How to approach monetisation in Saas?

Monetisation in Saas applies to businesses of all stages. Stage 1 is newbies who are trying to get their first set of customers, then stage 2 where a stable revenue exists for a business of 5 to 10 years and then there are decade old mature businesses.  

The approach towards monetisation may be a bit different however underneath it the steps which exist are very similar in nature. 

Let's take an example of the luxury resort industry. First thing - for a new business in the luxury resort industry, we should start with a niche segment. This can be a good penetration strategy and eventually get very strong in that niche. Examples I can think of right now - food luxury resort, teenage luxury resort, girl’s hangout and similar … 💰 

Second - maybe try for freemium to premium, if it applies. I mean tiered offerings and not fully free. In a resort's case, tiers can be a restaurant, stay and then weekend package. 

Third - Assess the footfall, top of the funnel or traffic. Every business has its critical mass which it needs to survive and thrive. Example - we need to have a critical mass of 300k MAUs and above for an e-commerce site. If we are below 300k MAUs we should first get to 300k MAUs for a consumer business. A consumer business below 300k may not sustain as a business; at least 100k if you have a niche … 👏 

I  might be mixing consumer and IT products just to give a broader understanding of the problem statement. I am an IT guy; so a bit of bias there. Please stick with me. 

Post critical mass, there are strategies such as growth hacking, Surveys, discounts, partners and others which then help to get 10% or similar conversion. See if a paid account works for your business. Paid users should get multiple discounts, proprietary content, support and for this example partnerships with airlines, hotels, cabs and so on. 

Another thing which worked well for us was to focus on one state or one big city which is accessible and nail that geography from brand perspective. Because CAC, conversion, adoption and monetisation has to happen and trust me it is a very delicate balance … 🏆 

Everything I mentioned has to be experimented on a shorter cohort and should be iterated to see what works for this specific business. Every business and every niche is very unique. 

Additionally, we can try partner monetisation as well. Example - send leads to a hotel, airline, resort and get incentives from that hotel. One more, try b2b as well. 

The actual outcome will be a compounding impact of all your channels. If suitable, B2b sales models can also be tried through lead generation, outreach, field sales teams and more. 

Experiment, analyse, learn, grow and iterate. The faster the better … 👍

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Swagat Irsale is a Growth and Scale Advocate. He works with start ups and scale ups and helps them grow revenue and build enterprise products which users use.

Connect with him for work, partner opportunities. 

PS - Picture - Resorts which offer calm views; kind of interesting differentiator and demand premium price.

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