8 Ways a SaaS API Can Increase Revenue

Phil Alves


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A SaaS API can increase revenue by offering your customers additional functionality at a price they can’t refuse. In this post, we’re exploring API as a product and sharing examples of the types of SaaS APIs that can add revenue. 

Revenue-generating APIs go above and beyond to meet the needs of your highest paying customers, whether those are large enterprises who need your product to communicate with their full suite of software or agencies who rely on your product to satisfy their clients.

What is a SaaS API?

A SaaS API is a set of functions or procedures that allow a SaaS product’s data to be accessible by other devices or systems, typically by other SaaS products. There are SaaS APIs for a variety of uses including user management, results tracking, usage tracking and more. 

However, a SaaS API that adds revenue must also add measurable value to the customer. 

Viewing API as a product

Even when the end-user of your product is an internal employee, it’s wise to treat your API as a product so that your team devotes the maintenance hours required.

But what about viewing your API as a product that you can sell to customers? In order to successfully build, deliver, and profit from an API, you must treat it as a product. Here’s how:

  • Do customer research to know what APIs customers want and what sort of value that would provide the customer (saving them time, increasing their own revenue, etc.)

  • Determine what APIs would impact the most customers in the most valuable way

  • Assign the API project an individual owner who is in charge of managing the product to the fulfillment of end-users demands

  • Do usability testing to better understand how developers use your API so you can improve it over time

  • Test and maintain the quality of the API over time

When an API is treated this way, you can see that it becomes a secondary product built with an agile methodology. That’s very different from a one-time custom enterprise application integration service for a customer. Instead, the API becomes a scalable product.

7 different ways to increase revenue with a SaaS API 

Now that we see SaaS APIs as a product, it’s time to take a look at what types of products these APIs might be. What can you offer customers? What problems can you solve? Here are some different options that may or may not apply to your particular SaaS.

1. Help customers track data in their KPI dashboard

One of the most common SaaS APIs is simply getting the data out of a tool in order to track results. Your larger customers may want to integrate your SaaS product with their internal dashboard, one that is custom built or offered by another vendor (and not just a Zapier zap away). You can offer this at an additional fee, or roll it into your highest tier subscription. Customers who need it will have to upgrade, meaning you’re upselling the right customers.

2. Help customers save employee time

Another SaaS API might help customers to save on manual employee hours. Let’s say your product requires manual entry of its data into another tool that employees use. If you discover that lots of your customers are having the same issue (they love your tool, but when they export data, it’s time consuming for them to make use of it), then you can solve this problem with an API that will allow them to easily hook into their other critical systems.

3. Allow for whitelabeling

A SaaS API can make whitelabeling simple and profitable for everyone involved. For example, HR and payroll software PaySpace allows customers to whitelabel its software. Accountant and CPA firms can now sell the use of PaySpace to their clients, typically as an add-on to the monthly bookkeeping, accounting, and payroll service they provide. The benefit is that the accounting firm gets to offer a software that collects everything they need to provide the service, and they get to do it in away that increases their authority. It will look as if the company has built the product themselves.  

If your SaaS product is used by service providers, you should conduct customer research to determine if whitelabelling all or part of your product is something your customers would benefit from. 

4. Acquire more enterprise customers

Many APIs can be included in your enterprise or custom plans. Just as with the KPI tracking example, you can increase revenue by going upmarket and targeting larger and larger companies. If you offer common APIs like authentication and user management, operational data store, and usage metrics, you can successfully attract and retain more enterprise customers. 

SaaS apis that increase revenue

5. Process more transactions

Maybe you need an API to make your payment processor ubiquitous? PMC Coin is a payment gateway based on gold and cryptocurrency. We built their API to allow developers to use the payment gateway in their sites similar to Stripe. This means that PMC Coin can process more transactions across the web and, of course, increase revenue because of it. 

6. Inspire partners and affiliates

If affiliate or partner acquisition accounts for a large portion of your customers, you might want to consider an API that helps them track their revenue, or even a leaderboard for some friendly competition. 

Fundwise Capital is another API project that we have built and continue to maintain. Fundwise Capital offers startup funding and small business loans. A large part of their new applicants come from their business partners, often coaches and trainers. We built an API that allows their business partners to track the status of their referred applicants’ loan award amounts so they can review their income as a partner. 

7. Help customers share and communicate results

Similar to tracking results or data in an internal KPI dashboard, your customers might also want to be able to share and communicate data from your SaaS product. Maybe in the sales department, there’s digital signage showing that month’s sales. Or maybe customers need to pull results into a reporting tool they use to generate monthly reports for their clients. Helping your SaaS customers to share results with an API could be an add-on product or something made available in your higher subscription tiers. 

8. Reduce your churn rate

A SaaS API can help you reduce your churn rate. The reason is simple. Once a company has committed the resources to integrate with your API, they’re very unlikely to pull the plug on the integration.

Of course, the customer will still need to be receiving value from your product, and they won’t be locked in necessarily. They’ll just be far less likely to stop using your SaaS after people on their team have worked hard to integrate it with their internal systems. 

Hear what one founder has to say

"Offering Dynamic Endpoints and Webhooks to our customers in the sales industry, helped them achieve extended interconnection with many other products. This was huge improvement for our product, as we deeply engaged with our customers, allowing us to focus more on sales while keeping existing customers happy.

In the today world of technology, does not matter how many features you have, or how many problems you solve, what matters the most is how deeply can your product integrate and connect with other tools, as there is no escape from using multiple online tools, at some point a running/growing business would have at least 3-4 main Saas products which they use on their day to day routine." - Eriol Gjergii, founder of Flexie CRM

How to develop an API when your internal team is swamped

The rise of SaaS apps and SaaS APIs has created a modular approach to software. As long as all of the pieces can interconnect, customers can use them. As long as your SaaS connects to what customers care about, you bring your product to market quickly.

Customers aren’t locked into enterprise applications and developers aren’t locked into certain frameworks (or at least, not we’re not all as locked down as we might have been twenty years ago). 

But all of these benefits rely on something pretty key: you have to actually build the API that your customers will pay extra for, or that will entice them into your higher tier plans. 

Ways to increase revenue with a SaaS API

However, SaaS founders and product teams get busy handling their core product. Your backlog is probably already too large for your existing team. You most likely need to hire anywhere from two to twenty developers for your core product, let alone your API. 

build SaaS api with external team

That’s why it can make a lot of sense to work with an outside team on your API. Here’s how to do this successfully:

  • Choose a managed team - When outsourcing your SaaS API, you should work with a development firm that handles product management, QA, DevOps, documentation, maintenance—everything. The reason for this is partly because your internal team is too busy as it is, but mostly because a successful SaaS API requires product ownership and leadership. Treating your API as a product will run smoother when you allow someone else to take on the role of owner and manager.

  • Work with a team that has built APIs - Building a SaaS API isn’t necessarily more complicated in terms of the development work, but there are always hiccups. There’s no substitute for experience. You’ll want a team that knows how to not only build the API but also usable documentation. 

  • Understand the value of the API before engaging - Even though you’re going to vet for a team that is managed and experienced, you should still be able to guide your external team on the value of the API. You should fully understand the need for the API, the value it provides for customers, and the best way to charge for it. That way your API development partner can collaborate with you and improve upon your idea. 

  • Collect feedback and adapt - Key to treating your API as a product worth paying for is getting feedback on it. You wouldn’t sell a product that you hadn’t gotten feedback on, so why do this for an API?

Building a high-value API can result in increased value in a variety of ways. You can increase your amount of affiliate sales or whitelabelled sales, acquire more higher paying customers, or sell the API as an add-on product.

Do you have an idea for a high-value API that will generate revenue? We offer fully managed API development.

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