What a strange time to be alive.
In the span of a few months, life as we knew it has changed. Thanks to COVID-19, face masks and social distancing are the norm. And now there’s even news of murder hornets. It’s definitely hard not to panic in this environment.
Image Courtesy of Know Your Meme
But, even though we’ve entered into a period of economic uncertainty, one thing’s for sure: Consumers still need the service that you provide. Whether you help people run their business or you help them run away from reality for a little while, people still want what you’re selling. However, in a pandemic-ravaged economy, buying and selling isn’t as straightforward as it once was. With rising unemployment numbers, cash isn’t flowing like it used to. To keep your SaaS afloat, you’ll need to innovate your business model in response to these crazy times.
These are the four tasks you must do immediately:
- Monitor your business cash flow
- Minimize customer churn
- Manage your teams while working remotely
- Market your business to stay alive
Now, let’s explore each and create an action plan to crisis-proof your SaaS.
How to Manage Your Cash Flow During COVID-19
You’re lucky if you’re selling a collaboration or video conferencing tool right now. These businesses are seeing incredible growth due to the surge of remote work and social distancing. But what if you’re not like Zoom, Slack, or Skype?
Here’s what you need to do:
Rework your business plan
Your old business plan is burnt toast. Toss it in the garbage because there’s no saving it. Instead, take out a blank sheet of paper and figure out what you need (and need to do) within the next 6-18 months to stay afloat.
Remember to keep your plan short-term because, in the midst of a worldwide crisis, you can’t predict what may happen five years down the road. Answer these questions:
- What is your business mission in the next few months?
- Who is your target demographic? Who will benefit most from your services?
- What vendors will you use?
- How will you market your services?
Some expenses are more important than others. Separate your expenses into three groups: mandatory, nice to have, and non-essential.
Reduce unnecessary expenses
After deciding which expenses are vital and important to the operation of your business, cut the non-essential ones (i.e. the third group). Don’t go crazy and attempt to cut two-thirds of your expenses at once because that could lead to instability across your entire company. After acclimating to the first round of cuts, readjust, and see if you need to make additional reductions.
Ask for financial consideration from your vendors and suppliers
No business operates on an island. You consume from other businesses, too. It never hurts to ask those vendors and suppliers if they can extend temporary financial assistance, such as a discount or an extended payment term.
Embrace the virtual team model
You may be forced to work remotely now, but why not extend the “work at home” arrangement indefinitely? Instead of returning to an office where you’ll need to cover the lease and the utility bills, switch to a remote team for the next 6 to 18 months. This can free up your cash so that you can continue to afford your team.
Re-evaluate your marketing strategy and ad spend
Don’t immediately stop marketing. Continue marketing but change your approach from the hard sell. Instead, focus on building a relationship with your customers and getting them to trust you. We’ll discuss more about marketing later in this post.
How to Reduce Churn During a Pandemic
Churn is likely in the good times and it’s inevitable in a crisis. However, you can still reduce churn. Yes, even during a global pandemic. Here’s how:
You’ve heard of upsell. Now meet downsell— upsell’s unpopular younger cousin. But the good news is that downsell is in the sell family. By offering this option, you’ll still bring in some revenue. It may not be as much as you’re accustomed to, but it’s better than losing your customer outright. Offer a churning customer a stripped down version of your service at a reduced price (i.e. a downsell). Remember, this isn’t a permanent way of business. It’s just an acknowledgement that everyone is in a tough spot right now.
Give renewing customers the option to switch
No one likes the idea of locking into a one-year agreement right now— including many of your customers. Give your customers the option to go month to month so that they don’t feel trapped by an annual agreement. You can always offer the one-year agreement, too, but incentivize it with a special (temporary) discount.
Allow delayed payments
Offer select customers the option to defer payments for a month or two until they’re financially able. You may only wish to do this with your most loyal customers as a retention strategy.
If you do offer a one-year agreement, allow installments. Instead of demanding that the entire annual fee be paid upfront, break the fee into monthly or quarterly amounts.
Allow customers to press pause
Instead of losing your customers because they simply can’t afford to stay, offer them the chance to pause their service for an extended period of time until they’re able to resume. This gives you the opportunity to continue reaching out to your paused customers via email. During a pause, you can nurture your relationship and stay top of mind so that they’ll return once they can.
Create case studies of in-crisis use
Some customers will find new uses for your service during this pandemic. Find those customers and highlight them in crisis case studies that you can share with your other customers.
How to Manage Your SaaS Team Remotely
If you’re new to working remotely, it’s definitely an adjustment. Use these tips to find a steady path for you and your team members:
For the newly remote, the shift is hard. Your team may feel unsupported which will negatively impact their productivity and quality of their work. Help your team feel supported with frequent personal face-to-face check-ins (at least once a week, but more often if you can swing it). Also make it a priority to check in every day via chat.
Finally, be flexible as everyone now adjusts to their new normal.
Do virtual team building activities
When working home alone in the midst of a global pandemic, your team members are bound to feel lonely and isolated. Combat those feelings by participating in virtual team building activities.
For example, start weekly meetings with each team member sharing a positive thing that’s happened to them that week (a rose) and a negative one that they’ve learned from (a thorn). Or, if you don’t do meetings but are in touch with each other over chat, create a photo of the day activity where team members take a photo of something around the home, like their desk setup.
Gifts are always welcome. Send special gifts, including branded swag like company t-shirts, to encourage team spirit and show your team that you value them.
How to Market Your Business During a Pandemic (Without Being Insensitive)
Yes, marketing is still important, especially during these times. If you want your business to survive, it can’t stay stagnant. It must continue to grow.
Fortunately, people are spending more time online than they have ever before. This fact makes them easier to reach with your digital marketing message. It also makes them more inclined to use online-based SaaS companies for their needs. Here’s what you need to know to market during a global pandemic:
Don’t do the hard sell
Now’s not the time to push someone to buy.right.now. Instead, focus on trust building and use empathy to let your prospective customer know that you value them.
Focus on content marketing
Finally, you can start that business blog you’ve always wanted to create. It’s more important than ever to invest in content marketing. Content marketing includes blog posts, email newsletters, eBooks, webinars, case studies, podcasts, and more. Content marketing is important because it humanizes your SaaS and allows you to build a relationship with current and prospective customers. Be one of the first websites that popup when people search Google for solutions to their problems.
In lieu of aggressive ads that no one wants to see right now, content marketing allows you to educate your audience and earn their trust slowly but surely.
Pivot your service
Should/ could you change your service to meet the needs of a post COVID-19 world? Many SaaS are pivoting in response to new demands. Think of ways that you may be able to tweak your current offerings to accommodate current and even new customers. Perhaps you won’t actually need to change your service but instead change your marketing language so that customers understand how your service can help them now.
Even in the midst of the Great Depression almost 100 years ago, many businesses not only survived, but thrived. Yours can be a success story, too. Use the above tips to crisis-proof your SaaS and grow.