These days, virtually anyone can create a website and launch a new business. If you’ve got a good idea and are willing to commit enough time to bring your venture to life, you’re already on the right track.
However, just because anyone can start an enterprise doesn’t mean achieving success is guaranteed to everyone.
There are various roadblocks on the path to building a successful business that could catch you off guard if you’re not careful. If you discover that your startup is losing more money than it’s making, you could be heading towards disaster.
Today, we’re going to cover some of the areas where SaaS startups are most likely to lose cash, so you can avoid making the same common mistakes.
#1 Limited Payment Options
Business leaders tend to assume that the most significant issue they’ll have when it comes to handling incoming cash flow is choosing the right price point for their product.
The wrong price can seriously damage your sales funnel.
Charge your customers too much, and they’ll go to your competition to save money. Charge too little, and you risk damaging your reputation and leaving them convinced that you didn’t have the right quality to offer in the first place.
However, it’s not just how much your customers need to spend on your software that makes a difference to your conversion rate. The way that they pay for their software makes a huge difference too.
Giving your clients the ability to choose between such options as paying on a monthly basis or annually can help them feel less “locked in”.
It’s also a good idea to ensure that you accept multiple types of payment, such as credit card transactions, debit cards, direct bank transfers, or payments via PayPal. Some leading SaaS brands even accept bitcoin.
#2 Trust Issues
Lack of trust is one of the biggest problems that SaaS companies face when they first start building their brand. Since you’ll still be relatively new to the landscape, your customers won’t have a lot of evidence to see that you’re a trustworthy and credible brand yet.
That means that you will need to work hard to show them they can rely on you.
When you’re working on marketing your business to potential clients, think about the kind of strategies you can use to generate trust. Working with influencers that your audience already listens to is a good start. The right influential figures will instantly make your business seem more authentic and professional.
Another option is to use as much social proof as you can on your website and landing pages.
Showcasing reviews from happy customers and case studies is a great way to build more respect for your brand.
Even certificates and badges might be a good idea depending on which industries you’re involved in. Showing your affiliation with important groups on your website demonstrates that you’re not just another struggling startup.
#3 Complicated Cancellation Processes
As mentioned above, many of today’s businesses that invest in startup SaaS technology want to avoid being tied into a solution too quickly. If your customers are just getting to know you, they may not be sure whether they want to stick with your service for an entire year or even a full month.
A good way to boost your chances of conversion is to start offering free trials that generate interest in your product.
Once your customers sign up for your SaaS solution, make sure that they have the freedom to end their contract whenever they choose.
For instance, if your clients are using your solution on a month-by-month basis, they should be able to cancel one month and stop their payments from going out immediately.
Ensure that the cancellation process on your site is easy to understand to avoid making your customers feel tricked if they decide to leave you.
You can always offer things like discounts and freebies to improve your chances of keeping customers for longer, but don’t make it difficult to get out of the contract.
Make sure that your customers have the option of choosing how long they want to subscribe to your service too. Annual subscribers could get a slight discount while monthly subscribers get the freedom to cancel at any time.
#4 Inefficient Development Processes
One of the things that make the SaaS market so appealing to business owners is its agility. The technology landscape is constantly changing and improving with the arrival of new innovations, and it’s difficult to get bored in an environment that’s so flexible and transformative.
However, this also means that you need to put the right amount of time and money into developing your company.
Inefficient development processes slow your business down and stop you from staying ahead of the competition. They can also make you miss out on crucial opportunities to take larger shares of the market by differentiating your product and services.
To ensure that you will be able to roll out new developments as quickly as possible when the need arises, look for ways to improve your development processes. For instance, you could hire freelancers to gain instant access to desirable skills or introduce a new software development language or framework that focuses on regular agility and growth.
It might take a while to determine which updates will make the biggest difference to your processes, but the quicker you start testing, the better.
#5 Bad Customer Service
Few things are more important in the current environment than an excellent customer experience. Customers frequently say that they’d be more likely to stick with a company when they know they can expect helpful customer service.
These days, price and product features often come second place to CX when it comes to choosing a new SaaS solution.
If you’ve noticed that your customers are churning faster than you expected, or if you’re having a hard time maintaining repeat customers, it might be a good idea to look at your customer service strategy.
What could you do to make the experience more comfortable for your target audience? Can you offer quicker support and help to onboard your customers to their new software?
Perhaps you could provide team leaders with webinars and recordings that teach their employees how to use the service you provide or make sure that your VIP accounts have access to specialist customer success professionals.
The more you work on delivering excellent quality service, the easier it will be to both attract new customers and maintain existing ones. You might also increase your chances of getting positive reviews that you can use as social proof.
Avoid Losing Money With Your Startup
Launching a successful startup can be quite a challenge, especially in today’s competitive landscape.
However, if you can avoid the issues above that cause many business leaders to lose money, you’ll find that it’s much easier for your company to survive and thrive.
Focus on efficient development processes, good customer service, flexible subscriptions, customer trust, and versatile payment options to keep your customers happy.
If you can tackle all of those issues, you’ll have the best opportunity to build a startup that generates repeat customers and plenty of revenue in the long run.