While the jury is still out (at least in the US) as to whether we are ‘officially’ in a recession or not, it is clear that an economic storm is rapidly approaching - and it is time to prepare. It’s time for Software and SaaS Companies to become far more agile, pivoting their pricing and packaging to meet rapidly changing markets and customer needs.
The good news is that if you ‘do this right’, you can not only meet the challenge of today but build your organization to be far more nimble and productive, meeting and exceeding your sales targets both now and in the future.
What’s the forecast?
The combination of the Russia-Ukraine war driving inflation together with the economic crisis resulting from the global pandemic is a perfect storm which is hitting the economy hard.
Venture Capital funding for SaaS Companies is expected to drop in Q1 2022 by more than 20%. Being cash flow positive and driving organic growth is critical for Software companies who may have been banking on raising additional capital through subsequent rounds of funding. Cash is king.
Geopolitical turmoil and inflation mean consumers and businesses alike look to cut costs and reduce budgets, a core focus as their costs spiral. Do they really get full value out of all the Software and SaaS licenses they have? Can they reduce their spending?
Can you pivot your pricing and packaging quickly enough?
Most software companies can’t adapt quickly enough. While they can imagine new tiers and offerings, when it comes to delivering them, their time-to-market is dangerously slow. This is especially true in the accelerated timeframes of a recession.
What holds this process back? The #1 reason for not releasing new plans to the market is waiting on engineering. By decoupling the go-to-market of these new offerings from the typical engineering cycles required, new pricing and packaging can be delivered far faster - as well as seeing which offerings are getting traction and which are not.
So how can you break from this dependency and become much far more agile? With a robust Software Licensing platform, the creation of new plans, the feature sets in them, the business models that surround them - all can be launched rapidly and with far fewer resources and dependencies. It becomes a product management task not an engineering one, so launch can be super quick rather than glacial.
Why not grab yourself a Datasheet now, and learn about the leading Software Licensing Platform.
Why do you need these new offerings?
Turbulent economic times mean you can’t rely alone on new product releases to bring new revenue. That cycle is too slow. Selling what you already have, your existing IP, in different ways, in ways that customers want to buy - is essential. Doing this can be fast and agile, but only if you adopt the right infrastructure.
Leveraging your installed base - the key to success?
Maximizing the lifetime value of your installed customer base is key to surviving and thriving in these conditions. You need to avoid churn at all costs and identify value-based upsell and cross sell opportunities (as every sales leader knows, it is far easier to generate new revenues from existing customers than to acquire brand new customers).
By being able to see how your customers are using your products today, as well as packaging and pricing your IP in all the ways your customers would like to buy (subscription, consumption/usage-based, named user, token-based, etc.) you’ll be able to respond far more quickly to changing markets.
Now is also the time to remember to be kind to your customers, to help them where you can, and licensing flexibility helps you do exactly that. Dynamically changing what a customer has the right to use is easy with the correct choice of Software Licensing. This can all be driven via your CRM, such as Salesforce, Dynamics, Hubspot, etc.
Customers that you help will remember and appreciate that flexibility. Custom deals. Short term agreements. Flexing a customer’s entitlements. Helping them see out the recession - all of this will drive customer satisfaction and loyalty and help you thrive too.
How are your competitors responding to the market?
What about your competition? What do they offer, at what price points? Which of them also have the desired feature set and are viable alternatives?
This is not a time to be finding out your competition has much more flexibility than you have in how they can sell their equivalent product. In fact, it is you that needs to have the flexibility, so you can gain market share from them.
Customers may look to migrate to cheaper or more competitive alternatives. Have you got the business models, pricing and packing in place that you have been talking about internally? Are you offering those plans and licensing models that your customers demand?
If not, it is not too late, you can adopt a more flexible licensing approach faster than you’d think.
Don’t just survive - thrive!
All of the great companies have been born from the adversity of recessions. Take advantage of this environment to transform your company into an agile one - one that can price, package and sell in any and all the ways your customers wish to buy - both now and into the future.
Become a Go-To-Market Ninja! Get a Demo of our Software Licensing Platform and talk to our monetization experts to see how we can help you to not only ride out the storm, but thrive - taking your organization to a whole new level and making your competition wonder how they were left in the dust.