The business information and SaaS industries have a lot they can learn from each other. We take a look at how publishers of high-value subscription content can adopt SaaS ways of doing business.
It is no secret that cloud computing services have transformed the world of software and given rise to the booming Software-as-a-Service (SaaS) industry. What might comes as a surprise, however, is the sheer size of this burgeoning sector: Gartner forecasts that software-as-a-service solutions will generate revenue close to $141 billion in 2022 – a 25% increase on the 2020 figure1.
SaaS negates the need for physical distribution of the software and customers typically pay a subscription fee – often monthly – to access a continually updated application.
A similar revolution has taken place in the business information and market analysis sector. Technology has changed the way information is consumed beyond recognition in a relatively short space of time; a hard copy printed document or PDF now seems antiquated compared with today’s digital experiences.
Subscription propositions to high-value content and data are now completely entwined with technology.
This got us thinking. If publishers can harness technology to better serve their customers, can some of the management techniques prevalent in SaaS businesses similarly be adopted to drive better business outcomes?
We see convergences in the way that SaaS and high-value content businesses are managed and have identified five SaaS management techniques that publishers should use.
The iterative nature of software means components can be added in chunks and the software seamlessly updated. At each iteration, design modifications are made, and new functional capabilities are added.
With this process in mind, it is best to think of published, paid-for content as a portfolio of components that may require regular updating so the end-user can view the content in its entirety, rather than adopting the concept that content is made up of discreet reports.
When viewed from a subscription perspective and as an opportunity to upgrade the customer, service becomes a golden opportunity to engage with customers and increase profitability.
“Flexible subscription models pave the way for stronger customer relationships and are the most reliable way to continue adding value. If customers continually see the value a company provides for them, they will continue to pay for it,” explains Mitali Mookerjee, Managing Director of Publish Interactive.
Adaptable pricing and packaging strategy
The SaaS delivery model affords businesses more control over how they package, deploy and manage their offerings while also giving customers more flexible pricing models.
Flexibility in packaging is the secret to subscription pricing. Any credible SaaS business is product and customer-centric, offering a broad range of options to meet customers’ bespoke needs.
Market analysis publishers can similarly offer highly personalised subscriptions based on their subscribers’ exact requirements, providing them with the content of most value for their business, whilst identifying upgrade paths for future upselling opportunities.
“Flexible subscription models pave the way for stronger customer relationships and are the most reliable way to continue adding value. If customers continually see the value a company provides for them, they will continue to pay for it”
Managing Director at Publish Interactive
Think monthly, not annually
Publishers have seen a boom in digital subscription revenues during the pandemic, as users spent more time online and sought out new, easily accessible content sources. The convenience of digital subscriptions is now evident and consumers of business information have discovered their appeal over the past 18 months.
This is why publishing businesses are starting to consider using Monthly Recurring Revenue (MRR) as a measure. As perhaps the most important financial metric of any SaaS subscription model, MRR helps make accurate financial forecasts based on user subscriptions.
It is a KPI that gives accurate information on whether a publishing business is developing and gaining momentum or plateauing.
A publishing company that thinks like a SaaS provider places more focus on the value of a customer relationship over time as the business model is one of recurring revenue with the opportunity for increased yield (spend/customer). The difference is the switch in focus to recurring revenue rather than an annual target – through offering a recurring service on either a monthly or quarterly basis rather than annually.
When implemented correctly, SaaS is a business model that provides customers with an intuitive, tailored experience and arms the publisher with a business model that encourages upgrades, concise revenue forecasting and a customer-centric mindset.
Five SaaS management techniques for publishers
|1. Use MRR to measure success|
Monthly recurring revenues (MRR) is a SaaS businesses’ mantra as the accumulation of existing and current business will drive an upward MRR trajectory.
Contrast the MRR approach to the annual subs number that most publishers use. The key difference is to remember that your customers are engaging with you all the time and not to be forgotten until the next annual renewal.
Top tip: Think about how your customers interact with your service on a monthly basis
|2. Your research is a service|
Once upon a time the tech industry used to sell a CD / download with an annual user licence (remember all those MS Office disks?) and sales were expressed as units. The move to selling software-as-a-service on a monthly / annual term with continuous updates and (no more versions!) has created different business models. The same approach can be taken with market analysis and research. Rather than selling individual reports and then bundling into a subscription, why not think about a continuous service with regular updates to constantly engage your customer.
Top tip: Think about what your customer wants from content on a daily basis
|3. Bake in dependency|
The best SaaS products become so embedded within the user’s business and workflow that customers cannot contemplate leaving. This makes renewals procedural and revenue forecasting straightforward. Can a content business achieve the same? Design your product to be essential and need-to-have, rather than nice-to-have.
Top tip: Ensure customers never have a reason to leave
|4. Use Roadmaps|
All software companies have a roadmap outlining their proposed improvements and new features. Typical roadmaps, which are often public, evolve on a quarterly and annual cycle as customer feedback drives product development. New features (and enhancements) are rolled out regularly which in turn gives the customer a feeling of great value as they are getting more for their money.
Top tip: Give your customers an idea of how the product will evolve
|5. Develop an upgrade path |
Most SaaS products have a clear upgrade path for customers, where users will pay for advanced features or increased storage limits for things like data or projects. Over time it is hoped the adoption of more features or higher limits will increase recurring revenue and users have a compelling reason to buy.
Top tip: Give customers a compelling reason to increase their spend