9 Common SaaS Model Mistakes You Need to Avoid

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Despite the fact that SaaS models have high adoption rates, there are still mistakes committed by business owners here and there that undermine an application’s full potential.

These mistakes can stall or even bring the company’s growth to a complete halt. And this is not a phase you would like to be in especially at the early stages of your enterprise.

Whether you are a SaaS startup owner or a SaaS user, it is important to know what these common mistakes are, and in this article, we will discuss nine of those that you need to watch out for.

Common mistake #1: Committing pricing errors

Despite incorrect pricing to be one of the biggest mistakes you can commit when it comes SaaS models, we have to admit that SaaS pricing is not entirely easy.

It is like trying to hit a moving target considering how the environment changes constantly.

When it comes to pricing, there are tons of different errors you have to avoid.

Hiding your prices. Not having a pricing page on your website is a fatal move.

When the price is withheld, there is no way for your leads to know how much it is going to cost them if they decide to pursue your service. It is also one of the common reasons why they go to your competitors where prices are detailed clearly so they can make a proper decision.

Make sure you have a pricing page on your website and the figures are clear and updated. This is also a better approach than having them accomplish a contact form and making them wait for your response. If there will be additional charges that are yet to be determined, do not forget to include a disclaimer.

Having only one price. Not all customers are built the same. The purchasing powers and requirements vary from customer to customer. Having only a single price option may be problematic for your leads who cannot afford the whole package or are only keen on using just a few of your service’s features.

Having a tiered pricing structure where you have different service packages on offer will make your service more accessible to your customers. You are more able to meet different needs and purchase capacities.

Having too many prices. Not only is having one price a mistake, but having too many choices is just as unwarranted. Having too many package options can complicate the entire buying process for your leads. Avoid overwhelming your customers. Although there is no optimal number, most SaaS startup companies limit their services to three packages.

Using the wrong value metric. There are SaaS companies that use ‘per user’ pricing where customers pay for a service depending on the number of people who will use it. This can be discouraging for some especially if a customer, who needs to pay for 50 user accounts, only wants some of your service’s basic features.

‘Per user’ pricing is usually not the best way to qualify your prices. Identify your value metric or how you are determining your prices correctly. It should be in line with the perception your customers have of your service.

Pricing based on competitors. While there wisdom in looking at your competitors’ rates as a starting point, what you should base your prices on is the value your customers have on your service and not how it measures up to your competitors.

After all, customers do not mind paying more if they know they are getting exceptional services in return. Constantly referencing the prices of your competitors can undervalue or overvalue your service. You know the value of your product more than anyone else.

Common mistake #2: Call to action is too weak

You are not making the most of your website traffic if you are lacking a call to action button.

When it comes to your company blog, no matter how interesting or engaging your posts are, if there is no information on how your readers can get in touch with you to learn more about your service, then you are losing plenty of potential conversions.

Instead of letting them scour your website for your contact details, always have a relevant CTA in the middle or at the end of your blog posts. On your website’s homepage, make sure you have your contact details – phone numbers and email addresses – easily seen.

Saas Call to action is too weak

Encourage action on your website by making your CTA a big stand out on your page too. Help your customers easily find it by using bright button colors and through engaging copy.

Common mistake #3: No value proposition is mentioned

A common mistake committed especially among SaaS startup companies is completely undervaluing the service they are offering. One glaring reason why this happens is because SaaS models are regarded as alternatives and often cheap options to the the traditional enterprise software.

Another reason is SaaS sellers, in the effort to undercut the competition, sees that lowering their prices will make them more likeable to their prospects. Remember that charging low for your prices should never be your unique selling point.

There is also the idea that on the side of the developers, since it was easy to build the service, then it would be wrong to charge so much. This is another miscalculation because while it was easy for you to create it, the value it has for your customers can be tremendous.

All these reasons may be valid to a degree, but these should definitely not be the case. After all, the developer of the SaaS model will be responsible for all the infrastructure burden for the clients from updating the software on a daily basis to keep it running smoothly to reacting to market changes and answering client issues. Any bugs or errors in the service are for the developer to fix.

Never undervalue your service. To refrain you from doing so, ask yourself – what will my customers get out of my product? What problems will it solve? If you keep undervaluing your service and thus your pricing, it will be difficult to raise prices later on when you have to.

Below are some great examples of how to communicate your unique value proposition to your customers. These value propositions are short, memorable and captures the overall value of the web application.

SalesforceIQ is a CRM solutions company for small businesses. Its value proposition – Smarter Selling, Better Relationships. Supercharge Your Sales Team With Relationship Intelligence – does help set themselves apart from other similar SaaS companies. It’s easy to identify what’s in it for customers and the statement is powerful enough to sign up for a free trial.

SalesforceIQ

Mint, a budgeting app also has one of the best value propositions we have seen. That Horizon Might Be Closer Than You Think. We’ll help you get there by managing money and budgets better every day is definitely a strong and captivating form of communication that will prompt visitors to take action starting on the homepage.

Mint

BigCommerce is a popular ecommerce platform and has a unique value proposition that also doubles as its main call to action – More traffic, higher conversion and unmatched performance for your online store. Start your free trial.

BigCommerce

Common mistake #4: Undermining your users’ existing expertise

When marketing to your prospects, it is critical to determine how tech-savvy they are because it will definitely change the way you will sell your service to them.

If your prospects have very little technical background and knowledge with the service you are selling, you need to come up with a simple user interface and highlight that aspect as you pitch to them. Similarly, if your prospects are already quite familiar with what your service does, the advanced or premium features of your service should be the highlight of your sales dialogue.

When dealing with your not-so-savvy prospects, take your time to explain clearly and as simple as possible what your service is all about. Conversely, if you are pitching to IT professionals and engineers who have the same level of expertise as you do, prepare to answer tougher questions.

Framing your users with your service is the best way to set expectations straight and hopefully make matters easier for your prospects to convert.

Common mistake #5: Not having a great website for reference

It’s impossible to sell a SaaS model without a website as a reference point for your leads. And you have no reason not to have the best one since part of having experience in creating software is knowing what a site with great user experience looks like.

More than the aesthetics, what your website should do is convert your traffic into paying customers. Check out some of the best SaaS websites that you can check out and get inspiration from:

BambooHR is an HR software designed for SMEs. The headers are fantastic, the navigation bar is sticky and the options change colors once hovered or selected.

BambooHR

Dropbox is a popular file hosting service that also happens to have one of the simplest websites online. It is clean, there are no clutters on the page, which makes it easy for anyone to pull up the page for the information they are looking for. The navigation bar is also sticky and the signup form on the homepage is very short, translating to higher conversions.

Dropbox

Invision is a “prototyping, collaboration and workflow” application, which is possibly one of the best websites design-wise, which isn’t surprising because they are a design company.

Invision

Slack, a team communication app, is probably one of the best SaaS websites out there – it’s organized, it’s easy to navigate, it has a neat way of capturing email addresses for lead generation and it has the coolest homepage. Every refresh of the page features a client story, which works effectively as a form of social proof.

Slack

Hootsuite is a social media management tool that allows businesses to seamlessly track their various social media accounts in one place. They have the simplest layout and design for their website. Links to their different products, plans and certifications are part of its sticky navigation bar.

Hootsuite

Checking out the website of your competitors is not a bad idea at all when you are looking around for the best SaaS websites for inspiration.

Common mistake #6: Not doing enough marketing

No matter how stellar you think your service is, if you are not marketing it well enough, then you won’t be able to have as many new customers as you can as possible. If you are looking for new customers, your marketing efforts should be guided with a clear content strategy.

The best way to communicate the value your service has for your customers is to establish yourself as a thought leader. In terms of your content strategy, know the different keywords often mentioned around your product and create an editorial calendar from there.

There are different approaches you can also take as you craft your editorial calendar. Together with the other marketers in your team, brainstorm topics together and research relevant keywords using reliable keyword tools. If you are working with SEO consultants, have them identify your main keywords for you.

Regardless if you are starting mid year or at the end of the quarter for your marketing requirements, manage to create an editorial calendar that’s good for a full year. If there are trade shows that you can attend during that time period or if you are planning some upgrades to your SaaS model, include that in your schedule too. Anticipate what your major events are so you can properly prepare the necessary marketing materials for it.

If you want to ensure that your marketing content is representative of all the knowledge and inputs of your team, assign topics to each of your members. Don’t forget to integrate it with the priorities of the marketing department too so it all gels together once it is published whether as a blog post or as a marketing collateral.

Consider doing a variety of formats for your marketing messages as well. Produce videos or video blogs, blog posts, whitepapers and ebooks. The more sharable these are on online, the better your chances that these will reach a wider audience.

And don’t forget to track your editorial calendar. Know what’s working and what’s not, what are the parts of your content that you can finetune and more. When your marketing strategies are solid and implemented right on schedule, your customers will naturally come to you.

Common mistake #7: Buying your leads

And related to not doing enough marketing, another common mistake you should avoid committing is buying your leads or an email list.

While that is convenient, what if the emails are no longer being used or are overworked? What if the persons owning those email addresses have already changed companies or are holding different positions now? Also, the danger of buying your leads is most of them may have been marketed to by another SaaS company.

The moral of the story? Go the old fashioned way and find your leads yourself.

Common mistake #8: Failing to acknowledge competitors

It is natural for your leads to do comparison shopping for the web applications they need. The early stages of any purchasing decision are all about finding as many options as possible and picking one out.

Given that it is a natural occurrence, consider acknowledging your competitors on your website to make it easier for your leads to arrive at their final decision. This not only helps minimize effort on their part, but it is also an advantage for you SEO-wise.

When you have a dedicated page on your website with different SaaS examples with key differences already highlighted, your leads will have a faster way of coming up with a decision. You can expect higher traffic and smaller bounce rates too especially if you listed memorable competitor brands on your page.

There are no hard rules when it comes to mentioning competitor brands on your site, so go ahead and test how your leads will respond to this. Also, this approach makes your sales process more helpful. Fewer questions to answer allows you to dedicate more time closing deals.

Common mistake #9: Infrequent blogging

More often than not, people refer to blogs for usability issues they want clarified. Unless a call is necessary, customers are willing to fix problems themselves with tips and information coming from your knowledge center – your company blog.

It is almost equivalent to customer support. So if your blog is not regularly updated with fresh and helpful content, then you might be losing your valuable customers. If support is not readily available, this will give them more reason to look the other way – to your competitors.

Did you know that if you want to generate sufficient leads coming from your blog, you should post articles at least 16 times in a month?

Blogging that often is good not only for utility and lead generation, but also for your organic rankings. The more articles you publish about your service and the more you use long-tailed keywords when you write it, you will more likely appear on search engines. Appearing often on search results can send a great push towards your traffic.

Keeping your blog thick is also a sign of good thought leadership. It shows that you know your service very well and you want your customers to have the best use and experience of your SaaS service.

Conclusion

If you are a SaaS startup getting ready to introduce your service to the world, make sure you avoid these 9 common mistakes we just discussed. Mistakes are good provided that we learn from them.

Your sales, marketing and customer service processes are aspects of any business that will get better over time. Avoiding the common pitfalls into the game makes you a step forward in the right direction.

Did we miss something on our list or did you commit a mistake in the past that you’ve learned a great deal from? Feel free to share them with us – we’d love to learn from them too!

About the Author

John Komarek is the founder of Pixelter. He helped over 63 e-commerce businesses boost their mobile sales by up to 183.5%. He uses advanced UX research, A/B testing, and AI-driven personalization to deliver the results. Learn more about how he can help you grow your sales.

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