What’s the one thing SaaS buyers always look for? They want a positive experience. What if you can leverage this experience and transform it into loyalty to generate great business revenue?
The thing is, you can do all this only if you offer a recurring fee model. For example, customers will pay a monthly fee instead of making hefty one-time purchases. These can ensure a robust business model and lead to financial stability.
However, there’s one thing you’re probably worried about. Is this model a fit for your ‘particular’ SaaS business? Well, shifting to this business model is like applying a positive SaaS monetization technique. That’s irrespective of the services you offer.
Let’s learn how you can take your customer relationships from one-time to long-term. We will share a few secrets SaaS businesses can rely on to generate recurring revenues.
#1. Create a Pricing Strategy that Sells
What do you think are the key components ‘ruling’ the SaaS pricing strategy? These are clarity and competitiveness. For example, you need to create a pricing model that offers value to your target audience for them to stick around.
McKinsey & Company reported that long-term pricing can amount to fifteen to twenty-five percent of a company’s profits. Moreover, they state that software companies must follow these tactics to strengthen their pricing models:
- Choose a centralized pricing function.
- Invest in a pricing infrastructure.
- Use advanced AI-based analytics to offer pricing guidance.
Moreover, SaaS businesses must align their pricing goals with company values. Simplifying the models and packages can also help retain customers. For instance, you can initially choose a freemium or tiered pricing model for your SaaS company.
#2. Collaborate with the Right MoR Vendor
Choosing a pricing model won’t happen overnight. You’ll have to go through complex testing and data collection. That’s why you need the right monetization infrastructure.
To get all the benefits mentioned above, you can simply collaborate with a seasoned Merchant of Record (MoR) provider. According to PayPro Global, it’s a third-party legal entity that handles all payment processes and online transactions made between SaaS companies and customers. For example, MoRs can protect your company from declined transactions, fraud attempts, etc.
MoRs have subscription model features that your SaaS brand can benefit from while selling products online. With such a robust platform, you can offer the following benefits to turn one-time customers into loyal ones:
- Free trials and add-ons
- Customized pricing plans
- Subscription management
- International payments
- Recurring billing models
When talking about recurring billing, startup founders should know that this industry is growing at a CAGR of more than sixteen percent between 2024 and 2030.
#3. Deliver Excellent Customer Experiences
Did you know that seventy-five percent of businesses consider customer experience their top priority and have adopted Customer Relationship Management (CRM) tools? IBM also reports that companies must consider customer experience as a competitive advantage.
When it comes to SaaS businesses and subscription models, customer satisfaction takes the throne. You’ll have to offer prompt support to address client needs, leading to a better retention rate. Do you want to offer the best service and reduce customer churn rates? Then, you need a subscription model.
You can also increase the retention rate by offering regular updates to your SaaS products. Gaining insights from feedback and making improvements can also help you transform a one-time customer’s loyalty. They’ll stick around if they feel how committed your SaaS brand is to offering the best products and services.
#4. Stay on Top of the Subscription Customer Lifecycle
You might think that your job is over once you start collaborating with a subscription model provider. While that’s partly true, SaaS company founders need to go the extra mile.
For instance, you’ll have to streamline onboarding processes to help users discover the potential of your SaaS products. Remember to keep in close contact, assist them quickly, and collect usage analytics to offer a better experience.
You can consider this the first step in your subscription customer lifecycle. The thing is, winning new clients is an infinite loop that goes through the lead nurturing, onboarding, renewal, and retention phases.
You’ll need a new game plan to keep winning over your subscribers. For that, you can use the following tactics:
- Send engaging emails to your one-time clients.
- Highlight every new feature that you release.
- Offer special deals and loyalty programs.
- Help them discover your SaaS products by leveraging marketing tactics.
As you can see, SaaS companies need to transition to a subscription model if they want to generate recurring revenue from clients. With the tips mentioned in this article, you can focus on onboarding clients and offering a good customer experience.
You can use software monetization techniques, like using an MoR tool, for this. These can work as a SaaS solution that offers a robust pricing strategy. Are you ready to turn one-time clients into recurring ones in your SaaS business?
