You don’t have to hit the billionaire club to have a successful, highly profitable SaaS product. SaaS companies in the $7.5M to $15M range are the fastest growing subset. And with its higher prices and more willing customers, B2B SaaS is where you want to innovate.
In this post, learn what B2B markets need SaaS solutions, and how to market and sell your product.
Table of contents:
- What is B2B SaaS
- Top B2B SaaS companies
- Why B2B SaaS is a better opportunity than B2C SaaS
- B2B SaaS pricing
- B2B SaaS marketing
- B2B SaaS sales
What is B2B SaaS
B2B SaaS is software as a service that is sold to businesses, not consumers. To understand what SaaS is, just think of it this way: instead of a software that you buy on CD and install on your computer, it’s a software that you access in a web browser, mobile app, or desktop app from any device, anywhere.
The primary tenet of SaaS is that it’s accessible via the cloud. SaaS products are also expected to be easier to use and better designed than traditional, old school software products.
And remember: B2B means business to business. So B2B SaaS is a product that is sold to businesses.
A consumer SaaS product could be an app for storing and sharing photos with close family members. Meanwhile, a B2B SaaS example would be a software for storing and sharing photo, video, audio, and document files within a company.
Top B2B SaaS companies
In our list of top SaaS companies, we include plenty of B2B examples and also separate the companies into three categories:
- Market leaders
- Fast growing
- Micro SaaS
There are plenty of good B2B SaaS ideas that can lead to much smaller, though profitable, companies. Here’s an example within each category.
Market leader: Zoom
As a publicly traded company, Zoom is a great example of a B2B SaaS company that has skyrocketed into market leader status. The software is the world’s top solution for video conferencing.
Fast growing: HelloSign
While DocuSign is still the most-used solution for e-signatures, HelloSign is quickly growing and was acquired by Dropbox for $230M in January of 2019.
As for an example of a micro SaaS, UTM.io is an affordable SaaS product used by marketers who want to track their UTM codes in a more usable way, instead of relying on messy spreadsheets.
Why B2B SaaS is a better opportunity than B2C SaaS
When marketers, SaaS influencers, and entrepreneurs talk about SaaS, they’re nearly always referring to B2B SaaS. And that’s because it’s far easier to build a successful B2B SaaS product than one that is designed for consumers.
- Don’t necessarily use software in order to save time
- Aren’t always incentivized to use software (won’t experience monetary benefits like reduction in staff time or increased revenue)
- Have been trained to think that software and apps should be free, and are easily upset by paywalls of any kind
Meanwhile, businesses are always looking to save time, improve operations, and increase revenue. The best SaaS products help businesses do one or more of those key things, but the way that they do it varies greatly.
B2B SaaS markets with untapped potential
You won’t have to look far to find opportunities to create a successful B2B SaaS product. Now that software is getting “SaaSified” in every industry, markets that used to be too niche are now big enough to create a company that does 7, 8, or 9 figures in annual revenue. In other words, you can create an industry-specific product and still see success.
Here are several ideas to get your idea wheels churning.
The gig economy
24 million Americans are self employed, and with more members of Generation Z entering the workforce, the gig economy is expected to grow. Younger generations are less likely to put up with employers telling them when and where they need to work, and more likely to forge their own path.
Sure, there are already some scheduling, CRM, and accounting solutions aimed at freelancers and soloprofessionals. But there are plenty of unsolved problems too. Many freelancers are either using complicated software that’s too robust for their business needs, or they’re stuck in the pattern of manual processes. There’s a lot of opportunity for creating simple, easy-to-use SaaS products to help with lead qualification, lead follow up, client onboarding, and more.
Education (not LMS, SIS, or SMS)
Most colleges and K-12 schools already have a learning management system (LMS) and a student information system (SIS) or school management system (SMS) in place. The market likely doesn’t need another competitor in those categories.
However, those systems don’t help schools digitize every aspect of school management, classroom management, and parent communication. In fact, most SIS and SMS systems don’t include any sort of parent portal or app. They’re meant to be used by school administrators. To meet additional needs such as events management, facilities management, school lunch and cafeteria management, parent communication, student behavior tracking and more, school IT professionals often build custom apps using low-code platforms. Spend some time talking to teachers and you’ll learn where technology can help.
Attribution remains a huge unsolved problem in marketing. Try as they may, CMOs and other senior marketers can’t fully create a unified view of all of their marketing data.
They might track a conversion back to the most recent campaign, but they don’t know where that lead originally came from. One B2B SaaS opportunity is to build a platform that solves attribution problems and brings marketing data and customer journeys in one place.
While big businesses have robust resource and facilities management platforms, most SMBs are still relying on outdated process to keep track of who’s doing what and when. Sure, there are team scheduling and task management platforms on the market, but what about when equipment or facilities are involved? For example private music lessons, landscapers, house cleaners, in-home massages. Pick any home services or professional services niche, and you’ll find a ton of ideas for how to optimize their processes.
Do you already have a plan for a new business? Use this process to vet your SaaS idea before you build.
B2B SaaS pricing
The other thing that makes B2B SaaS different from consumer-focused products is what you can charge.
While consumers aren’t likely to pay more than the cost of a fancy latte for a monthly subscription to any app, businesses will pay based on the value they receive from the product.
For example, if you help a business save 100 administrative hours per month calculated at $25 per hour, you’re saving them $2500 per month. And their administrators are freed up to work on more important projects. That business might be willing to pay $750 or more per month for your product, because for them, it’s still a cost savings.
There are so many factors that go into pricing a B2B SaaS product. While the average SaaS company spends just 6 hours creating their pricing strategy, experts recommend that you revisit and update it regularly.
- Survey responses and other qualitative data on the amount businesses will pay for your product
- What your direct competitors are charging
- What your indirect competitors are charging for either more robust or less comprehensive software products
- Your target customers’ average revenue and business models
- How much money your SaaS product helps your customer make or save
- How much time your SaaS product saves your customer and/or their staff
Most SaaS products are offered at flat rate subscription tiers, but some also charge based on usage.
B2B SaaS marketing
Marketing a B2B SaaS product is also very different than marketing a consumer product. While some B2B SaaS companies can succeed with social media, most will have greater success using these proven B2B marketing methods:
- Direct mail: You might not think that B2B SaaS companies can succeed with direct mail, but many do. Brightwheel sends direct mail letters (not postcards) to daycare and preschool owners.
- SEO optimization: Getting organic search traffic is a favorite marketing strategy by nearly all B2B SaaS companies, who want to decrease their dependance on ads. Companies usually aim to SEO optimize their web pages and blog posts.
- Google search advertising: While most B2B SaaS companies fail with Facebook ads, they usually win with Google search ads, because you can target people who are searching for your exact solution or relevant search queries.
- LinkedIn advertising: In the B2B world, LinkedIn offers the best ways to target the customers you’re looking for.
- Gated content: Whether a company has an internal sales team or sells only from their website, gated content like webinars and downloadable guides are always a smart way to convert traffic into leads.
- Email marketing: Creating a high-value email newsletter can help B2B SaaS companies stay top of mind with potential customers.
The price point of your Saas product will greatly affect the marketing channels you use. For higher priced SaaS, you can afford an inside sales team to manage cold emailing and cold calling. For lower priced SaaS, you’ll likely want to invest in marketing that scales more rapidly, such as Google search ads and organic SEO.
B2B SaaS sales
Not every B2B SaaS company will have a sales team. For those whose product costs below $1500 a year, most companies do not have an inside sales team.
But for companies that have at least one subscription tier above that amount, they usually offer 1:1 demos with potential customers.
In addition to getting leads from their marketing team, sales reps fill their pipelines in several ways:
- Cold email: Unlike businesses that sell to consumers, B2B companies in the US can legally contact prospects via email.
- LinkedIn outbound: Sales professionals on LinkedIn can send direct messages and connection requests to target customers.
- LinkedIn inbound: When building up a network of ideal customers, strategic posting on LinkedIn can bring in new leads or help keep in touch with existing leads.
- Cold calling: While handled by the sales department, cold calling is still an important way to convert prospects to leads for many SaaS companies.
As a SaaS startup entrepreneur, you need to play the role of CEO, head of product, head of marketing, and head of sales. You’ll need to outsource some of the lead generation strategies mentioned above, simply because you won’t have time to handle it all.
However, most new SaaS entrepreneurs are unable to outsource demos in the early stages of their business.
If that’s you, and you know you won’t be able to afford a sales rep right away, you NEED to learn how to give demos like a top sales rep would. (Sorry for the all capital letters, but founders tend to botch demos.)
Check out these demo tips for founders:
Above all, you need to quickly understand the person’s pain point, and tailor the entire demo towards solving that core pain point. Don’t sell the software. Sell the solution.
- A B2B SaaS product is cloud-accessible software sold to businesses, not consumers
- There’s still lots of untapped potential in any and every industry
- B2B SaaS products can garner high prices, based on business value
- B2B SaaS products are marketed and sold differently than consumer ones
Are you creating your own B2B SaaS product? Take our free course