Sunday, 3 October 2021

SaaS Onboarding & Payment Collection

Overview:  Selling a SaaS generally can be split into B2C and B2B.  Both SaaS models require the ability to onboard a customer and collect the payments for the service.  And to do this a website /Content Management System is need to allow the customer to trial, buy, purchase add-on and collect recurring revenue.

B2C SaaS (small to large):  You need "brochureware", web pages that show the service and allow the user to purchase.   As I generally sell SaaS software, and B2C is often 1 off or pay as you need, I'd recommend Shopify, there are add-ons for selling digital goods.  You can always use marketplaces like amazon or eBay also.  WooCommerce (integrates with WordPress), BigCommenrce, Magento, Wix can be used for selling physical goods but need some thought and add-ons for digital goods.  All the options are not great at Monthly Recurring Revenue (MRR) e.g. Netflix, or ARR (annual, e.g. Grammarly, Blinkist) billing, or "pay as you consume" also referred to as "metered billing" or "pay-as-you-go pricing" (Uber, AWS, Twilio, Stripe, Azure, GCP) revenue models.  Pay-as-you-go pricing has variable costs but allows your to reduce the cost to your customer by only charging them for what they use.

There are plenty of add-ons but in the Shopify world it's bring in an add-on and a few moving pieces.  For a medium sized SaaS selling MMR solutions, the overhead of setting up and managing the processes is fairly steep.  As the business gets bigger, it's worth the integration or using a dedicated solution like ChargeBee.

B2B SaaS: Could use any revenue model but it is best if your product lends itself to subscription-based selling.  e.g. Office 365, Workday, Legal practice management software to manage clients and work for law firm.  For small SaaS startups selling digital services use a solution like ChargeBee (low end) or Paddle (top end).  You can use anything in-between and addons to get a solution but for the price, setup, expansion as a general rule ChargeBee is good:

  1. Recurly
  2. Chargify
  3. Zuora
  4. Chargify
  5. Stripe
  6. Billby (Good for startups)
  7. ChargeBee (Good for startups)
In the UK, we need direct debits often setup, you can look at something like Bottomline PTX.

Pay-as-you-go/metered billing:  You pay based on consumption of services you owed x for the last 30 days e.g. AWS, Azure.  I try to stay away from this model as it's normally difficult to understand and customers in SaaS as a general rule don't like complex unknown pricing models.

Traditional:  Basically, pay as you buy a license.  So you get a perpetual license.  Akin to physical shopping but for digital goods.  Shopify is perfect for this model with a digital download add-on.  E.g. bjjfanatics.com

SME SaaS Business Checklist:

  1. Where you you selling, physical vs virtual
  2. Subscription or 1 off payments (account maintenance), trials, upgrade, upsell and cross selling.  Autorenewals.
  3. Jurisdictions (Tax, VAT, shipping, currency)
  4. Cost (fees, what's included, percentage of sales, growth)
  5. Support (Tech touch, Low touch e.g. email vs 24 hrs phone support, is this subscription based)
  6. Retention (Churn, New, Length of time for customers, support churn warnings, unsubscribing).
  7. Does my billing/subscription allow me to sell on web, native mobile, marketplaces.
Methods to set the SaaS price:
  1. Value based pricing - set the price based on the value the customer saves/gets
  2. Cost plus pricing - your cost plus markup
  3. Competitor pricing - what our our competitors charging
  4. Art of adjustment pricing - set a price see how much demand, change price how does it affect demand, MRR and total expected revenue.
Metrics to capture in SaaS Sales:
  1. MRR
  2. ARR
  3. CLV (Customer lifetime value)
  4. Churn rate
  5. Cost of Customer Acquisition

Marketinghttps://sproutsocial.com/

Support:  It's important to minimize human support effort, automating as much as possible is key.  Bots, knowledge articles that are easy to find are awesome.  Coveo does a nice job of setup for community channels.

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