Why SaaS Businesses Are In a Unique Position to Survive This Crisis The world of business has turned upside down, but it's not all doom and gloom. The world of SaaS is showing its true colors.
By Thomas Smale •
Opinions expressed by Entrepreneur contributors are their own.
At this point we are all aware of the global health crisis' outsize impact. There have been government-imposed lockdowns, market retractions and an upheaval of social norms, and no one is quite sure how it's all going to play out in the long-term. As my company provides M&A advisory services to a wide range of online businesses, I have had a good overview of the effects of this crisis on small- to medium-sized SaaS businesses. The effects have been varied.
SaaS businesses have been in a unique, perhaps even privileged position over the last couple of months. Many SaaS businesses operate with lean teams that are already used to remote working conditions. SaaS businesses are also (mostly) free from the supply chain issues reaping havoc on other business models, including other online business models. But to say SaaS is currently a safe haven would be an exaggeration.
Related: Building Success: Insights from 7 Leading SaaS Companies
The losers in the SaaS space
Anyone who had been planning to attend SaaS conferences this spring will have noticed the postponements and cancellations. SaaStock, like many others, has gone remote, and how well-attended these remote conferences will be is anyone's guess. No one will argue that the loss of personal contact for many in the SaaS industry will translate to losses not just for those running these conferences, but those who depend on conferences to forge new connections and promote their established or fledgling businesses. While many SaaS businesses can survive this temporary setback, some startups may have just lost key promotional outlets in their crucial early stages.
Smaller, burgeoning SaaS business will be facing a harder time than many other SaaS businesses, as will businesses that depend on their business employees not being furloughed. The ease of downgrading monthly plans will be a major benefit to many businesses over the next few months but will hit some SaaS businesses hard.
SaaS businesses get smart
One of the great advantage of owning, running and working for or with a SaaS business is the malleability and speed with which a well-oiled SaaS can operate. Video conferencing apps, for example, have had to move quickly under strenuous conditions, but they are rising to the challenge. Zoom has already added more users to its app than it did in all of 2019. WhatsApp has quickly added group calls to its service due to the heavy demand. Temenos, the banking software company, is currently launching new SaaS propositions to help banks right now, including digital engagement technologies, "explainable AI" and more. Fender Play, a guitar tutorial app, has used the lockdown as an opportunity to onboard as many bored, isolated new subscribers as possible by offering three months of free guitar lessons. Clearly, businesses that can move quickly in a crisis could stand to benefit. And, on top of this, the reliability of the SaaS recurring revenue model will only help to prop up these businesses and reassure investors over the course of this crisis.
Related: Here's How To Make Your SaaS Marketing Strategy Generate Revenue
Conveniently, some of the greatest business minds in the world are also working in SaaS, and their innovations often disseminate across the industry before leaking into the wider business world. While other businesses may struggle to keep afloat as orders and inquiries dry up, many SaaS businesses will be taking a forward-thinking approach to the post-crisis world and how their SaaS may capitalize on possible societal changes. Symptom-checking apps and contact-warning systems are one of the obvious areas for innovation, and if lockdown orders do come in waves, then non-governmental versions of these apps could appear, and subscription perks could include anything from medical advice to health insurance policy renewals.
Standard protocols to deploy
While communicating with our SaaS clients, I have noticed some standard practices that all SaaS businesses should be deploying if their services are in any way affected by the global health crisis.
1. Send out a message to your customers
You have probably noticed the recent flood of emails from businesses outlining responses to current events. While sending this style of communication to your clients might not be essential for every SaaS, many businesses that are suffering from a slowdown in customer support or outages of core services need to draw up a comprehensive email containing links to where customers can receive regular updates.
2. Build a dedicated updates page
Following from the above, a dedicated page where relevant updates to your service can be posted is highly recommended. This should be linked to from your blog, if you have one, and can be pinned to your social media accounts.
3. Create an updates banner
A banner linking to your updates page should be placed on your website's homepage — and make it visible on any product app or interface if possible. Have you had to cancel promotion events recently, or are you scaling back your services or providing a great new offer? Put it in the banner.
4. Create a task force
Within your company, there should be at least one dedicated employee responsible for communicating updates to the rest of your employees. They should also be working to ensure that remote workers are being regularly communicated with and their needs are being met.
5. Create a centralized, internal communications channel
Put everything related to the crisis and all updates in a single communications channel – if you use Slack or Microsoft Teams, create a channel that your employees have access to and can post questions and updates in.
The future of SaaS
The crisis will affect different SaaS businesses in different ways but, as a sector, SaaS is bearing up well. We have been seeing strong interest in SaaS business acquisitions, and the future of the way we work and communicate, now more than ever, looks to be reliant on SaaS solutions. If you are interested in learning more about the current state of SaaS, I recommend signing up to some of the online versions of conferences like SaaStock; it helps to support the SaaS community too. Publications like SaaSMag (full disclosure – I help to edit this publication) can also be useful for keeping up to date.
Keep watching this space, as this is the moment that many SaaS businesses are set to come of age.
Related: 7 Best Apps to Help Your Team Thrive While Social Distancing
