Optimising Revenue Operation For SaaS Efficiency

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to Increase Growth, Profit, and Scalability
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Software-as-a-service (SaaS) is a cloud-based software that runs over a web browser. Here, this software is retrieved from the cloud to cater to the demand of any specific business application. The businesses pay charges for the usage of this software annually/monthly. 

SaaS is an emerging trend. Many companies are inclining towards this cloud-based model and switching from the traditional on-premise software. Companies are outsourcing their IT responsibilities to the SaaS provider to carry out their business IT requirements. 

On the other hand, in delivering this software service, the service provider also needs to check its revenue operation for its business growth, profitability, and scalability. However, to achieve the desired results, the organizations are indulged in the effective interaction between their different functions and how the relevant resources and data are exchanged that affect the customer lifecycle. 

Likewise, this interaction of systems and software, processes, and teams form an infrastructure termed Saas revenue infrastructure. The alignment of these entities that assembles a revenue infrastructure has a significant impact on the revenue operation.     

Furthermore, in the process of revenue operation, the following terms need to be taken into consideration:

Payment Processing

Payment processing means the revenue that is generated by providing SaaS service to the end-user. It is the process of collecting the payment from the clients after they access the software. In response to this situation, the SaaS providers must make the payment process seamless for smooth collection of the expected payment from the end-users and provide the easiest way to make the payment by the users.  

In many ways, some of the factors that affect the payment process are

  • Customer Experience:
    For any business, their bread and butter are dependent on their customer satisfaction and experience. For example, a SaaS user might be satisfied with the quality of software but taken away by the payment process. It means the experience a customer attains while making the payment for the service should be uninterrupted and flawless. So, the customer can easily make the recurring payment within the stipulated time, and after that, the service provider can collect the same. Also, different modes of payment options-credit cards, bank transfers, Paytm, debit cards, etc. should be made available for payment. 
  • Transaction Management:
    Keeping an eye on every transaction is very imperative. But, keeping an account of every transaction in manual ways is beyond one’s reach. It means the process of keeping track of any failed transaction should be digitalised or automated. By doing so, identifying any failed transaction becomes easier and can be rectified after that. 
  • Secure Payment Method:
    When making any online payment, a prospective customer is very wary and dubious about it. It is because of the assurance that their payment mode details are safe, encrypted, and not misused. This sort of apprehension has an impact on making payments for SaaS services. As a result, providing a secure online payment process encourages the payment process to be more reliable.

Billing Automation

In simple words, the whole process of generating bills for the SaaS providers for their end-users is automated. A robust invoicing system is running with the help of a scalable API layer. This system creates calendar billing, proration, advance invoicing, and bills with the help of auto-pilot mode.

When we talk about it from the revenue operation perspective, automated billing plays a key role7. If a SaaS provider manually generates bills, there are loopholes like human error and slow generating the invoices. Also, going digitalization for billing is essential to survive in this competitive market and maintain healthy cash flow. As a result, this will affect the overall process of SaaS revenue operation. 

Further, the aspects that can be more competent through billing automation are:

  • Periodic Billing:
    When there are fewer subscribers for the software service, making bills for them is feasible. But, as the number increases, the pressure increases on the team to track payments and manage invoices. Then at this time, automated billing mitigates that pressure by auto-post invoices and auto-collect payments. A robust invoicing system maintains recurring charges, usage-based charges, one-time charges and generates customised invoices per the subscriptions. 
  • Payment Management:
    The interesting part of this management is how with the help of billing automation, the failure of credit card payment is identified and sorted and how automatically an email is sent to the user to get access to their customised portal to look at their payment information. Here, via billing automation, a customer can be notified about card expiry, outstanding & lapsed payments also. 
  • Single Source of Truth (SSOS):
    Billing automation is just not confined to making recurring invoices or notifying customers. It also enables the maintenance of critical information of the users based upon the self-customer portal, automated payments, and manual inputs of data. 
  • Identification revenue:
    In a true sense, billing automation acts like a magic spell when maintaining the book of records. With the help of General Ledger (GL) provides a recurring billing platform that enables to segregate of each financial transaction into debit and credit. In addition, a double-entry bookkeeping principle that GL follows allows a business to identify clear and accurate figures of their revenue.  

Subscription Management

Subscription management comes into action right from exactly where a customer subscribes to the software service. This also covers the timeline till the point of subscription cancellation. This management revolves all around the customer life cycle. 

Firstly, highlighting subscription management from the SaaS service provider’s perspective consists of handling multiple tasks for the SaaS business. Here is those task:

  • Configure/custom pricing plans
  • Generate coupons
  • Manage renewal, cancellation, and refunds 
  • Monitor redeemed discounts
  • Access to key performance metrics- revenue, subscription retention, churn     rates, and conversion rate
  • Modify the ongoing subscription-upgrade or degrade  
  • Issuing refunds
  • Managing Signups and free trials

Well, these tasks are carried out by SaaS subscription management. Now, let’s move on to subscription management from the user’s point of view. There are many advantages a customer can take benefit of while subscribing to SaaS service.  

In the first place, there is a self-service portal, where a user can log in and take all the details about one’s subscription plan, pricing, mode of payment, and payment period-annually, monthly, weekly. With the liberty to view what is in the store, customers can decide which plan or pricing or payment period & mode will best suit them.  

On the other hand, with a self-service portal, a service provider is also benefited- no licensing fees to deliver software for the SaaS model that reduces software cost. 

Revenue Operation

In previous days, the way businesses were conducted was different from the way it happens now. Earlier, the marketing team would bring in the prospect customer, the sales team would deliver the orders, and the finance team handled the payments. 

But, now, this pattern has changed completely. Many organisations are unifying all the teams under one ground-predictable and shared revenue of the organisation. Driving all the functions to integrate towards one focus is termed revenue operation (RevOps). Such emerging changes are due to transparency, accountability, and predictability in high demand among different functions. 

In response to this situation, since these functions lead to revenue generation, revenue operation intends to operate an end-to-end business process. In addition, RevOps comprises many tasks such as driving revenue predictability, improving revenue process, achieving revenue growth, and creating visibility among these revenue generation teams.

Through these layers of SaaS Revenue Operation Infrastructure, a SaaS service provider can optimise its revenue operations. 

4 Things to Increase Growth, Profit, and Scalability

Till now, we have come across the different segments through which we can optimise revenue operation. This section will discuss how a SaaS service provider can increase its organisational growth, profit, and scalability. 

1.   Reduce Customer Friction

Can you tell me who is responsible for carrying out business in an organisation? It is the workforce or employees working in a company. It means their approach towards their task and how the activities are carried out as per resources available at their department plays a vital role in achieving the desired targets.

Many factors are there that drive the workforce to execute as per the strategic plan. Those driving factors include data sharing-inter connected data with other functions, uniform priorities across all the departments. This factor enables the workforce to work in an integrated manner. As a result, this integration leads to a single customer view and eradicates customer friction. 

Also, the goal of revenue operation, which is to build a thriving work environment, unifies the endeavour put up by all the departments in the customer lifecycle.

2.   Align Goals across Departments

Every individual in an organisation is working towards the attainment of a target or a goal. But, they are unaware of how that effort is helping in generating revenue for the organisation. 

Here, RevOps brings out complete transparency and mitigates the barriers for teams. Along with this revenue, the operation sets the shared goals for all the departments that eventually result in inter-connection, sharing more data and increasing efficiency. 

3.   Streamline Data Operation

The demand for transparency and accountability evolved the revenue operation system in an organisation. With this introduction of RevOps, the process of handling any customer-related query has become seamless. It is because revenue operation takes charge of managing that query itself or delegating it to the concerned department.

There is transparency among the functions, and the concerned department knows that it is accountable to solve the customer query. 

4.   Align Business Metrics

In simple terms, revenue operations align the customer satisfaction metrics-churn rate, customer lifetime value, satisfaction, acquisition cost with the revenue metrics- annual recurring revenue, net new revenue, gross profit, and cash collection. 

 Here, RevOps creates a common platform or the central hub of information that one can share for making strategic decisions. As a result, this major hub of information unification between customer satisfaction metrics and financial metrics is made viable. 

Speeding up Processes

This section will be reading about speeding up processes such as CRM and RevOps to optimise the revenue operation for SaaS software providers.

Customer Relationship Management (CRM)

The management that deals with bits and pieces of information and activities related to a prospective customer or ongoing client is termed CRM. The CRM system itself performs multiple tasks. These tasks are as follows:

· Tracking leads and manages customer information

  • Drive sales
  • Manage sales pipelines
  • Captures customer emails
  • Interconnects workforce or team
  • Eliminates repetitive tasks
  • Scalability- expands and customise 
  • Access to the updated customer data
  • Availability of instant insights

In many ways, in building a strong customer relationship, the CRM system provides excellent support to the overall functioning of the SaaS service provider. The feature of CRM that brings all the team members to access the customer data from one system or platform enables them to have relevant, updated, and accurate customer information. As a result, when the time comes to target a client or solve any error faced by the customer, one can easily sort with the help of updated and complete customer information. And enable SaaS service providers to increase their conversion rate and keep growing their business. 

Revenue Operations (RevOps)

These days the market is very agile and competitive. It means, if there are ample prospect customers for your business, then so do your competitors to give cut-throat competition to you.

As a result, organizations are making changes now and then, satisfying their customers and targeting new ones.

One such example of the new change is revenue operation (RevOps). This operation of SaaS service providers is focusing on unifying its workforce by sharing the information within its functions. And drive teams to work together on one single page, which will eventually generate revenue. 

Conclusion:

Different entities of SaaS revenue infrastructure-people, data, processes are needed to work in a unified manner to attain the predictable revenue for the organization. And the operation that leads these entities to collaborate on one single platform is done by Revenue operation (RevOps). Hence, to optimize Saas Revenue operation, a SaaS service provider should bring the techniques mentioned above into practice. 

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Ayush Singh writes on tech, marketing, and SAAS, which, considering where you’re reading this, makes perfect sense.

Having worked in SAAS marketing for enterprises and startups for more than 9 years, Ayush enjoys exchanging ideas and lessons learned with other practitioners.

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