Software as a Service (SaaS) was born out of the need to eliminate scalability pains that plagued the traditional software licensing model. Pains such as hardware requirements, manual updates, access limitations, and much more.
While SaaS removed the majority of these pains, it created its own new set of challenges fueled by advancements in cloud computing, diminishing capital requirements, and minimal barriers to entry.
The byproduct has resulted in the most competitive landscape the world has ever seen with exponential growth over the past decade that doesn’t show any signs of slowing down.
Companies no longer compete with a handful of vendors—they compete with dozens, and sometimes hundreds of vendors. Switching costs are low. Customer loyalty is diminishing. Industry leaders must be innovative to remain on top while lean, scrappy newcomers threaten them with very attractive alternatives.
True subscription success does not come from deals you close, it comes from the deals you keep by building long-lasting relationships with happy, loyal, engaged customers.
The benefit of the subscription business model— and SaaS—is the ability to grow predictable, recurring revenue, and if customers churn just as fast as they convert, your recurring revenue will never be able to reach its true potential.