A subscription model is a great way to generate recurring revenue for your SaaS business. However, getting people to sign up for a subscription can take time and effort. You not only have to create a product that people want to use, but you also have to convince them to pay for it on an ongoing basis. If you need help selling SaaS subscriptions, here are five tips that may help.
Offer a Trial Period
Most first-time visitors would hesitate to sign up for a product or service. One way to overcome their anxieties about committing is by offering a free taste of your SaaS product.
A free trial is a great way to hook new users. However, your approach needs to be strategic for it to be worthwhile. Here are common trial period lengths to try, along with their benefits.
- 7-Day Trial Period. This option is ideal if you’re offering a simple product that new users can pick up and adapt quickly, or you offer a lower-cost product and don’t want to add unnecessary length to your sales process for a modest sale.
- 14-Day Trial Period. This trial period is best for businesses that sell SaaS B2B or have products with multiple tiers and added complexity. While 14 days is still a relatively short period, it is long enough for a user to explore various features and benefits of the product while being brief enough to ensure the sales process is completed on time.
- 30-Day Trial Period. A lengthier month-long trial might be a better alternative for organizations that have more sophisticated offers or that take an enterprise approach to selling. If multiple stakeholders need to have a voice in the adoption of a product, having a longer trial time is useful.
Give a Freemium Option
According to AOK Marketing CEO Dave Burnett, one of the most important things for customers is “to experience what a brand has to offer before they lend it their cash or support.”
The freemium pricing mode is an example of a friendly business-to-business deployment that allows potential customers to experience your SaaS products before purchase. You should leave a lot of value on the table in your freemium option to pique the customer’s interest and convince them of the benefits of subscribing.
Certain industries and niches are more suitable for the freemium model. Information products like magazines and membership websites are almost impossible to sell to first-time customers. Other characteristics that your SaaS product needs to enjoy the benefits of freemium are:
- Easy to use/ Low barrier to entry. The SaaS product is intuitive and easy to use.
- Viral adoption ability. If you can get users to invite more people to use the SaaS product, the freemium option will save you a lot of money on marketing.
- Network effects. The product gets better when more people use it, and Marketplaces such as eBay and Etsy get better when more people are on the platform.
- Huge market potential. There is little to no competition, and the SaaS product solves a common problem. Take Evernote, for example. Everyone needs to take and organize notes.
Provide More Value for the Price
Customers know signing up for a subscription is more valuable to you, the seller, than a one-time purchase. One way to convince them to commit is by giving them a big return on their investment.
Take, for example, the online art school New Masters Academy. They offer art enthusiasts, and budding artists access to over 350 hours of video tutorials and more than 50,000 high-quality reference images to practice with.
“We provide a ridiculous amount of value,” says Joshua Jacobo, the founder of New Masters Academy.
While the average price of a one-day in-person art class is between $125 to $200, learning art through New Masters Academy costs only $29 per month.
Communicate Your SaaS Product’s Value and Purpose
In a saturated software market, potential customers won’t immediately see your product as the best solution, and you’re just among the hundreds of SaaS products they’ve seen.
You have to clearly communicate to customers how your SaaS products will improve their lives. Here are two effective ways to showcase your product value.
- Always focus on benefits, not features. Every SaaS product has features, but these only describe the functionality, and it’s often not enough to sell your product. Capture their attention by describing your product’s benefits and how they will bring value to the customer.
- Use case studies and examples. Case studies are a great way for potential customers to see your SaaS product’s value and relate to others using it. When putting together a case study, focus on valuable, actionable, and useful information.
Additionally, many people–especially Millennials and Gen Zs–want to align with brands and products that fit their personalities and lifestyle.
The Harvard Business School found that 95% of consumers’ purchasing decisions are based on feelings instead of logic. We tend to choose brands that appeal to our subconscious. We purchase products that match most of our traits, beliefs, and personality.
Whatever your brand’s personality, aligning your SaaS product with a purpose will positively speak to potential customers.
Win Them Over by Appealing to their Rational Side
The subscription business model has gone mainstream. You can get a subscription for just about anything from curated cheeses to book bundles. And an increasing number of people are getting tired of it.
Subscription fatigue refers to the feeling overwhelmed by the sheer number of subscription-based services available. In a survey, nearly 47% of American consumers are put off by the increasing amount of subscription services provided.
The best way to overcome potential customers’ subscription fatigue and hesitancy is to appeal to their rational side. This strategy works best when selling a business-to-business (B2B) subscription.
Thankfully, B2B software subscriptions are the least likely to be influenced by subscription fatigue since denying the SaaS product fulfills a need is tough. But you still need to provide evidence supporting your case and be logical when selling to potential customers.
Selling software as a service (SaaS) can be a great way to generate recurring revenue for your business. By following these five tips, you will be on your way to successfully sell SaaS subscriptions.
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