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, including large and small companies.
Here are some example B2B SaaS companies across a few different categories:
- Market leaders
- Fast-growing B2B SaaS companies
- Micro-SaaS companies
- All-in-one niche platforms
Market-leading companies capture the most amount of market share and are often well known brands among professionals.
Here are some example market-leading B2B SaaS companies:
Salesforce. The largest B2B SaaS company in the US, Salesforce has predicted to its investors that it will bring in $25 billion in revenue in 2022, an astronomical number which proves how well the company pivoted to capture additional market share during the worst of COVID-19 pandemic.
Zoom. As a publicly traded company, Zoom is another 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 B2B SaaS companies
Fast-growing companies seem to come out of nowhere and capture tons of market share, despite there already being well-established competitors available. Here are some of the fastest growing B2B SaaS companies in 2021.
ClickUp. Certainly, Asana and Trello didn’t see ClickUp coming. The company has grown through word-of-mouth because of it’s attractive UX and more powerful automation and project management features. The company has experienced a whopping 900% revenue growth in the past year.
Virtually. Virtually is a platform for online learning trusted by accredited online schools. The rise of online learning in 2020 and 2021 surely contributed to its growth.
Micro SaaS companies
Micro-SaaS companies solve small problems. Here are some B2B examples of micro-SaaS:
UTM.io. 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.
Storemapper. With Storemapper, Shopify-powered merchants can include a map on their website that helps shoppers locate physical store locations.
Justredirect. Tired of manually setting up redirects? With Justredirect, non-technical marketers can handle this themselves without having to ask a developer for help.
All-in-one platforms for niche business verticals
A vertical SaaS is one that satisfies the needs of one particular type of business. This niche platforms typically offer “all-in-one” so that small business owners don’t have to piece together lots of different SaaS products.
DesignFiles. A platform for interior designers, DesignFiles provides design tools like mood boards and 3D renderings alongside client collaboration and invoicing.
HoneyBook. A popular platform among photographers, HoneyBook lets creative entrepreneurs sell packages, get contracts signed, and manage their schedules.
Propertybase. Propertybase is an all-in-one platform that real estate agents use for their CRM, back office operations, website management, and lead capture and nurturing.
B2B SaaS market size and growth
The SaaS market is projected to reach USD 307 billion by 2026.
There are three major trends influencing the growth of SaaS:
- The rise of artificial intelligence allows businesses to accomplish complex tasks with greater speed, driving up the demand for software platforms powered by AI.
- A global increase in the use of devices such as smartphones, tablets, and laptops mean that more companies need cloud-based solutions that their staff can access anywhere. More and more companies are replacing on-premise technology.
- More traditional and front-line businesses such as healthcare, hospitality, and grocery are converting to SaaS solutions. The growth in the human capital management market (HCM) is contributing to overall SaaS market growth. For example, more traditional companies are providing employee apps.
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.
Unsexy development and technical problems
Some of the most successful SaaS companies recently are solving unsexy problems. For example, Flatfile provides a CSV importer so that software engineering companies don’t have to build one from scratch. Meanwhile, Terzo offers a vendor management solution so that enterprises can get more value out of the SaaS products they buy.
Maybe the B2B SaaS company that you want to build isn’t cool or sexy, but has the possiblity for extreme profits.
The gig economy
28% of Americans are self employed in some capacity, 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
Because B2B SaaS is very different from consumer tech, B2B SaaS sales are unique as well.
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