SaaS (software as a service) is an exciting industry that is full of inexhaustible opportunities. It has not only transformed how businesses meet customer needs, but it has also transformed the traditional structure of a company. It’s a unique industry that offers a whole host of benefits both to customers and businesses, but this new way of working often brings with it some difficulties.
One of the most difficult parts of owning a SaaS business is knowing how to successfully increase the value of your business. The reason for this is because it can be extremely difficult to value a SaaS business. However, the good news is that it can be done. Here are some of our top tips to help you increase the value of your SaaS business:
1. Understand the Value of Your Business
Before increasing the value of your SaaS business, you first need to work out how much your company is worth. However, in order to do this, you will need to understand multiples. Multiples help decipher the value of any business at any time depending on present market rates and growth potential. They are affected by several factors related to the business. Those factors cover a huge variety of traffic, financial, and operational aspects, but ultimately it comes down to the scalability, sustainability, and transferability of the business. Once you understand multiples, you will be able to work out the value of your business.
2. Rebrand When Necessary
Often when we first start a SaaS business, we choose a name for our business that reflects what our business represents or does. However, as your business grows, your business model may change. The good news is that it’s possible to change the name of your business. A change in a business name can help to show your customers how much your company has changed. Not only that, but research also suggests that it can help to increase the value of your business too. However, it’s important to remember that changing the name of your business isn’t something to be taken lightly, and it needs to be done with a lot of consideration.
3. Make Your Company Easy to Contact
No matter what type of business you own, it’s always a good idea to make it easy for your customers to contact you. Almost all SaaS businesses can be contacted by live chat and email. However, while live chat and email are brilliant options, sometimes customers simply want to speak to a human being. If your customers are unable to speak to you over the phone, or in person, then this could be a huge problem, which ultimately could reduce the value of your business.
4. Target the Right Customers
When choosing which customers to target, it’s a good idea to target customers who appreciate the long-term value of your product. It doesn’t matter how good your retention tricks are, they may all be a waste of time if you are attracting the wrong type of customer.
5. Low-Cost Trial Options
In order to increase the value of your SaaS business, you need to generate interest in your product. However, offering your product for free doesn’t pay the bills. Instead of doing this, you should consider offering a low-cost trial of your products with the potential for a refund if your customers aren’t completely satisfied.
You could even offer to scale the trial based on your customer’s needs. This will help to ensure that they are receiving the product that most fits their needs. Research has shown that customers are more likely to commit to a purchase if they have been given this option.
As we mentioned above, increasing the value of a SaaS business can be difficult, particularly if you don’t understand how to value your business. However, the good news is that by following our top tips above, you’ll be well on your way to increasing the value of your business and making your SaaS business a success.