Just a few years ago the cloud was a pipedream, dancing on the tips of futurists’ tongues. Few people even seven years ago, though it would arrive so quickly. But now it’s ubiquitous and businesses love it. Gartner has predicted that by 2025, more than 80 percent of all businesses will use the cloud for their customer relationship tools.

Given that the cloud market is expanding at an exponential rate, more and more companies are looking to offer software as a service. Here’s how to succeed in this exciting new market.

Offer A Range Of Packages

If you’ve ever used a SaaS product, you’ll have noticed that they invariably come with a trial version of some description. Usually, this trial version is free, but it’s limited in usage, either by time, volume or functionality. Take TrustPilot, for instance. It’s an online tool that collects reviews on your business website, boosts your ranking and generally increases your presence online. It offers a free trial where users can experience a large chunk of the functionality of the software, but the trial only lasts 14 days. After the trial period is up, businesses are then offered a range of packages, from the most basic to the most comprehensive.

Define, Measure, Analyze, And Control

When developing new software, it’s a good idea to collect QA metrics to make sure that your product is performing as it should. You need to be able to collect data telling you whether the features you are including are popular, useful for customers and strictly necessary. Collecting data also allows software firms to segment the market and define different user packages. If you want to make changes, always use A/B testing first so that you can sandbox segments of your customer base. Don’t make changes across the board without finding out whether they are beneficial first.

Offer Professional Services

Professional services can be good, or they can be really bad. They can be good because of the fact that they have the ability to increase revenue and loyalty of customers. But they’re bad because they cost a lot to deploy and reduce margins.

A general rule of thumb is that professional services make up only around 10 to 20 percent of new annual contract value. Their gross margin should be around 20 percent, meaning a total gross margin of around 70 percent, assuming an 80 percent margin for recurring revenue.

Stay Committed To Your Customers’ Success

Software companies need to win new customers, but the main selling opportunities are to customers that you already have. The revenue you get from upselling should, under normal circumstances, amount to 25 percent of your total new annual contract value.

To make this happen, you need to have a customer success team in place that helps customers leverage your product to the best of their ability. Many software companies make courtesy calls to their clients to discuss their use of the product and to find out if there is anything they can do to make their experience better.