With the median annual churn rate for businesses making under $10 million in ARR at 20%, you might be wondering how to add additional revenue. Reducing churn isn’t the only answer. Sometimes, SaaS businesses simply need to make more money. In this post, we’re showcasing 7 different SaaS revenue streams.
Base software subscription
Subscription add-ons
Paid courses or infoproducts
Custom integration or development work
Productized 1:1 services
Premium support
Premium onboarding
Now, let’s be clear. We’re not going over SaaS pricing models, such as whether or not you should charge per transaction or per usage volume. This post is all about the unique revenue streams that you can combine to increase ARR. If you want insights on your pricing model, though you can find that here.
You might be wondering...
Can I really add new revenue streams?
You should offer additional product services that solve customers’ needs—but only the needs that relate to the core value your software provides.
Otherwise, you run the risk of overwhelming your team and confusing your customers. Do this right and they’ll appreciate you even more.
With that said, let’s get into the different SaaS revenue streams!
1. Base software subscription
Let’s start with the one you know and love. Most SaaS companies will have the majority of revenue made up by what users pay for the base software subscription. There are usually different monthly pricing tiers made up of different levels of access.
The different subscriptions can include certain user counts, usage amounts, storage, etc.
Example: MemberVault
Because their pricing is so simple MemberVault, a course creation software, is a perfect example of subscription packages. Utilizing a freemium SaaS growth strategy, they have a free forever version. Then they have a Base plan and a Pro plan.
While your monthly or annual software subscription is the most common source of SaaS revenue, it’s not the only one!
Let’s take a look at some of the less common ways to increase revenue as a SaaS business.
See quote source.
2. Subscription add-ons
You can also include one-off or monthly add-ons to your base subscription. This is a really smart strategy for a few reasons:
Allows you to increase revenue
Doesn’t overwhelm other users with too many features
Doesn’t cause price increases for all users
Example: Zoom
An example of this additional revenue stream is Zoom, the popular video conferencing software. They have an Audio plan which lets you call out to conference participants, instead of just having them dial in.
There’s also a fee for additional cloud storage. If you need to save your recordings for longer than the standard, you can simply pay extra each month for a lot more storage.
3. Paid courses and other infoproducts
Paid courses, challenges, and certifications are an uncommon SaaS revenue stream, because most SaaS companies want to give away these resources for free as part of their content marketing efforts to attract paying customers for their software.
However, it is possible to create infoproducts worth paying for. If you have a very high quality certification, or if you can create courses that can help business owners make more money, then it is worth doing some market research to see if your customers and target customers would be willing to pay.
Example: ClickFunnels
ClickFunnels is a prime example of a SaaS business that makes money through the sale of ebooks, physical books, digital courses, challenges, etc.
Sure, the ClickFunnels style of selling isn’t for everyone...in fact it’s not for most B2B SaaS companies. But the fact remains that they found a way of selling additional products to their ideal customers using their own software. Maybe your team can innovate an additional revenue stream that can work for your target audience?
ClickFunnels (however much you like or dislike them) proves that it’s possible.
4. Custom integration or development work
This revenue stream is a common one with SaaS businesses that serve enterprise customers. These customers might need additional development work. They might have unique requirements because of their security network, the software they’re already using, or industry regulations.
There can also be custom integration work that needs to be done in order to integrate your software with their existing apps.
Example: Xapiapps
Xapiapps, a system for tracking and managing on-the-job-training needs to integrate with lots of different LMSs, but it can’t possibly have a direct integration with every single one on the market. That’s why they offer custom integration for enterprise clients that need it. They can also make tweaks to the software to meet the needs of highly regulated industries.
5. Productized 1:1 services
We predict to see this one grow even more in the coming years! Have you ever thought about productizing a service alongside your SaaS? Maybe you can include not only the software that customers need to get results, but the talent as well.
These productized services would be an optional add-on for customers, or could potentially be purchased by people who aren’t using your software. That’s up to you.
Example: SocialBee
Social media scheduling app SocialBee is a great example of a productized service that relates to their SaaS offer. The scheduling app includes many of the standard social media marketing features, but also has unique features like content categories and workspaces.
In addition to their software, SocialBee offers social media content creation, content curation, social media community management, and blog content writing all handled by their inhouse team in Romania. For small businesses looking for help with content marketing, they have a one-stop shop: software and service.
This option isn’t for every SaaS company, but it can be a smart way to increase revenue for many.
6. Premium support
With many software subscriptions, better support is available with higher tiers. This might be support that is available more regularly, or the support channels might change (for example, the addition of phone on top of chat).
However, you can also charge more for better support, regardless of how your subscription tiers are organized. Maybe support is the deciding factor for what makes a subscription cost more. Or maybe better support is an add-on available for any subscription.
How you organize this is up to you. One thing is for sure: in certain industries or for certain types of software, companies are willing to pay for top-notch support. Just make sure they see why it is special and worth paying more for. You don’t want customers to feel like they are paying for something that should be included.
Example: TravelPerk
An example of this is the business travel management platform TravelPerk. While there are other features that separate the Free and the Premium plan, one of the most defining differences is the level of support. On the Premium plan, customers get faster access to the senior level support team, and on the Enterprise plan, they have dedicated support.
Also, on both paid plans, there is concierge style support, meaning that a travel agent will book group trips or anything you need for you.
Customers are willing to pay more for travel support, because they want travelers to have what they need at any time. They also want their administrative team to not get wrapped up in providing travel support when they have so much else to do.
If your product is in a space that people will willingly pay for top-level support, you should structure your pricing to reflect that, or include it as a separate add-on.
7. Premium onboarding
Aside from top-notch support, you can also charge additional fees for premium onboarding. This onboarding might include strategy to help your customer get the best results. It might include training so that staff knows how to utilize the software to the fullest extent. It might include some migration work from a different system over to yours.
For enterprise customers and even some SMBs, there are many ways to charge for the work that you need to do in order to assure that your customers get the value that they expect from your software.
Example: Hubspot
Hubspot makes their onboarding services a requirement for customers in their Marketing Hub Professional or Enterprise plans. That’s because they believe that proper training and implementation is essential for inbound success. And hey, they’re Hubspot. They know what they’re doing, and customers trust that.
Making it a requirement might not be the right direction for you, but you can definitely make it optional. Depending on what you want to offer, you can have preset onboarding packages or create a custom pitch for each customer.
There are many different SaaS revenue streams. Your monthly or annual subscription isn’t the only way to increase ARR.
It may take some time to strategize the right offers with your team, but it will be well worth it. Just make sure that you’re guiding customers towards even more stickiness with your product.