The subscription-based businesses, or what is more popularly known as SaaS (Software as a Service) businesses, might look like a very lucrative industry because of its increasing exposure and growth rate, but this profitable industry comes with various challenges. Some of the most common problems that you will face in this modern era industry are measuring business performance, filtering the different ways of monetization, and implementing them to get expected results, not able to find too much information about marketing related to the SaaS industry and much more. But this blog post is here to help you out with one of the SaaS industry’s most significant needs, and that is the monetization of the SaaS blog.
Even in the SaaS industry, churning is a normal thing, and by churn, we mean losing old customers to add new ones. But one crucial thing that you should know here is in the SaaS industry, the cost of winning a completely new customer can be a bit higher than all other sectors. This is why it is said that all the SaaS-based companies out there that will have too much churn rate will never be able to get tangible results from their efforts and become successful.
So, without any further ado, let’s begin our journey of monetizing SaaS blog without any hassle and make your firm stand out from the crowd while being profitable.
The importance of revenue recognition in the SaaS industry
Before learning how to monetize your SaaS blog, there is one more important thing that you need to know, and that is ‘why revenue recognition is so much important for the SaaS industry.’
A SaaS model based firm will always charge his customers an upfront price for all the services that will be delivered over a particular period of time. But both International Financial Reporting Status (IFRS) and Generally Accepted Accounting Principles (GAAP) say that a firm can never have any type of revenue, until and unless they start rendering a particular service for that number of customers.
This is one of the primary reasons all the SaaS model-based businesses out there have to keep an eye on the money coming to their account and analyze how much money in the account is recognized.
In addition to this, two boards cover all the bases of revenue recognition for all the SaaS businesses out there, and these boards are the Financial Accounting Standards Board and International Accounting Standards Board.
The top three ways to of monetization
All the things that you do in your business follow a planned and actionable process, and you should move forward with monetization with the same approach. We have included the top three monetization methods, which are key drivers to success.
Quantifying the buyer persona
If your firm is lacking a buyer persona, then you are surely missing many things in your firm that might slow down your growth rate. The first key to monetization is understanding who your customer is in a very detailed manner. If you are not sure about whom you are pushing your pricing pages, you will never come to know what to include in your pricing page to make it more engaging. And more importantly, you will never be able to retain these people if you will not know who they are.
If you want to begin on the right foot to build a buyer persona, you can start your journey by asking different questions to your customers. But you can’t just ask any question as you will need to be specific about what you are trying to get from them. It will be essential for your firm to collect information about pricing, features, and demographics.
The main idea behind asking these questions will be to know your customer values, as this will help you align your pricing with it. In the demographic section, you can ask your age, income, and packaging information, you can ask your customer about patterns and mechanical items.
Implementing a pricing process
You will have to make sure that monetization in your firm is just a part of the process, but most SaaS-based companies are not able to focus on this, and that’s why they are not able to stay productive with their method of monetization. You will be surprised to know that an average company spends only 8 hours throughout their business lifecycle in pricing. Do you think that any business out there can become successful by spending just 8 hours on sales, product, and marketing? The answer is obvious, and this is the main reason you shouldn’t just spend 8 hours on pricing as well.
There have been various research conducted on businesses, and it has been found that most of the companies lack expertise, pricing, and process when it comes to pricing. The first thing you will need to do is commit to your pricing and then assign a particular and dedicated team to keep tabs on the overall pricing model and the changes made in pricing for various reasons.
If you succeed in building pricing as a process in your firm, you will be able to become more serious about it, and with the improvement of your product or service, your pricing will also increase accordingly.
Taking advantage of the multi-price mindset
There are only two ways out there through which you can fuel your SaaS business growth, either through your existing customer or through your new customers. There can never be a third way of making your business profitable. And this is the most important reason you will have to start using a multi-price mindset in your industry.
To acquire a multi-price mindset in your business, all you will need to do is start using feature differentiation. This approach is best conveyed through a pricing structure based on the tiring system, and in this case, every tier will appeal to a completely different persona. You should know that value metrics are the basis of this pricing structure, and you will surely be able to become efficient with your monetization approach in the SaaS industry.
Another important thing that you need to know about a multi-price mindset is that it is an adaptable approach, and it is entirely focused on generating more profit for your SaaS business by merely appealing to the vast array of perception of value. So, you will have to leave your selling approach at a fixed price behind and try to match the price with the different types of customers’ needs.
Monetization is undoubtedly one of the most critical factors that a business will need to focus on, especially if you are in the SaaS industry. There are two main reasons why monetization is going to matter a lot for your business; first, it is a low-cost approach, and secondly, it is one of the most effective ways out there that you can use to maximize your overall value. You should never make the mistake of not taking the pricing seriously, as this can hurt your SaaS-based business in many ways.
You should know that you can easily overcome the vast array of challenges of the SaaS industry if you can stay right with your monetization approach because this is the area where most SaaS industries suffer. Use this blog post as a guide and make the required changes in your monetization approach.
There’s much information on SaaS metrics, and we recommend keeping things simple. Even though COVID-19 has changed the dynamics a lot, efficient and predictable businesses will always stay.
When it comes to measuring your business competence, we recommend tracking your Gross Margin CAC Payback. When it comes to predictability, you can’t ignore critical indicators such as Net Dollar Retention, Up for Renewal Analysis, and LTV/CAC. These measures work together to provide remarkably good insight into the health of a software business.
Straight talk? Figuring out how to blog and make money from it is difficult. There is no one-size-fits-all solution, as success in blogging often comes down to the commitment to your site, including tangible and intangible. However, if you focus on building a unique, relevant site that engages your users, you can start to capitalize on your blog traffic with display ads, premium content, membership tiers, affiliate marketing, and sponsored content.
Monetizing your blog takes time, patience, and perseverance, as it can take years of hard work before your monetization strategies start paying off. That said, everybody has to start somewhere, and we’ve got the tools to help. Reach out to Saffron Edge to plan your next inbound and content marketing strategy and how we can help you increase your revenue with the right tactics and measurements.