A SaaS application is a concept that involves providing software as a service to customers all over the world through a single point of contact. Most SaaS companies employ a subscription-based model to rent their services to their customers for a predetermined period. ASP (Application Service Providers) originated from centralized computing in the 1990s, and SaaS is an extension of the ASP paradigm. Since the beginning of centralized computing, the footprints of SaaS have been visible in some way or another. There are tens of thousands of SaaS businesses to choose from. By 2023, the global market for SaaS is estimated to be worth USD 623 billion.

Challenges faced by SaaS Companies

Source: Frontegg

Subscriptions are a major source of revenue in the SaaS market. The total SaaS model is dynamic, and businesses must keep a close eye on it to maintain a steady stream of revenue and proper quality analysis of the services provided to clients.

Brand Awareness

One of the most significant challenges that SaaS companies face is raising brand recognition among their target audience. Instead of marketing their service as a separate product, SaaS companies can intentionally advertise it as a solution.

Customer Activation

Most SaaS companies provide new users with a trial period during which they can obtain a better understanding of the product. As a result, the trial period is a key aspect in persuading clients to sign up for a subscription. It will be tough to acquire their trust and have them activate subscription plans unless the organization has a solid financial management system.

Database Management

When it came to database management, bookkeeping and spreadsheets were formerly the most popular options. When it comes to customer relations, the maintenance of databases is the most pressing issue for SaaS organizations. The organization may have to deal with the consequences of poor decision-making unless there is a working database to track leads, prospects, and customers individually.

Customer Service

Because SaaS enterprises are stored on a cloud server, examining the software’s security, identifying problems, and providing solutions is a recurring process. In the worst-case scenario, clients are unable to email the service provider due to a lack of contact information. To overcome this, SaaS organizations could use ticketing software to build a customer database and quickly handle tickets.

Customer Churn

An increase in client churn is a concerning trend. Though a small proportion of client turnover is acceptable, it is usually a bad sign. This is especially true of SaaS businesses, where clients pay as they go and can cancel at any time. Because of this unpredictability, SaaS companies must continuously analyze account activity, uncover customer issues, and enhance the program as a whole

Stable Revenue

For monthly and yearly sales predictions, measuring Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) is critical. Simple errors can include the number of customers in a plan, their membership type, or the amount charged for a customized plan. SaaS organizations are unable to estimate their plans because there is no automated solution to handle these metrics.

Key benefits of a SaaS Business Model 

When it comes to the SaaS model, there are numerous advantages as follows. 

  • It assists startups in providing better customer experiences to a wide range of clients. Adopting a SaaS model expands the business’s possibilities, especially when it runs on the public cloud. 
  • It supports local data residency, sovereignty, and compliance requirements, removing geographical boundaries. 
  • Another advantage is the ability to save current clients money by hosting software through Microsoft. 
  • Overall, the SaaS model will help the company increase sales by making it easier for clients to obtain samples and learn more about the value of its products.

Top 5 Solutions for your SaaS Business Models 

In this part, entrepreneurs will find a collection of common programs that will assist them in running their business effectively.

CRM Solution

For lead generation, the SaaS business model template mainly relies on their website (SEO), email marketing, and social networking. An effective and real-time database of website visitors, leads, deals, customers, and contacts is required for efficacy. Businesses can use this to track the sales pipeline and analyze the conversion rate of their leads. 

SaaS firms may manage their customers, leads, contacts, and opportunity information from an exclusive cloud portal that is connected yet independent from one another by signing up for a CRM Solution. Collaboration elements such as emails, phone logs, task management, notes, and a news feed that tracks all interactions in real-time are some of the most typical features of a CRM. Furthermore, all data and any changes reported in real-time are documented.

Contracts Management

Because SaaS operations are cloud-based, relevant parties have fewer opportunities to meet in person. Contracts serve as a link between the service provider and the customer, allowing the service purchase to be authenticated. They guarantee that the contracts are legal.

Sales and retainer contracts are offered by contract management solutions, which SaaS teams may use to establish sales contracts for purchases and retainer contracts for services. Managers can make employees’ jobs easier by using the approval flow feature. Based on the parameters provided, the contracts will be submitted to the appropriate management or customer for approval. The staff may simply press the submit button, and the software will take care of the rest. Managers can also determine what to do after a contract is submitted, accepted, or denied.

Employees can also keep track of contract renewal dates, plan invoices, and send quick reminders to consumers before contract renewal deadlines. Employees may document requests, make appropriate modifications, and follow transaction history at any moment if they have a complaint.

SaaS companies may get contracts signed through email or in-person by enabling the e-Signature service built on Blockchain technology. Sequentially the contracts are signed, and all parties will be notified immediately if there are any changes to the online signing process.

Help Desk Service

SaaS organizations, without a doubt, have well-trained customer care teams. However, an automated tool is required to improve the performances of service agents. Customers can submit tickets or inquiries from numerous platforms using an Online Help Desk, and all tickets are documented immediately in a single application.

Managers can use working hours, ticket type, and priority level to assign tickets to the appropriate service agent. Service Level Agreement (SLA) functionality of help desks aids in ticket prioritizing, response time, ticket escalation, and action to be taken if tickets are left unattended.

Customers can also use the self-service portal to connect directly with the appropriate service agent, log new issues, track their status, and learn more about the service they have signed up for. 

Furthermore, team leaders may assess their agents’ performance by using KPIs such as average handling time, customer satisfaction score, customer effort score, tickets per customer, initial response time, volume by channel, first contact resolution, and other vital measures.

Project Management

The SaaS sector is growing, and there is always room for improvement. The product development team may consider introducing new services as add-ons or launching an entirely new brand once the firm has reached a mature level. Customers may have specific criteria in various cases. All of these are grouped as projects.

Available apps allow complete project segmentation and monitoring in the form of milestones, tasks, and sub-tasks. The Gantt charts provide all of the necessary capabilities for tracking the progress of individual projects along with the entire system’s projects.

Project managers can use the automation options to set up the system to send emails, update fields, or create activities based on specific criteria. Project members can receive quick email notifications whenever any activity occurs in the projects at the same time. The project management platform allows consumers to track project progress and communicate with teams in real-time, bringing all stakeholders together.

The Timesheets app allows users to track employees’ working hours based on projects, and users can send timesheets to clients or supervisors for approval via the approval pipeline. In addition, authorized timesheets can be turned into invoices for payment collection.

Online Billing System

Invoicing and collecting payments for service subscriptions is not as simple as it appears, especially for an employee. It is a process of discussing a customer’s service requirements, preparing quotations, and getting the quotes systematically accepted by the customer. If the customer accepts, a purchase order is generated for the customer front, followed by an invoice.

Online billing systems offer specific features to manage all of these areas of the Billing System, allowing finance departments to track online bills. Aside from this essential requirement, there are other apps such as customer payments, supplier invoices, sales receipts, expenditure reports, license tracker, and many others that will untangle the intricacies of your finance team. All of the apps’ collaboration tools can help you improve internal communication by delivering timely notifications about future events, follow-ups, and appointments.

The financial team can use the invoice app to generate invoices based on pre-defined templates, establish recurring invoices, collect net payments, track the outstanding amount, and create invoices based on pre-defined templates. Consumers can also pay with platforms like Authorize.Net, StripePayPal, Bank Accounts, or Zipmark when shopping online. These integrations are usually offered by top online billing solutions on a subscription basis. 


A successful SaaS business necessitates a lot of effort from a variety of stakeholders. Everything takes effort, from financing to research and development to extending the customer base, because the SaaS sector is extremely competitive. SaaS organizations may organize business tasks and provide an exceptional client experience by combining operations with business management solutions.

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