I work for a small business. Our IT guy should have quote-marks over his title. Google is our IT guy in truth. This is what a small business has to deal with. We need software solutions, but we can’t spend tons of money on software. This is why Software as a Service (SaaS) is so great. There have been quite of number of problems that I’ve solved thanks to software as a service. SaaS is also great in that I don’t have to worry about the computer with the program going down or getting the software on every computer, SaaS takes care of all that. I just have to use it and get others to use it.
My one complaint: several of these businesses still want to do things the old fashioned way. Here are 3 things I think most SaaS companies need to re-evaluate.
- Pricing
- Free Trials
- Call for Quote
Pricing
Stop pricing your service for IBM. Price it and market it so that every mom & pop store can use it. Then find a way to market it to people who aren’t in business. The number of times I saw $299/month for something that has only one user is ridiculous (Best Value $1999/mo – Really!). That’s $3,600/yr (Best Value $24,000)! A small business can’t integrate that into their budgets.
Or, at least that’s what they think when they see that price tag. One of my favorite programs is a form creator that I started using as a free version. I created the max number of forms, then realized how great it was. I convinced my boss we should pay the annual fee. It’s made us really efficient (we use it for maintenance requests, keeping track of late/out sick employees, etc) and the costs were fully justified.
This is called Freemium, and it works as a sales tool. I work under a budget that starts at $0. I have to justify every dollar above that. If I can use your service at its almost full potential, then it’s easier to convince them to give me money for it. This is different than the 14-day free trial, which needs to die.
Free Trials
I do many things at my company and 14 days is not nearly enough time for me to devote to finding out if this software works. I’ve liked some programs before and then saw the 14-day free trial and thought, “I won’t even be able to get to this in 14 days.”
Suffice to say, that software was not purchased. I’m assuming that this is based on a sales model. Get them using then they either forget to cancel or (like me) don’t have time to get to it, so they buy to actually test it. It’s sales based not customer based and that’s why I prefer the freemium model.
Freemium let’s me use it to my hearts content. Really use it. When searching for project management software I tried 3 different ones before settling on one. The ones I tried were all freemium models. I found lots more than that, but they had trial periods or ridiculously high monthly rates. Free is hard to beat. I don’t know what the conversion rates for Freemium are, but I imagine they’re higher than the 14-day free trial (or 30-day). I know I won’t even consider one with a trial.
Call for Quote
This is another of those antiquated, 20th century, ideas that also needs to die. I know older people still prefer to deal with a live person, but I’m a busy person the last thing I need is to have to endure a lengthy sales call, and repeated calls back to try to sign me up.
I’m a buyer. I hate pushy sales people (I also personally hate pushy sales people). I don’t want to be sold your product, I want to find out if your product works for me and my company.
I know this post is basically a call for more companies to adopt the Freemium model, and that’s not how I intended to start this, but it’s a model that I believe gets more small companies to use your product. So my suggestion to small businesses: If you’re searching for a software solution try SaaS and go for ones with a Freemium model.
Joe Robles 