There has never been a more exciting time to be in the SaaS business than now. As recent research shows, 2021 has proven to be another solid growth year for SaaS business, with 28% median CARG despite Covid.
Upsell is the key to growth, especially the ability to upsell usage. We've seen this time and again, in companies of all sizes and industries. But what is usage upsell? And more importantly, how can you use it to drive your business growth? Keep reading to find out.
In the early days of any company, a fast go-to-market and simple subscriptions are key to success. You want to offer a simple, all-in-one package that is easy for customers to understand and buy into. But as your company matures and the market becomes more sophisticated, customers will start to balk at paying for features they don't use, or seats they don't need.
They'll want to see a more granular pricing model that reflects their actual usage. This can be a challenge for companies who are used to a simpler pricing structure, but it's essential for continued growth. After all, you don't want your clients to feel like they're being overcharged, or like you're suppressing your profitability.
When you stop and think about it, it's amazing that we've been able to hang on to our packaged pricing model for so long. We're going to have to be more customer-oriented in the future. In other industries, pricing is aligned with their clients' output objectives.
Where clients are powerful, they force their suppliers to align. In real estate, for example, the price per square meter is the norm. In finance, it's per basis point. Output-based pricing might not be in sight in SaaS directly, but billing based on your arbitrary pricing items is not sustainable either!
Growth requires a customer-centric approach. So let's get started on that!
SaaS companies rely on upselling to grow their business. However, many SaaS companies have pricing models that are not aligned with their client's business.
This can lead to problems when trying to land and expand with clients. It is important to provide a clear insight into the cost of your services to show your clients how your pricing model benefits them. By doing this, you will be able to land and expand more easily with SaaS clients.
As any SaaS company knows, it's never easy to kill your darlings. But, as they say: eat your dog food before somebody else does it. Like many SaaS companies, you might not even have a billing system able to offer any usage-based metric.
A modern SaaS billing platform can process usage data at scale against flexible contract and billing rules and produce accurate, detailed invoices. On top of that, it gathers the data that gives you the insights to optimize your pricing and drive growth. So why not switch to a SaaS billing platform today? It could be the best decision your company ever makes.
You can try to build your billing system (which is a lot of work and may not even turn out the way you want it), or you could partner with an organization that has already built a successful billing system and can help you grow your business.
We happen to be one of those organizations. Our SaaS Subscription Management is designed to help companies like yours increase revenue from customers who use your services frequently. With our help, you can focus on what you do best, creating innovative solutions that make your customers’ lives easier while we take care of the rest!
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