saas business principles * copyright thomond technology
TRANSCRIPT
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SaaS Business Principles
04/12/23 Copyright Thomond Technology
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SaaS Applications Are Here and Real
04/12/23 Copyright Thomond Technology
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Managing a SaaS Business
SaaS Business PrinciplesSaaS ChallengesFinancial MattersMarketing SaaSTelemarketingSelling SaaSAttrition & RenewalsSaaS and AlliancesSupporting & Consulting SaaS
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Talk on First Three Today
SaaS Business PrinciplesSaaS ChallengesFinancial MattersMarketing SaaSTelemarketingSelling SaaSAttrition & RenewalsSaaS and AlliancesSupporting & Consulting SaaS
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SaaS Business Principles
Pay as you go • Monthly subscription as the pricing basis• But does not need to reflect contract
Customer Success• It’s a Service not a product
Have employees to educate/talk to prospects• If Not, then build it and they WILL LEAVE
Accept Attrition as a factRenewals are criticalMulti Tenant / Single Tenant ArchitectureShared Risk – Opex not Capex
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SaaS Business Principles
Ease of UseTime to Value is significantly betterBi-Furcated Distribution model on company sizeHub Based SellingFree Trial for appropriate time period• Must be supported by rigorous process
Data Export Facility so that Customers feel they can easily get their data back
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SaaS Business Principles
Seed and Grow (be willing to start small)Be Open about Availability and Performance of ServiceAnnual Contracts/Size for DiscountManage Business metrics on a Monthly basisSupport is part Service PriceMultiple Service offerings differentiated by users/ functionality
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SaaS Business Principles
Service Integration with other SaaS / On-Premise systemsService is Multi Lingual/ Multi CurrencyWebinars for Education / Soft SellingMultiple small events for Customer meetings / Viral MarketingPublic Privacy Statement on all WebsitesPublic Terms of Use on all Websites
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Managing a SaaS Business
SaaS Business PrinciplesSaaS ChallengesFinancial MattersMarketing SaaSTelemarketingSelling SaaSAttrition & RenewalsSaaS and AlliancesSupporting & Consulting SaaS
04/12/23 Copyright Thomond Technology
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SaaS Challenges
Takes a long time to be profitableGenerating Cash flow can be difficultDifficult to have multiple distribution channelsSystem Integrators make less money versus on-premise solutionsSLA (Performance, Reliability, Security etc.)Low Market Acceptance of SaaS / Cloud Computing
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SaaS Challenges
Hybrid Competitors trying to confuse positioningData ProtectionAttrition – • manage and model
RenewalsCustomers are used to being regularly visited by traditional sellers
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Managing a SaaS Business
SaaS Business PrinciplesSaaS ChallengesFinancial MattersMarketing SaaSTelemarketingSelling SaaSAttrition & RenewalsSaaS and AlliancesSupporting & Consulting SaaS
04/12/23 Copyright Thomond Technology
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Financial Planning in SaaS
Revenue Model Σn = n(n+1)/2• Invoiced• Deferred Revenue • Off Balance Sheet
Pricing by unit per month• Base Price• Multi Service Offering• SMB to Enterprise Offering
Profile of New Business versus Add On is very different from traditional model
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Financial Planning in SaaS
Annual ContractsMulti Year ContractsWhat is the correct discounting Strategy?Contribution by market segment• Cost per order €• Start at SMB, Enterprise or Both
Is there an indirect model that is more effective than direct option?
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Financial Planning in SaaS
How many Sales people are appropriate• OTE, Quota, • One size doesn’t fit all
What level of supporting resources (Ratios)• Sales Engineers – In Country• Sales Engineers – Hub• Inbound Telemarkeing • Outbound Telemarketing
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Financial Planning in SaaS
Cost per lead• By Source, By Market, By Campaign
Pipe to Spend• By Source, By Market, By Campaign
Number of new business leads per sales group• (((Quota * 0.8 * No. Of AEs * % New Business) /
(Average Deal Size))/ Conversion Rate)
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SaaS Business Principles
04/12/23 Copyright Thomond Technology