3 reasons software as a service (SaaS) is the future for WordPress developers

Flexible, scalable, sustainable

Technology is often at the forefront of any discussion about innovation in the digital world. In WordPress circles, for example, chatter about the REST API has recently dominated the virtual water cooler. But there’s a development on the business side that’s coming sharply into focus — and it could net you consistent, regular cash without making you break a sweat. We’re talking about software as a service (SaaS).

This is a software-licensing model that all but guarantees regular income from paying customers, as opposed to the “one and done” model that many providers often employ. In this article, we’ll offer three reasons why software as a service is the future for WordPress developers.

But first, let’s take a closer look at the model itself.

An introduction to software as a service

Software As A Service Pressbooks
The self-publishing eBook platform Pressbooks uses a SaaS business model and is built on WordPress.

Software as a Service (SaaS) is a term that can have a number of meanings in different contexts. For our purposes, it’s a business model in which customers pay a regular fee to access products and services over a period of time.

Software As A Service GoDaddy
GoDaddy offers a number of tiers of WordPress hosting subscriptions that increase in cost based on the addition of included services.

Software as a service has become a bit of a buzzword as of late, since many WordPress-related companies are adopting this approach. It’s traditionally been the domain of other types of software companies, but as WordPress’s dominance has grown, the idea has been ported over and adapted for the content management platform.

The increasing popularity of the SaaS approach is no surprise, as it can benefit most WordPress developers.

 

This is particularly true when your main business involves creating themes and plugins, which are naturally suited to a subscription approach. Even if your product doesn’t have an exact match, there’s nothing to stop you from adapting “SaaSified” pricing options to fit your current business model.

Why SaaS is the future

With the definitions out of the way, let’s discuss the real crux of the matter: Why should you switch your business model? To answer that question, here are three solid reasons to get “SaaSy.”

1. SaaS provides regular and sustainable income

Software As A Service OptinMonster
OptinMonster transitioned from a traditional ‘one-shot’ business model into a full-fledged SaaS company.

In the traditional model, a customer hands over money in a one-off deal to secure a product or service. For the buyer, this arrangement is familiar, comfortable and easy to understand.

However, for the seller, this singular payment can mean they’ll have to provide a complete service for a set period (potentially forever), with no additional remuneration. What’s more, they’ll have to continuously make an effort to look for completely new business to keep the doors open (more on this later).

The solution to this dilemma is to switch to a SaaS pricing model, which offers the following benefits:

  • You get regular income for a set period of time.
  • You can track monthly recurring revenues to get better estimates of income, rather than relying solely on projections.
  • The price can often be more cost-effective because it is broken up into smaller payments, making it relatively easy to get customers on board.

What’s most important to remember is that SaaS is a pricing model with a future — especially for your WordPress business.

2. The SaaS model is scalable and flexible

Software As A Service Plans
WordPress.com offers several tiers of plans, in order to serve as many customers as possible.

“Scalable and flexible”’ can mean many things to different people, but in this context, we’re talking about your ability to use the SaaS model as the foundation for your pricing strategy.

Of course, it goes without saying, that a pricing model that can grow with you will provide more value long-term. It can even be something you ultimately build your services around. As such, you’ll probably only need to tweak your strategy when you implement new products and services. Furthermore, adding pricing tiers based on your latest products will be a simple extension of the plans you’re already offering.

When choosing a model, you’ll also want to consider price increases.

While upping a traditional set price based on the fluctuating market might cause you some lost sales and put off customers, SaaS allows you to easily adjust prices based on your current or prospective financial outlook. An additional bonus, thanks to the regular billing cycle, is that increasing your prices will have less of an impact on the customer’s wallet, which means you’re less likely to get pushback.

3. SaaS refocuses your attention on existing customers

Software As A Service Jetpack
Jetpack’s SaaS model means they can offer a premium tier, while still adequately catering to their free-tier users.
Ultimately, the software as a service pricing model is geared toward the customer.

 

Businesses have traditionally relied on new customers to keep the income rolling in, but there are a number of flaws with this approach — you can end up at the mercy of fluctuating markets and become locked into a cycle of constant improvements and competition.

In contrast, the SaaS model can relieve this burden by letting you focus less on finding new leads, and more on serving your current customer base. You can also cultivate more loyal customers by offering them continued support and updates, knowing you have the revenue coming in to implement those promises. That is a key reason software as a service is so popular. It can help you solve a wide range of business problems, while improving your sustainability and profit margin at the same time.

Conclusion

While technological innovations are important, it’s a recent business development that’s grabbed the attention of both consumers and professionals within the WordPress community. As discussed, the software as a service business model stands to revolutionize the way developers sell their products and services online because:

  1. You can achieve more regular and sustainable income with this model.
  2. SaaS is scalable and flexible, and can meet your needs as a growing business.
  3. You won’t be completely reliant on finding new conversions, as it’ll be much easier to focus on your current customers.

It’s time to figure out if your business can benefit from the SaaS business model.


Also published on Medium.

Image by: dullhunk via Visualhunt.com / CC BY

Tom Rankin

Tom Rankin is a musician, vegan, and staff writer at WordCandy. When he’s not writing about WordPress, he’s on the look out for the ideal beard comb.