SWOT) analysis on your competitors.
By understanding these things, not only will you have a clearer view of your product in comparison to your competitors. You can also learn how to use your competitive landscape to your advantage.
Get Your Website Ready
Your SaaS website is one of your most important tools in marketing and selling your product.
This is why it’s important to make sure that your website is ready before you launch your SaaS business.
Your website needs to be able to clearly communicate what your product is, how it can benefit your target market, and how they can purchase it from you.
It also needs to have a clean design that’s easy to navigate.
And lastly, it should be optimized for search engine optimization (SEO) so that potential customers can easily find you online.
Getting traffic to your website will also be helpful with your content marketing efforts in the future.
Speaking of content marketing…
Start With Content Marketing Even Before Your Product Launch
One of the most effective marketing strategies you can use in launching a SaaS business is content marketing.
This strategy is all about creating and sharing valuable content that will help educate your target market about different concepts in your industry.
This can be in the form of blog posts, infographics, ebooks, whitepapers, webinars, and more.
The goal of content marketing is to build trust and credibility with your target market so that when you do launch your product, they will be more likely to buy from you.
Now, imagine gaining the trust of your target market even before you launch your SaaS product.
Investing heavily in SEO, they amassed a considerable audience and established the TaxJar brand as an authority in sales tax.
And when they finally launched their sales tax automation solution, it was only a matter of offering it to their already established audience.
This is exactly what you can do with your content marketing efforts.
By starting them even before you launch, you can create a pre-launch buzz around your brand. You can also start building an audience that you can market to when you do launch.
Not only that, but you can also use your content to drive traffic to your website and generate leads for your sales team.
All of these things will help increase your chances of success when you finally launch your SaaS product.
Now that we’re talking about the launch of your SaaS solution…
What To Do During Product Launch
Your product launch is a crucial moment in your SaaS business. This is because it will determine how successful your product will be in the market.
That’s why it’s important to have a well-thought-out plan on what you need to do during your product launch.
Here are some things you need to do:
Get Early Adopters On Board And Deliver Value To Them
One of the best ways to ensure a successful product launch is by getting early adopters on board.
Early adopters are typically people who are willing to take risks and try new things. That includes new SaaS products.
A lot of these early adopters make a habit of trying out new SaaS solutions and writing reviews for them. They’re also usually influencers in their respective field or industry.
You can use this influence to generate buzz and excitement about your product launch.
But more importantly, you need to make sure that you deliver value to your early adopters. This means letting them experience how your SaaS product can really benefit them.
You can do this by providing them with a free trial or free plan, or by offering a lifetime deal (LTD).
Free Trial/Free Plan: A free trial or free plan is a great way to let your early adopters try out your SaaS product without having to commit to it. This will help them see how your product can really benefit them without any risk on their part.
The important thing here is actually delivering the value of your SaaS product.
So make sure that your free trial lasts long enough so that early adopters can experience its value. Or if you’re offering a free plan, make sure that it has enough features that would benefit your free users enough to make them willingly buy a paid plan and/or tell others about it.
Lifetime Deal (LTD): An LTD is an offer where your customers can get lifetime access to your SaaS product for a one-time fee.
This is a great way to get early adopters on board because they’ll be more likely to take advantage of it if they know they’re getting a great deal.
These websites already have established audiences of early adopters. Listing your SaaS product on these sites will get you instant access to these audiences.
What’s more, if your SaaS product meets their standards, they can even market it for free.
Provide A Smooth Onboarding Process
Another important thing to do during your product launch is to provide a smooth onboarding process.
Your goal here is to make it as easy as possible for your customers to use your SaaS product. This will help them get the most value out of it and increase the chances of them becoming paying customers.
There are a few things you can do to make sure that your onboarding process is smooth:
Use Videos and Tutorials: Videos and tutorials are great because they can show your customers how to use your SaaS product step-by-step. This is especially helpful if your product is complex or has a lot of features.
Provide Live Support: Live support is also important because it allows you to address any issues that your customers may have in real-time. This way, you can help them solve any problems they’re having before they even think about canceling their subscriptions.
Monitor Your Customer’s Usage: Monitoring your customer’s usage of your SaaS product is also important. This will give you insights into how they’re actually using it and whether or not they’re finding value in it.
This information will be helpful in making changes to your product or marketing strategy.
What To Do After The Product Launch
Once you’ve launched your SaaS product, it’s time to focus on post-launch strategies. These are the things you need to do to ensure that your product is successful in the long run.
Here are some post-launch strategies you can use:
Generate Customer Reviews & Testimonials
Customer reviews and testimonials are important because they show that your product is valuable and worth using.
The first step to doing this is to create a profile on popular user review sites like the ones we mentioned earlier (G2, Capterra, and FinancesOnline).
You can generate reviews by reaching out to your customers and asking them to write a user review or give a testimonial. You can also offer incentives in exchange for their review or testimonial.
This is a great way to build social proof and increase the chances of people using your product.
But what if you get negative reviews?
It’s not actually a matter of “if”, but “when”. Every SaaS product is bound to receive some nasty comments every now and then.
Still, you can use those negative reviews to your advantage.
First, you can take the opportunity to show off how awesome your customer support team is. Your team can respond politely and fix the problem as fast as they can.
This will show not just them, but the whole watching world that you have an excellent customer support team that is ready to serve your customers. This would further attract customers to buy your SaaS product.
Or if these negative reviews actually have a point, you can take them on board and consider them for your next product update. After all, customer reviews are a reflection of the current demand in your target market.
Get Funding To Fuel Your Growth
If you want your SaaS startup to be successful, you need to have a steady stream of funding. This will allow you to expand your sales and marketing efforts.
Whether it’s hiring more people, paying for ads, or buying more equipment for your IT infrastructure, it takes some funding to grow a fledgling SaaS business.
So how can you get the necessary funds to fuel your growth?
Well, you can get creative. But some of the most commonly used routes include venture capitalist (VC) funding, crowdfunding, and bootstrapping.
Venture Capitalist Funding: VC funding is when you get investors to give you money in exchange for a stake in your company.
The main advantage of this route is that it’s instant access to a lot of money. It is a popular practice among SaaS startups because it gives them the funds they need to grow quickly.
But the downside is that you would be giving a considerable number of shares of your company to these VCs.
Needless to say, your product needs to be interesting to thousands of people for crowdfunding to work. They have to believe in your SaaS product for them to actually give money for it.
That’s why it’s a more feasible route for SaaS companies that offer business-to-consumer (B2C) SaaS solutions.
The advantage of this route is that you don’t have to give away any equity in your company.
The downside is that it can be difficult to raise a lot of money this way, and there’s no guarantee that you’ll reach your funding goals.
Bootstrapping: Bootstrapping means funding your own company with your own money, either from your profits or your own personal finances.
This option is usually only appealing to people who already have a lot of money, to begin with. But if you do have the resources, bootstrapping gives you complete control over your company since you don’t have to answer to anyone.
On the other hand, if you’re relying on your SaaS company’s profits to fund your growth, you would more easily feel the downside. You may experience slow growth as it is limited by the comparatively meager profit margin you’re generating from time to time.
But what if I told you that there was a way to get a large lump sum of cash while bootstrapping your SaaS startup?
We’ve actually already mentioned it earlier, but offering an LTD can help you quickly raise significant revenue that you can reinvest for growth.
One downside to LTDs, however, is that you’re making a one-time revenue out of it. You’re forfeiting the recurring revenues and lowering your customer lifetime value (CLV).
Final Thoughts About Launching A SaaS Business
Did you notice that a huge bulk of this blog post is about what you need to do before the launch of your SaaS business itself?
And that’s because a lot of the success of your launch will actually depend on how well you’ve prepared for it.
And as the saying goes, failing to prepare is preparing to fail.
So take the time to do your research, create a marketing plan, and build a great product. These are the foundation stones that will make or break your SaaS business.
And even after you launch your SaaS product, your job is not done yet. You still need to track your progress, analyze your data, and make the necessary changes to ensure that your business continues to grow.
If you want more guides and tips on how to grow your SaaS business after the product lauch, visit our blog here.