The 3 Most Common Early SaaS Mistakes (And How to Avoid Them)

saas mistakes

Obviously, there are a ton of mistakes that can stall or even bring all growth in your SaaS product to a grinding halt.

Not exactly something that you want in the early stages of your business.

On the other hand, it’s important to keep in mind that the biggest mistake you can make is getting stuck in paralysis by analysis.

The paralysis of fear can stop you from making progress.

That’s why it’s important to always move forward, but take time to look back.

If you are in the early stages of your product, it may be time for you to look at your current practices and compare them with the common mistakes of others in the SaaS world. While our list isn’t exhaustive, it does have the three major categories of mistake-making along with the most common mistakes in each category.

So, pull up your website in a new tab to constructively compare with our list. Enjoy.

Mistake #1: Pricing

Don’t expect this to be a master class on how much you should be charging per month/quarter/year. The truth of the matter is, the price of your product is relative and can vary wildly due to a number of factors. There are entire consulting companies focused on A/B testing your prices.

Bonus: Here’s a great post about detailed pricing.

The relativity of pricing is especially true in the SaaS world.

Let’s take project management software as an example (since most of us use one). There are multiple products that offer a powerful tool for free with paid options around $8-20/month. You also have tools in the same space with no freemium model and charge as much as $249/mo.

Pricing should be based off of how broad of an audience you serve and how unique your selling proposition happens to be (more on this later).

So, what exactly are the mistakes you can make with pricing?

No Price

So many software services either don’t have a page that talks turkey or has a “pricing” page that doesn’t have the slightest detail about prices. In the rare case that you are only going after whales (Fortune 500) this tactic may be acceptable.

But you’re most likely going after growth. Give the people what they want and include the data they clicked to see.

One Price

Simplicity is great. If done correctly, having simple pricing improves clarity and practically forces a person that visits your site to make a decision. However, if you only have one price; it limits the amount of people who can imagine themselves in the seat of your tool.

A single price can’t fit every budget. Nor can one price speak to the high-end buyer who wants a decked-out service. Experiment with two-four price points to catch the most fish.

Too Many Prices

While we can’t say how many pricing options are right for you or the specific method to price your products, it should be apparent if you have too much on the page. If you have a lot of information to convey (e.g. dozens of options, complex pricing); here are a few tips to condense it down:

  • Have a toggle between monthly/quarterly/annual options
  • Literally condense your options to have fewer
  • Create a tool that allows for customized pricing (our pricing is based on subscribers, so we made it easier to figure out cost).

Mistake #2: Disorganized (Or Undocumented) Sales Processes

If visitors have been made aware of your product and have made their way into your lead funnel, they hopefully become motivated to the point of making a decision. That is the point in time where they are on your sales page, your webinar, or even on the phone with your or your reps.

Since it is such a crucial part of the process, there are bound to be mistakes and the sales process should be an ever-tweaked system. That said, there are a few early SaaS mistakes that are too big to let continue (in regards to your pitch).

Too Broad

A focused pitch in a target market or industry is incredibly valuable. If you’re sending bulk traffic to your site, or blind leads to your reps; chances are your conversions are lower than they should be.

With a narrow market, you can tailor the pitch and speak directly to the specific pains of your clientele and decision makers. Instead of a generic pitch solely based on your product’s features, it becomes a story about how people just like your prospect can and do use said tool.

Too Harsh

Sales is still, by and large, a rough world. Reps haggard from the rough road have fallen into poor habits. These habits usually end up in failure or the high-pressure pitch. A fast, often disingenuous conversation or demo that results in (sadly) a decent front end number. Unfortunately, these customers don’t stick around.

In fact, it would take an enormous amount of customer TLC to wash the experience off of them. Focus on developing sales habits and documenting the process of your sales team to avoid unnecessary pressure.

Too Fast

Buyers are loving the internet. There is a renaissance of available information that has educated people to explore every possibly. This new age of buying has also lengthened the buying cycle. It’s not common in the SaaS industry to just get leads and try to sell them immediately, but your sales funnel may not have all of the required material for the self-education process.

Ask yourself a few questions:

  • How many pieces of content are in my drip-fed email campaigns?
  • Is the list properly segmented to give the right people the right info?
  • What questions are prospects asking reps?
  • Could those questions be answered with another piece of content?

An honest appraisal of your current content will tell you if you need to make more data available to your leads to better qualify them for sales. Then, it’s a matter of developing, publishing, and automating.

Mistake #3: Poor Customer Service

According to HelpScout:

“News of bad customer service reaches more than twice as many ears as praise for a good service experience.”

Growth is about gaining new users. It becomes an obsession and (if left untended) can negatively impact your existing customer base. In the early days of your product, low churn is critical.

If too many people are leaving, you can estimate that the ones staying aren’t telling their friends about your software. Keeping people happy and taking care of issues shouldn’t take a backseat in priority and can actually increase growth if done correctly.

Here are a few of the top reasons people leave your SaaS.

Not Updating Fast Enough

If you’re in the early stages, there are noticeable problems with your product. That’s perfectly normal and not reason for people to leave (unless it’s really jacked up). Failing to deal with those issues and squash those bugs is what will get you in hot water.

Most development teams are on some form of Agile/Scrum process and should be able to deal with problems and pump out iterations fast enough to keep users chugging away.

Watch, listen, and implement the necessary changes.

Not Onboarding Properly

Solely focusing on herding massive amounts of people to your app without a detailed plan after you have them on the inside will equal high churn. Your users need a digital guide map to help them achieve initial success with your product.

Setting up a series of tutorials, prompts, emails, or even personal interaction will not only keep them “onboard”, but will increase the likelihood that they will suggest your products to notable friends and colleagues.

Here’s our post on the importance/how-to of onboarding.

Not Communicating Post-Sale

This is perhaps the most common mistake on the entire list. Why? Because it’s technically the least necessary.

You can have your pitch perfect, your pricing exactly right, constantly update your software, and onboard like a champ and grow your business just fine. Then, something new (in your niche) comes along touting a new unique proposition. Your user is wooed by their sales funnel and becomes their user.

Again, why?

Because you were a silent partner. Continuing the conversation has an impact on the lifetime value of your customers in terms of their longevity with their initial purchase and the ability for add-on sales in the future (because most founders create more than one gizmo…you know you already have the idea for your next project).

Do everything in your power to keep your email open rates up and the story will continue.

Let’s Wrap This Up

Mistakes are a good thing, but only if you learn from them. While our list of woes is full of the most common mistakes, your sales process and customer service are parts of the business that should constantly be improved upon. Our hope is to help you avoid the pain of other early SaaS companies, and correct the noticeable issues to allow for your optimum growth.

Honest question: What has been your #1 business mistake and what have you learned from it? Let us know in the comments below!