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SaaS Challenges Your Business Faces and Ways to Overcome Them

On the highest level, there are two types of SaaS challenges: for businesses and customers. The SaaS business challenges are related to the SaaS evolution as a business from the startup launch. The SaaS challenges for customers are mostly about choosing SaaS solutions to solve specific tasks in the company. 

In this article, we’ll focus entirely on the challenges facing SaaS companies trying to survive in market competition. These include the challenges in scaling, analytics, management, etc. Let’s see what you should be prepared for.

What are the biggest challenges facing SaaS businesses today?

We decided to group the versatile SaaS challenges into the following categories:

  • SaaS analytics challenges that are mostly related to business performance evaluation and understanding how good or bad things are going.
  • SaaS management challenges that include planning and forecasting, meeting the SaaS to customer expectations, market movements, and so on.
  • SaaS sales challenges that cover a large scope of potential issues such as targeting the wrong audience, converting free to paid subscriptions, etc.
  • SaaS scaling challenges that include problem-solving in terms of growing your SaaS business and its long-term strategy.

If you wish, you can jump straight to the group of SaaS business challenges you’re most interested in and relevant to you. However, we think it would be good to first cover and learn about all the other challenges to put everything into context and it could also be helpful at the same time.

How data can help you overcome SaaS business challenges

Properly collected and organized data can answer many questions about your SaaS business such as who your target user is, what billing model to go with, what revenue to expect, etc. As a result, you will have valuable insights into different aspects of your business to build accurate forecasts and hence make weighted decisions. Efficient data management will bring the most benefit and lead to predictable company growth. What do you need to make this happen?

  1. First, a modern cost-efficient data analytics infrastructure. It should support seamless synchronization between various apps and tools you use to manage your SaaS business.
  2. Second, automated tracking and interpretation of versatile metrics for operations, sales, marketing, and finances. The self-updating dashboards showing the current state or health of your SaaS business are a solid contribution to data-driven decision-making. 
  3. Third, access to up-to-date data in a readable format for different teams. This will allow you to increase the transparency of your business processes for different team members which, in turn, facilitates achieving the expected results.

All this you can do yourself by hiring data analytics experts including BI specialists, data analysts, data scientists, and others. So, you basically need a data analytics guild to face different SaaS business challenges. Sounds scary, isn’t it? 🙂

If you have a SaaS startup, it’s not necessary to be like this. You will be able to cope with these tasks with a smaller team of marketers and engineers. A data analyst would ideally complement your team of experts. 

Metrics are the driving force of efficient data analytics

Whichever team you possess, the most important part of data analytics is to define the metrics to track and to find out how to make it in the best way. You will need to select a tool for data visualization and try to set it up with your team. From other companies’ experience, the overall process can take a few months. If you did everything right including the selection of proper metrics from the start, then you will have an instrument to make smart data-driven decisions. 

An alternative and better way to achieve efficient data analytics results is to consider guidance from experts in this field. Coupler.io offers a data analytics consultancy service to make everything up and running in a couple of weeks, and in a proper way. This will save you precious time and money keeping you from mistakes and numerous iterations.

data consultancy coupler

This is a team of experienced data analysts who can help your SaaS business cope with any challenge you have. So, they are able to set up your data infrastructure from scratch or build different dashboards stuffed with the required metrics. The more important value the Coupler.io analytics team can give is to share guidelines on how you should act on the data you see to derive the most actionable decisions.

This is not just a fancy description without any hands-on implementation. Below, we’ll check out the challenges facing SaaS companies and examples of how data can help you overcome these. 

Decision-making as one of the main SaaS analytics challenges

Do you know why so many SaaS startups fail? The most common reasons are no product-market fit, being out of cash, not having the right team, and so on. However, there is one challenge that lies under all these reasons. And the failed startups did not manage to overcome this principle SaaS challenge – make the right decisions.

The right decision is the one that allows you to achieve the forecasted result based on a thorough analysis of different metrics. 

So, the right decision is the decision driven by data. Unfortunately, not all SaaS startup founders or executives make decisions based on data. Instead, they rest on gut feelings or some serendipity. It may work occasionally, but at one time or another, your gut feeling will let you down. This is not going to happen if your decision-making is data-driven. 

The main SaaS analytics challenge is to understand how you can make data-driven decisions. Well, raw data that you can collect from different apps and tools may look messy until you refine it and make it readable. Bringing up some figures together allows you to derive metrics to rest your decisions on. The most valuable metrics for SaaS products are monthly recurring revenue (MRR), lifetime value (LTV), and the already mentioned churn rate. 

So, the challenges you have to face are how to calculate these metrics and what data you will need for this. 

How to overcome SaaS analytics challenges

Coupler.io is a SaaS product itself and its data analytics team knows all the ins and outs of these analytics challenges. As an example of our experience, we’ve tailored the following MRR Breakdown dashboard that allows businesses to track their performance monthly.

6 mrr breakdown dashboard

But it’s only a part of a bigger analytics dashboard with an overview of product revenue and cash flow. Having all these metrics in one place significantly facilitates decision-making.

SaaS management challenges

Let’s talk about the challenges that SaaS businesses and especially SaaS product owners face. Those are mostly associated with balancing the business and making decisions to keep the SaaS product in line with its business goals.

  • Challenges in planning and forecasting SaaS business

What revenue do we expect to generate next year, how big will our user base be in a week and other similar questions can be answered with the help of forecasting. However, the forecasting itself requires certain activities:

  • Defining the key objectives to forecast

To make an actionable forecast, you need to understand the objectives you want to consider such as cash flow, number of users, conversion rate, etc. This will let you understand what type of data you will need to collect and analyze for a forecast.  

  • Collecting the right data for planning or forecasting

Based on the chosen objective, you know what historical data you need to collect and analyze. Now, you have to understand where you can get the required data. This could be raw data from different sources or the already processed records in the form of key performance indicators.

  • Managing the data workflow for your forecast

The data workflow management means that you need to organize the collaboration between different executives or teams in order to implement the forecast. The data can be extracted from different tools or provided by different experts to one repository where it can be analyzed using the chosen model.

  • Have a finger on the market’s pulse

Another SaaS management challenge is to be reactive to the continually changing market. Your competitors do not stand still, so neither should you. A successful SaaS business is flexible and responsive to any changes in the marketplace. Scoping a product will be useful here. This includes understanding the UX needs, technological implementation, versatile business intricacies, and many more. The knowledge of all these components will let you prioritize resources efficiently to maintain the stable development of your SaaS business.

How to overcome the SaaS management challenges

Proper data analysis is the only way to forecast and plan your SaaS product evolution and timely response to any market changes. You can make predictions based on the historical data you collect, analyze customer satisfaction with your product, and track your performance retrospectively. 

As an example, check out this Customer Success dashboard tailored by data analysts from Coupler.io. 

2 customer success

It’s a simple yet insightful tool that lets you understand how well your SaaS product solves the problems your users have as well the performance of your support team. The SaaS dashboard gives you an understanding of where there is a gap or what you can do better. As a result of the proper reaction to the figures, you can increase customer retention, optimize your workload and make many other actionable decisions.

SaaS sales challenges

SaaS sales process covers much more than just selling a product. It’s also about attracting leads, converting them into customers, retaining and upselling them. So, you should expect many SaaS challenges in this regard, and here are a few of them:

  • Targeting the right audience

The key question here is who’s going to buy your SaaS product. This may cover occupation, niche, region, skills, and many other parameters describing your ideal customer. And your goal is to define her or him, so you can direct your selling efforts to the proper channel to reach the right audience. 

  • Converting free users to paying

If you provide a free subscription for your SaaS product, you will have a constantly increasing base of users who are not paying. Of course, you’d like to change this and persuade them to upgrade to the paid subscription. And this is a challenge since you can do this in many different ways from promoting killer features to completely abandoning the free subscription.  

  • Improving customer retention

Do you know why your customers may be leaving? Some may not be satisfied with pricing, and others may want more features or just leave because they are no longer using your SaaS product. If you know the reasons, then you’ll be able to react according to the resources available. But first, you need to ask them and collect the data. 

How to overcome SaaS sales challenges

To cope with the SaaS business challenges related to selling, you need a respective overview of your sales. Maybe you are too good and there is no need to change anything. Or, on the contrary, things may go worse, and significant changes can save your business from dropping. Such an overview can be done in a simple and readable way like on the following Sales dashboard made by Coupler.io analysts.

3.sales dashboard

Of course, one dashboard won’t solve all the challenges you may have, so it’s better to collect as many insights and metrics as possible including churn rate, leads dynamic, marketing channels overview, and so on. 

SaaS strategic growth challenges

The SaaS challenges mentioned above are a walk in the park. Whereas, the SaaS scaling challenges are a marathon since they are associated with the strategic growth of your SaaS business that includes the following core components:

  • Operational efficiency – you need to optimize the use of all kinds of resources including people, infrastructure, and others to build a solid foundation for growth. Measuring the inputs of your SaaS business’ operational efficiency, you’ll be able to project the outputs such as performance, customer satisfaction, quality of service, etc. 
  • Financial management – the state of finances is essential to understand the health of your SaaS business. In addition, it plays an important role in strategic growth which requires significant investments in certain areas of the business. Proper financial management will give you a powerful tool to manage business growth.
  • Sales and marketing strategy – marketing and sales techniques you are implementing not only allow your SaaS business to be competitive  but also scalable. Considering the existing marketing strategy, you can make investment-wise decisions on SaaS growth. 
  • Product development – building a product that users love means adding to the value it provides by means of new features, functionalities, buttons, integrations, and other stuff that will make your product competitive. This entails a lot of challenges such as prioritization of new releases, allocation of resources, and so on.

Each of these components is an epic challenge that will involve smaller challenges making a network of tasks to be done.  

How to overcome SaaS strategic growth challenges

SaaS product strategy is what a product will look like in a long-term perspective. For example, Mailtrap was a simple SMTP server at the very outset. Strategically, its creators saw it as an email testing platform. Therefore, product growth was carried out in accordance with this strategic vision. 

To deal with any SaaS scaling challenge, you need to know exactly the current status of things. Then you can make forecasts and plans to nurture the strategic growth of your business. 

One of the tools you will need to facilitate strategic growth is the Product funnel dashboard like this.

2 sales overview

It shows the path your leads are going through and indicates whether you can scale the funnel right now or you need to optimize it for now. Such a dashboard along with others will be a reliable tool to make decisions on strategic growth.

Are there any more SaaS business challenges?

A lot! What we’ve covered in this article are a few high-level SaaS challenges that any startup or product faces. They, in turn, comprise middle and low-level challenges that are specific to each case or situation that you have. However, there is one magic pill that will aid you to cope with most of these challenges – it’s data. The data that you collect from analytical tools, users’ questionnaires, advertisements, and other sources contain all the answers you need. Although we consider the data as a means to overcome SaaS challenges, it hides one challenge in itself – how to read the data. This is what Coupler.io data analytics consulting service can help you with. Good luck with your data!

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