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Common Mistakes a SaaS Business Should Avoid

2 November, 2022
3 mins

The SaaS (Software as a Service) niche is getting progressively renowned and crowded. It is currently one of the fastest-growing industries in the world and is projected to grow further at a CAGR of 11%.

SaaS leaders are now looking for methods to shore up their stance in the market. When your business has a stake in this fiercely competitive game, there are a few things you certainly don’t want to get wrong. If not, you risk falling out of the race completely. However, this competition can end up making things tougher for the traditional businesses that are yet to be moved into the recurring billing niche. A report by Gartner states that by the end of 2020, about 85% of them will be opting for the SaaS subscription-based business model in pursuit of growth and profit.

To ensure that you drive your SaaS business towards impeccable growth, we’ll discuss some common mistakes that a SaaS business leader makes. These will also empower you with the actional recommendations and effective practices your business should adopt. So, without any further delay, let’s dive into it:

Common mistakes to avoid in SaaS business

1. Entering the growth mode too swiftly

After the product is built, it is natural for business leaders to have the desire to hire sales professionals quickly. However, before ramping up the sales, you should ensure a stable customer base at your disposal. In the early stages of the SaaS business, the best channels for the growth of the product are the minds behind the product itself – the founders. These founders are the evangelist of the product – people who have a complete understanding of the product and believe in making it successful. When you are ready to get sales professionals on board, it is vital to start small. Businesses can often create issues for themselves when they hire several sales staff initially, only to lay them off due to poor sales performance of the business.


2. Getting the wrong sales professionals

When your SaaS business is all set to ramp up its revenue, the first idea you could get is to hire a vice president for the sales department. This is one of the most common mistakes that often disrupt the smooth functioning of the business. Your business doesn’t require a head of sales in the initial stages of the business. Instead, it needs a passionate and talented pool of sales professionals. Make sure to hire staff with a combination of entrepreneurial and sales experience. Even though prospects with a good amount of sales experience might appear more attractive, they might come with qualities that are counter-productive to the learn-and-develop mentality required during the initial period of a business.


3. Establishing unrealistic objectives

In 2018, the SaaS leader Salesforce published a report forecasting future trends in sales. As per that report, more than 55% of the sales professionals did not achieve their annual objectives. They also determined the reasons why these objectives were not attained. The biggest reason was that many businesses ended up establishing unrealistic objectives. Setting unrealistic targets can lead to burnout of the teams and hence, should be set considering past performances. These should be reasonably attainable to motivate the workforce, as they can become disengaged when the objectives become out of reach.


4. Unsatisfactory customer service

Yet another common mistake that often derails a SaaS business’s functioning is not being attentive to customer service. This mistake must be avoided at all costs, as potential customers and users can easily get frustrated. No matter what type of product, business model, or pricing you have on the table, your user or potential user demands and deserves good customer service. The main bit is that you don’t even need to get an entire fleet of customer support reps on board for this. Other great alternatives, such as self-help knowledge bases, can help you provide the best support to your potential targets.


5. Hidden pricing options on the website

No matter what industry a business belongs to, having an online presence is the hidden prerequisite for success. This presence can be optimized by having a good marketing strategy for the content, using effective channels to promote a freemium version on different outlets, and ensuring that the website is well-optimized. Most importantly, the website should have transparent pricing. So, if you want to make your SaaS business successful, make sure to let the pricing options be known from the get-go.

Need more assistance with growing your SaaS business? Reach out to us today!