SaaS, the ubiquitous term for cloud-based software. A modern way of distributing software where service providers or vendors, make their software available online, through cloud-computing technology. The top SaaS companies all have certain aspects of their business in common.

In terms of SaaS delivery, users do not have to invest in hardware or install the software on their servers, but instead, the vendor hosts the software and charges a monthly fee, or on a per-usage basis. I am sure you know this already but did you know that:

Customer Support Makes All the Difference

When you first release your SaaS product, it is often incomplete and full of software bugs and overly complex actions. This is normal because the product it is still new. However, unlike your big competitors who are already established, you can use valuable time and focus on every one of your customers. This allows you to fix software issues and get to know your initial customers. Making an early and intimate connection with these customers will allow you to grow with them and tie your successes together. All successful SaaS companies offered great customer support when needed.

Have a Revenue Model to Support Your Business

At startup, most businesses are afraid to ask for money. They give away their valuable product for years while trying to establish their customer base. Although this may work in specific niches and market segments, nothing says your business is valuable more than a customer who pulls out a credit card or cash to pay for your service. Top SaaS companies build their customer base by asking for money in exchange for value. You only know you have a business when you have a working revenue model to help support your business.

Top SaaS Companies Measure Churn vs. Active Product Usage

Active product usage and churn are some of the most important metrics that every successful SaaS company actively tracks. While onboarding new customers might seem exciting at first, these clients are of no use if they leave immediately or become dormant users. Getting customers to sign up for a free trial and actively use your service is the first step towards conversion. It is easier to get active users to convert to paying users than it is to Up-Sell/Cross-Sell to dormant customers, who are eventually going to cancel their membership subscriptions.

Price Based on Customer Behavior (What They Value) and Treat Existing Customers Like Prospects

While SaaS businesses may be slow on the uptake, once they figure it out they become very predictable recurring revenue-generating machines at maturity stage. Do not shy away from experimenting with annual subscription plans up-front to channel in cash and minimize churn. All top cloud-based companies know this.

Most companies stop spending time and resource on existing customers but instead focus all their efforts on new ones. However, this is wrong, as renewals are essential. Losing existing customers means they will not renew their subscription and your revenue stream will dry up. All successful companies also pay attention to their existing clients.

Becoming successful in the SaaS industry requires hard work and strategy. These tips are what top SaaS companies all have in common. They will help you become an industry leader in your niche.