Leveraging Overhead to Pitch SaaS to Small Businesses

At the start of the SaaS revolution in the mid 2000s, cost savings were the primary driver used to pitch SaaS solutions to enterprise organizations. As the market has matured and SaaS features have expanded, the focus has shifted to emphasizing the service-oriented benefits of a recurring, cloud-based software subscription. Nonetheless, cost remains a primary factor for small businesses, and it’s important for SaaS providers to effectively illustrate the savings inherent in a quality subscription solution.

Emphasizing Infrastructure

One of the biggest benefits of SaaS over one-time software licensing is the savings in infrastructure garnered by a third-party hosted product. Many small business owners may underestimate the costs inherent in purchasing, maintaining, and operating a fully functional server cluster, especially when it comes to scaling that hardware up as the company grows.

Drawing attention to the flat-fee nature of a recurring SaaS subscription is a good way to emphasize the cost disparity compared to self-hosted, licensed solutions. To make the most of this, vendors should have a cost comparison pre-prepared, with examples like illustrating how much more expensive it is to have to double on-site server hardware to accommodate a business expansion versus simply doubling the number of SaaS licenses being paid for each month.

This can be taken a step further by drawing attention to scalability costs in relation to profit and loss reporting. Every industry abounds with stories of companies who stumbled during a growth phase when money simply didn’t exist in the budget to pay for necessary expansions of their infrastructure, especially as those purchases amount to relatively enormous one-time expenses that can throw the profit ratio into disarray long after the purchase is complete. Remind small business leads that SaaS payments will be spread out over multiple installments, reducing the cost impact from moment to moment, and smoothing those potentially fatal spikes.

Staffing and Upkeep

Beyond hardware, the biggest expenses for an on-site software solution are IT staff, downtime when things go awry, and the constant upkeep necessary to avoid it. The real dollar costs of these areas should be included in example projections pitched to clients, and every opportunity taken to remind them that they’re offloading those costs to the SaaS provider.

From the initial sale to the continuing relationship, small business customers should always have a complete accounting of the overhead costs inherent in on-site software in order to pitch the clear savings provided by SaaS alternatives.

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