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What is B2B SaaS? Learn With Examples, Pros & Cons

Saas is a large and fast-growing sector. The growth of the Saas market is tremendous. By 2023, spending on Saas would grow from $229bn to $500bn.

And also, by the end of 2026, the Saas market is projected to reach USD 307 billion.

Most of the online business has started to invest 50% on Saas products, and it’s said that near the end of 2025, nearly 80% of the business would adapt to Saas.

Why is Saas so valuable?

And, why are all businesses adapting to Saas?

Most businesses have guessed that Saas is the future. After the pandemic, it’s now confirmed.

When the whole world tumbled because of the pandemic, most businesses with Saas stayed productive.

Slack is one of the biggest Saas platforms that help businesses keep their employees and associates connected and productive.

It is an online communication platform that helps organizations to conduct meetings and keep their team connected.

Like that, the Saas products are an excellent resource for the business.

But, what is B2B saas? What are its pros and cons? How does it work?

This blog will answer all your questions. This is a complete guide for B2B saas.

Let’s begin!

What is B2B saas?

Saas is a program that is accessible using any device from the web browser.

The Saas company is a service provider that offers software to their customers to resolve their company’s problems.

Unlike the traditional method – buying software and installing it on the system to use, you can access the software through the web browser for monthly or yearly subscriptions with the availability of Saas.

B2B saas is nothing but a Saas organization providing service to businesses or enterprises.

Every time you buy an updated software CD’s can cost you much.

With Saas, you can cut the burden of buying an updated CD of the Software necessary for your business.  

Nowadays, these Saas companies started developing a product, hosting it online, and providing customer service.

They have complete control over the software, providing a great user experience, security, and faster updates.

The best benefit of it is the transparent pricing feature which you can choose according to your affordability. 

Below let’s see the B2B saas pros and cons.

Pros of B2B saas:

  • Cost-efficient:

Unlike the traditional methods, SaaS saves you from purchasing Software CDs each time after an update. Each SaaS company has a subscription model, and many SaaS provider companies price $100 or less per month for their service. If you need any additional service, then it will be added to the monthly fee. You can pay for the service either monthly, half-yearly, or yearly, depending on your comfort. 

  • Flexibility:

The best advantage of Saas is its flexibility. With the software, you can access it at any time and anywhere. Just the subscribed login id and the password is enough to use the facility.

In today’s world, the work from home option is a new trend. In this case, your employee can use the software sitting from home.

  • Timely updates:

This saas business model removes you from the burden of paying for the update. Once you have paid for the service, until the subscription ends, you can use the services. 

If there is any update available, the provider will do it automatically without interrupting your user experience. You can still enjoy the new version of the software on your business.

  • Customer support:

When it comes to service – customer support is crucial. With the availability of 24*7 customer support, you can easily reach them for help at any time.  

Cons of B2B saas:

  • Performance:

Choosing a server and hosting for the SaaS platform is in the hands of the SaaS company. When the server or hosting goes down, the user experience will be at risk. But it’s rare.

  • Connectivity:

Saas runs online. For instance, if you have an internet issue or connectivity trouble, you can’t use it.

Imagine that you’re in the middle of a meeting with your customer using Saas – if your internet is broken, will it not frustrate you?

  • Security:

Using Saas will require you to move your data to the cloud, which opens up a concern on data security.

However, opting for a hybrid cloud option would keep your information safe and give you additional security.

  • Control Issues:

Maintaining and upgrading software could remove your burden. But, when it comes to customizing software to your needs, it’s not possible. You have to depend on and use what the provider is providing.

What is a b2b saas business model?

Inclusion of specific factors differentiates saas business models from other business models, and they are:

Recurring payments:

Saas runs entirely on a subscription-based model. Clients can pay either monthly or yearly, depending on their needs and convenience.  

This payment method will make the saas company recurring revenue, otherwise known as MRR (monthly recurring revenue).

At each subscription, the company will have a sum of the amount in their hand. But, if the client is unhappy with the service and requests a refund. So, until the subscription is over, it will be a liability for the company.

High customer retention:

For any business, it may be customer retention is crucial. In Saas, it is 10 times more important when compared to other businesses. 

Why? If the existing customer is not satisfied, the company will lose the customer and the revenue for the upcoming months. If the customer has taken a yearly subscription and after 2 months, if they did like the service and ask to return the money, the company will lose the next 10 months’ MRR. 

So, a B2B saas business model will value more on customer service. They know that, If they can’t keep their customer satisfied, they will leave your competitor. More than that, a happy customer will bring in referral customers to the site.

Consistent updates:

Compared to other businesses, enhancing the product and selling the next-gen to the customer is not possible in Saas. 

To retain your customer, you have to keep looking for flaws and fix them. Apart from that, you have to keep your site and service updated to increase your customer’s productivity and security.

Security could become a concern in Saas. The threat of hackers can bother the saas owner and put their customer’s information at stake. So, the company has to look for potential threats and ensure whether everything is safe and secure.

Stages of B2B saas:

There are three phases involved in developing a successful saas business, and here they are:

Early-stage:

The early stage is the process of building the foundation of the company.

This is the phase where you will develop your product, find investors, and identify your target customers and needs.

Based on the customer needs – planning effective marketing and sales strategy is common.

At this point, you probably won’t have any customers as your product would be under development.

The company will be pushing itself to bring the products to the market.

Growth stage:

The growth stage is where the company will bring in customers and enhance its business. 

After releasing the product on the market, now the company will be implementing all its marketing and sales strategy to drive customers.

Once the customer has started to come in – the company will have revenue. By reinvesting it in developing products and services, building a customer support team, and adding members to the team will expand their revenue.

The company will possibly drive in more customers and satisfy existing customers, creating a loyal customer base.

Mature stage:

This will be the company’s dream stage. The company will work on its brand value with a reliable product constantly making updates and a well-defined target audience.

At this stage, the company will have stable KPI (Key Performance Indicator) metrics and have a good sum of MRR (Monthly Recurring Revenue).

The saas company will focus on offering a great user experience and creating new products at this stage. 

Because at the growth stage, the company would have invested in automating – customer service software, marketing, and product updates.

Besides, the company’s revenue and brand value will capture many investor’s attention. They will be eager to invest in the company. Thus the saas company can now focus on developing new products and improving their business.

Top 10 best B2B saas companies:

Here are some of the top 10 famous Saas companies that prevail and have authority in their own B2B Saas industry.  

The primary purpose of these companies is to improve the customer’s productivity, business and return on investment.

  • Google:

Apart from being the top search engine worldwide, Google is a top B2B and B2C Saas company. It offers 137 services like Google Analytics, Google Docs, Sheets, Classroom, Google Meet, etc. They allow their customers to access most of their products for free. If any company needs an additional resource or an enhanced service, they can pay them and get the service.

  • Microsoft:

Ah! How can we all forget Microsoft? It is a top company that has 100+ products from various industries.

For communication, they have skype and windows phone. And they do have Microsoft office for office purposes, and they do have share point, Azula, SQL server, and so on.

  • Slack:

Slack is a chat tool created for business. It helps employees and business associates to stay connected through voice, video calls, or chat. 

The purpose of Slack is to enhance the experience of the organizational teams to a certain extent. 

During the mindset of the COVID-19 pandemic, most businesses utilized the service of Slack to keep their associates, team, and employees connected.

The company’s financial growth in the last year was $621 million. They have achieved such a tremendous rate within seven years.

  • Shopify:

Ecommerce giant Shopify is one of the most recognizable brands in the industry. Without any technical difficulties, you can now create your online shop using it.

Shopify offers its customer hosting, storefront, and all other eCommerce functionalities. You can create your shop and directly jump into selling your product in no time. 

  • Adobe:

You can’t take a company like Adobe from the list. When it comes to photo editing or graphic design software, 8 out 10 times, our mind will strike with Adobe.

Adobe is the market leader of graphic designing software providers because of the quality they provide to their customers. They own 50+ computer software products. 

  • Mailchimp:

If it’s email marketing, then you can’t keep Mailchimp out of the game. Every business is capitalizing the email marketing because of its conversion rate. 

Using Mailchimp, you can schedule automated emails to many people at once and measure their results. Initially, you can use it for free. If you find it to be more beneficial, then you can hop into a subscription. 

  • Hubspot:

Hubspot is an inbound marketing solution that provides various facilities to their user.

If you’re a student or a budding marketer, you can learn from their free digital academy.

You can use their three tools: marketing, sales, and service if you’re a business person. 

With HubSpot, you can use tools like CRM, social media marketing, content management system, web analytics, and SEO to improve your sales and marketing process.

  • Dropbox:

Dropbox is a cloud storing service providing company that owns four products. 

Instead of buying extra hardware to store data, you can buy storage space from dropbox and store your data and documents on the cloud.

You can choose the subscription depending on your storage requirement and pay monthly or yearly. 

The current value of Dropbox is $9.55 billion.

  • Survey monkey:

SurveyMonkey is an online survey development software.

Using their survey features integrated with your website, you can know what your employee thinks and know whether your customer is satisfied or not.

Analyzing the data and representing it will help you improve your sales and satisfy your customer.

B2B saas pricing:

Here are the three primary pricing models that a B2B saas organization uses:

  1. Cost-based saas pricing:

The cost-based saas pricing is one of the easiest and simplest pricing models to start with. It works by evaluating the cost to develop the software plus a small percentage for profit.

For example, if the software cost is $50, plus a 30% profit cost of $15, the subscription would be 80 dollars a month.

When it comes to this type of pricing strategy, it has to suit the customer’s demand, and it has to provide value for the money. If not, people will not purchase from you. 

For the foundational stage, this pricing model would be a better one. Then as time passes by and you keep changing your stage, you have to change your pricing strategy.

  1. Market-based saas pricing:

The market-based saas pricing strategy is not a complex one. The company will seek what’s available in the current market, look at what their competitor is charging, and then find a price that fits their customer’s budget.

This method will make the customer compare the pricing with other saas service providers and choose based on the customer service and reliability of the service or product.

But, on the downside, the company has to stick with the market price even though it has unique attributes in hand.

  1. Value-based saas pricing:

Value-based saas pricing strategy will make the company fix prices based on the outcomes of their customer experience. If your customer gains more value from your service, they don’t mind paying you high. Thus, the company will have the opportunity for larger profit. 

In the B2B saas business, the customers will only look for efficiency and how far the service is beneficial in achieving their goals quickly.

If your business can satisfy it, the customer will be ready to pay for you at whatever cost you fix.

You have proved yourself as a valuable one so, it won’t be a matter for them to subscribe to you. A high value will result in high profit.

B2B saas marketing:

Marketing a B2B saas product is different from marketing a B2C saas product. Some business models can prove to be successful using social media, but not all. Here are the top marketing methods for B2B saas that will bring much attention:

  • Product trials: Who doesn’t like to use a product for free? In the saas industry, a free trial is beneficial in converting a lead. If the people use it and sense the positive impact of your product or service on their business, they will pay for you.
  • Content marketing: Content marketing is crucial for all online businesses. It will create brand awareness, drive traffic to the website, convert leads into a customer.
  • Search engine optimization: Both content marketing and SEO work on the same page. It makes your content discoverable on search engines like Google, Yahoo, Bing, Baidu, and other search engines. It is necessary to use on-page SEO as well as off-page SEO methods when it comes to search engine optimization.
  • Search engine marketing (Ads): Placing targeted ads can also be a good way to increase traffic and turn website viewers into customers. When it comes to B2B saas, you can use Linkedin to post ads and reach out to your customers as the platform is filled with business people.
  • Email marketing: By the end of 2025, there will be more than 4.6 billion email users. Every business benefits from email marketing. Using it, you can send engaging content, newsletters, blog post links, and offers to your customer to convert them.
  • Referral marketing: Referral marketing is vital for a business. Instead of spending a lot of money on marketing, a satisfied customer can make referrals to your website. 

Conclusion:

Plenty of businesses are adapting or opting towards saas applications for their business. And Still, the number of Saas applications is increasing in the market.

If you’re looking for a job in this sector, it would be a perfect time to know, learn and get into the business and thrive.

If you’re looking to accommodate the saas product into your business. Then this is the right to invest in the saas platform to yield massive success in business.

Saas is creating a revolution, and the future of business will depend on Saas. It enhances the productivity and business process to improve the return on investment.

With the above-given information, you will get in-depth knowledge about the B2B saas industry. Get familiar with it and utilize Saas on your business to thrive. 

Cheers! 

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