Often terms involving computers use acronyms. We may not be familiar with frequently used B2B SaaS terms too. We may know B2B stands for business to business, and SaaS is Software as a service.
What is SaaS?
Software as a service is a process of applications used as a service to other businesses. These applications are used over the internet. The process helps decrease the management of software and hardware.
Often SaaS applications are discussed as Web-based software. You may even hear on-demand software or hosted software as other terms to describe SaaS applications. Whenever you hear these terms, you should automatically think of them as SaaS applications.
The positive is the programs operate on the provider’s servers. The provider manages the security, performance, and access to the application.
What is B2B SaaS?
Now you understand the term “SaaS,” you can adequately guest the meaning of B2B SaaS. B2B presents for companies selling products and/or services for other companies. Hence, B2B SaaS refers to companies who provide software (app, extension, add-ons) to other businesses as a service. Their products function to assist companies to operate more efficiently and effectively with highly automated technology.
The primary purpose is to cut down on human resource expenses. Due to this value, many companies use SaaS software to optimize their businesses performance. They utilize sales, marketing, and/or customer care services to generate more revenue.
Besides Google, another famous B2B SaaS you know is Microsoft, Adobe, Slack, etc.
The current trend with e-Commerce companies is to invest strongly in customers’ care systems. Once they land the first-time buyer, these customer care systems will keep them as loyal customers. Many top B2B SaaS companies provide customers with successful apps for retention.
Now you have a healthy understanding of B2B SaaS. You may already have this understanding, though you are asking, “What do these other B2B SaaS acronyms and terms mean?
The Most Frequently Used B2B SaaS Terms
What is MRR?
MRR is an acronym for Monthly Recurring Revenue. Very simply put, MMR is a measure of your predictable revenue stream. A primary purpose of MRR is to permit performance reporting across dissimilar subscriptions terms.
What is Performance Reporting?
Performance reportings allow you to take a detailed and measurable look at your company’s cash flow situation. Understanding how to read specific metrics enables you to control the position to produce particular results.
What is ARR?
ARR is an acronym for Annual Recurring Revenue.
ARR is a key metric used by SaaS or subscription businesses with term subscription agreements, meaning a defined contract length. It is defined as the value of your term subscriptions’ contracted recurring revenue components normalized to one year.
What is Gross Churn?
Gross Churn Rate is the percentage of recurring revenue lost due to both cancellations and downgrades. A negative Net MRR Churn Rate occurs when expansions exceed downgrades and cancellations and is a strong positive indicator of company health.
What is Net Churn?
Net churn measures the lost revenue from cancellations and downgrades after factoring in new revenue from existing customers. The new income might include upgrades or other forms of expansion revenue.
What is ARPA?
ARPA is an acronym for Average Revenue Per Account.
ARPA is calculated by the average monthly recurring revenue (MRR) per account. Subscription and SaaS-based startups typically track ARPA within the application.
What is CAC?
CAC is an acronym for Customer Acquisition Cost.
CAC is the cost associated with acquiring a new customer. The metric is most commonly used in SaaS but is found in other various industries.
What is LTV?
LTV, also referred to as CLV, is an acronym for Lifetime Value, which is short for Customer Lifetime Value. Lifetime Value estimates the aggregate gross margin contribution of the average customer over the customer’s life.
What is CAC:LTV?
LTV:CAC might be confusing, though we went over CAC and LTV above. LTV:CAC is the ratio of the customer lifetime value versus customer acquisition cost. The ratio is one of the critical indicators for future success.
What is KPI?
KPI is an acronym for Key Performance Indicator.
KPI is a measurable value demonstrating how effectively a company achieves key business objectives. KPI management is completed using dashboard reporting software, giving your entire organization insights into your current performance.
What is CPL?
CPL is is an acronym for cost per lead.
CPL is the average amount you spend on marketing to acquire a new prospect. It’s essential to track your CPL for each marketing channel to see how successful your efforts are/were.
What is NPS?
NPS is an acronym for Net Promoter Score.
Most simply put, NPS is a customer loyalty and satisfaction metric. The score is found by a questioner asking customers how likely they are to recommend your product to others.
What is Freemium?
Freemium is a free version of SaaS. The marketing model basically lets the future customer test the services to see if they want to try the paid versions of their services.
What is CTA?
CTA is an acronym for call-to-action.
Whether you’ve created a PPC ad, a new landing page, or a relevant blog post, a marketing-orientated CTA is the messaging behind your deliverable that prompts your readers or viewers to take necessary action.
What is Expansion Rate?
Expansion Rate is a SaaS Metric. The expansion rate is the additional recurring revenue generated from existing customers through add-ons, upsells, or cross-sells.
What is PMF?
In a nutshell, finding product-market fit (PMF or P/M fit) means understanding and validating the core value hypothesis of your product. This single key element solves a burning problem for your customers.
How many SaaS companies are there?
In 2021, there were approximately 15,000 software as a service (SaaS) companies in the United States. Together, they had around 14 billion customers worldwide. The United Kingdom takes second place with 2,000 companies and two billion customers worldwide. SaaS is a software licensing model delivered via the cloud.
Now that you know the meaning of the most frequently used B2B Saas terms, how can SaaS help your B2B model?
How can SaaS help your B2B?
There are many reasons to consider SaaS in your B2B model. Some of these might be obvious, but these are the top 11 reasons why you should use SaaS.
1. Simply Market Research
A key to a business’s success is market research. Often companies wait until it is too late. Creating the right strategies is vital when you need to set realistic expectations for future growth. Market research assists in making informed decisions. Up to date, accurate data allows you to sell your products to a specific target audience.
2. Learn About Your Audience
SaaS allows you to learn about your audience. How your audience responses to your product is a great way to evaluate your product.
When you conduct usability tests, you can use specific SaaS applications to learn how your audience interacts with your product. You might expect the end users to operate in one way, and they use it not as expected. Knowing how they use the tools allows you to either improve the existing product or produce a completely different product to answer your customers’ needs.
3. Time and Money Savings
Some spending is reduced or eliminated by using the proper software. Using SaaS products can create huge savings. Your business can save money by removing the upfront costs for installing and purchasing software instead of using third-party vendors’ SaaS applications downloadable and nearly free from maintenance.
Next, it is crucial to consider the savings the software products generate. SaaS solutions are meant to help you avoid previous troubles and issues. Savings can occur through project management, customer support, etc. Whether to improve your strategies with data collection or eliminate errors, SaaS products can save your company time and money.
4. Increased security
If you believe increased security is not important, then consider the average cost of a lost laptop is over $50,000. Obviously, the hardware contained in a laptop is worth much less. When you consider the cost associated with the data breach, lost intellectual property rights, legal fees, etc., you realize how expensive a lost laptop can be. This study found the data breach being the most expensive component as it represents 80% of the price.
B2B SaaS applications on the cloud can keep valuable and sensitive data secure. There is no reason to store data on employees’ computer devices. The data is securely stored on the vendor’s secure severs for your employees to access.
5. Improve Content Marketing
SaaS software can help impress your users through content marketing. Content marketing tools out there are almost endless. It is easy to become an expert marketer. Tools like Google Analytics help analyze your market. Other devices can help you turn your articles and videos into visual content in seconds.
Creating engaging content has been simplified by SaaS applications. SEMRush allows you to detect targeted keywords from your Google Analytics search easily. Then when you are ready, you can use tools like ContentStudio for actual content curation!
6. Remote Work Friendly
The ability to work remotely provides a flexible and agile work environment. You and your team can access vital business applications from anywhere in the world. The ability to work anywhere means you can also hire from anywhere in the world too.
Remote work environments are one of the most compelling benefits of cloud computing. Forbes reported on a number of employer benefits. Remote work increased productivity. Businesses have found 66 percent of the time; remote employees increase productivity. Employees are also found to have lower absenteeism and stress levels. these things have shown a decrease in costs by having less office space
7. Project Management
SaaS software can help you manage your time, employees, and project. Bit.ai is a tool for document collaboration with everyone you wish to include. Not only can you share these documents, but you can develop workspaces. In these workspaces, you can communicate and collaborate with others in real-time anywhere on the planet.
Tools like Bit.ai helps save time, eliminate errors, and keep documents organized.
Communication is the primary tool for project management. Everyone should be involved with their goals and tasks. Tools like Slack and Airtable help make getting this information possible in real-time. Real-time conversations should help boost their productivity and the expected results you provide your users.
8. Backup and disaster recovery
One of the most significant reasons for moving to online SaaS applications is its robust backup and disaster recovery services.
Disasters do happen. 80% of respondents had an incident with their computer within the past two years. An IT disaster recovery plan had to be used and ultimately cost time and money. Using cloud-based SaaS applications can help protect vital business data.
9. Seamless CRM
If you are not familiar with CRM, it is Customer Relationship Management. The platform is ideal for UX optimization and marketing. CRM provides support for:
- Email campaigns
- Target prospects and convert customers
- User Communication
- Strategy and campaign management
Seamless CRM SaaS software experiences at your disposal make you look like a leader in the tech community. Look for marketing automation and lead generation when looking for B2B Saas solutions. The ability to automate your emails, integrate user profiles, create workflows, and publish the content will be a massive time saver.
10. Amazing Customer Support
Microsoft is one of the leaders in B2B SaaS applications. They estimate 54% of users have a higher expectation for customer service. Product quality and customer service were already paramount and showed the importance of improving customer support as soon as possible.
B2B SaaS applications can help you with customer service by prioritizing documentation. The communication that occurs between the customer allows a relationship between the customer and your company. The documentation process also helps measure your progress. Understanding if the current protocols are working will help you proactively choose the proper channels to resolve your customers’ needs.
11. Being able to make money online
Looking at the top 10 benefits, a great conclusion with SaaS is that you are able to do a lot of work yourself when you are using different tools. Connecting them together and automating the manual processes allows you to scale quickly, that is something you can use as the basis when you would like to make money online.
One way to make money online is by referring your favorite software, when someone purchases the software on your recommendation you will start earning a commission percentage. This is a great way to build a new revenue stream for yourself or your business. See some of the software you can recommend in our Marketplace.
Learning about B2B Saas can be a daunting experience. Hopefully, you were able to learn plenty about the topic. SaaS is more common than you may expect. As a result, you might be using some SaaS applications and didn’t even know it.
If you are using applications or plan to in the future, hopefully, some of the terminologies will help you.
There are hundreds of high-rated SaaS software solutions on the market. You now should have a broader understanding of how B2B SaaS applications can help your business and make your users happy.
B2B SaaS applications offer many benefits. The low costs, easy upgrades, and excellent benefits in resolving problems and making things easier are just part of why businesses go for SaaS. SaaS is the future of marketing, business operations, and smooth work. With the right tools, you can automate many of the tasks, gather helpful insight, and make the experience for your users the best it can be.
Once you start using different tools and get to know them well you can also start referring them to others and make money out of that. See our marketplace with B2B SaaS partner programs.