Jelena Franco, May 25 2021

What Did SaaS Companies Ever do for Manufacturers?

Twenty years ago, Salesforce invented the phrase “Software-as-a-Service” or ‘SaaS”. Since then, the growth of this concept has been phenomenal. A few years ago, I was collating Latvian SaaS companies into a single database to facilitate investors. Now, categorizing SaaS enterprises is not a straightforward activity as they fall into so many different verticals. Merely labeling them “IT” is not helpful. Do we judge them by their technology or the end customer that they serve? In the end, we settle on Medtech, Spacetech, Insuretech, a ton of Fintechs, and many others. SaaS is expanding rapidly and is becoming a dominant business model. It is changing the way we think about products and services. But what if you are not a software business, can you learn anything from this dynamic new way of doing business? The answer is, “Of course!”

At Kingsford, we work with a lot of manufacturing businesses that would love to replicate the rapid market penetration, growth, and success of SaaS. So, here are four fundamental qualities that fuel the success of SaaS. Adopt any of these to bring new energy into your business:

1. Prioritize customer success
Manufacturers produce things, ship them, and then the customer ‘consumes’ the already completed product. While customer service is important to many manufacturers, they could in theory, just leave the customer to it after the sale is made. However, for SaaS businesses, it’s all about the customer relationship; the sale is just the beginning. SaaS are typically subscription-based, which means the customer can easily sign up, but also can easily un-subscribe if the service does not meet needs. Successful SaaS businesses excel in customer support, marketing and consulting which makes sure any client issues are addressed even before they arise resulting in not only satisfied clients but hopefully delighted clients.

2. Become self-aware
Successful SaaS businesses are in continuous dialogue with their customers and ask direct questions: Why would you pick us again? Why would you recommend us? What can we do better? This all helps them to become more self-aware in research and development innovation, delivering excellent products and services, and keep current clients happy… Drop me a line and let me know if and how we can improve Tuesday Tune up?

3. Rapid prototyping and agility
A manufacturer’s mantra is “producing on spec, on time, and within budget”. SaaS companies don’t enjoy the privilege of a spec. SaaS companies determine the wishes of their customers through prototypes. Produce the first prototype, get it to the market, analyze its performance, adjust, back to the market and have this cycle on repeat until they see improvement in traction and satisfaction. In the industry, this is known as “rapid prototyping”. Google, for example, creates a team of only 3 people and gives them a day to create the first prototype. Why not assign a couple of your in-house engineers this task for one day and see what they come up with. SpaceX is applying a similar approach to building its rockets and space systems.

4. Direct to customer
SaaS businesses will almost always choose a Direct-to-Customer (D2C) path no matter if it is B2B or B2C - no middleman. You own and are responsible for, the product, customer communication, and most importantly you own your mistakes. They invest the improved margins in more effective communications, better client feedback loops, increased service levels, R&D, and other activities that improve their customers’ outcomes.

So, what can you learn from the SaaS way of doing business?

1. Prioritize customer success
2. Become self-aware
3. Develop rapid prototyping and agility
4. Direct to customer

Drop me a line for some hands-on tactics that you can adopt for your manufacturing business today. No-strings-attached.

Best wishes,

Written by

Jelena Franco


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