How is SaaS Software Distribution Done?

As a SaaS entrepreneur, you must be aware that distributing your software is necessary to achieve success. But with several diverse distribution channels accessible, it can be challenging to know where to begin from. This blog post will offer details related to your SaaS software distribution besides providing some insights and data to aid you in choosing the right channels for your business.

According to Fuzen, the software as a service (SaaS) market was predicted to be valued at about 197 billion US dollars back in 2023 and 232 billion US dollars by the year 2024. However, according to a recent McKinsey & Company report, technology industry analysts have forecasted further growth in the SaaS market with anticipation of experiencing the SaaS products market reaching nearly $200 billion in the present year (2024).

Source: fuzen

What is software as a service (SaaS) distribution?

Software as a service (SaaS) refers to a software distribution model in which a cloud supplier congregates applications and makes them approachable to end users over the internet. In the SaaS model, an independent software vendor (ISV) might contract a third-party cloud provider for application hosting. Or, with huge enterprises, such as Microsoft, the cloud provider can also act as a software vendor.

SaaS is from one of three main types of cloud computing, besides infrastructure as a service (IaaS) and platform as a service (PaaS). A number of IT professionals, business users and personal users utilize SaaS applications. However, the products range from personal entertainment, i.e. Netflix, to progressive IT tools. In contrast to IaaS and PaaS, SaaS products are habitually promoted to both B2B and B2C users.

Importance of distributing your SaaS software

Effective distribution of your SaaS software is significant for numerous reasons:

• Reach a wide-ranging audience and create more leads.
• Transforming more leads into paying customers.
• Upturn sales and grow your business.
• From a strong customer base.
• Enhance your brand awareness and reputation.

What are SaaS distribution channels?

SaaS distribution channels refer to numerous paths that your software product takes to stretch towards your end-users. These channels can be roughly characterized into two types: direct and indirect. In a direct SaaS distribution model, the software vendor sells products directly to customers, often via their website, getting them using marketing and networking strategies. However, an indirect SaaS distribution model encompasses product distribution through third-party resellers.

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How is SaaS software distributed over direct channels?

SaaS software distribution through direct channels indicates a direct engagement with the vendors and the customers, sidestepping any intermediaries. This model is catalyzed by numerous practices, each incorporating unique strategies to range, involve, and transform potential users into loyal customers. The core of direct SaaS distribution channels deceits in their ability to counterfeit a direct link with the audience, providing a visible and unmediated avenue to showcase, sell, and support the software contribution. This segment accurately divides the complexities of various direct distribution channels, pouring light on their operational manners and the strategic precautions needed to leverage them successfully.

Inbound Marketing

Inbound marketing for SaaS startups refers to a concept focusing on enticing visions to your company, pleasing them with your content, and appreciating them not only with a good product but also exceptional materials wrapping the topic of your expertise.

For instance, Ahrefs, according to Internet resources, a well-known SEO toolset, has reached $50 million ARR with only 50 employees, out of which 10 were marketers, and none were salespeople. It has established over 65% growth year-over-year by leveraging inbound marketing techniques, i.e., email marketing and SEO-oriented content, offering free tools to accomplish substantial growth. However, the content in your SaaS marketing channels can take several forms intended to be instructive, pleasurable, and welcomed, including:

Blogs – a platform for distributing insightful expertise and industry know-how, developing a trust-building dialogue with potential customers,

Social media posts – custom snippets of value, conspire, and commitment that provoke interest and raise a community around your brand’s beliefs,

Downloadable materials – a reservoir of reachable insights and useful tools, compressed in downloadable resources extending value past the first interaction,

Online events – interactive forums like free webinars and product academy courses, providing a deep plunge into your product’s usability and industry significance while encouraging a learning community.

A good inbound marketing strategy, deliberated as one of the most effective SaaS distribution channels, not only forms a strong brand but also creates an evocative connection with the audience, refining interest and supporting sound, product-led growth for SaaS companies.

Outbound outreach

Outbound marketing is an attempt to reach the customers where they presently are instead of attracting them. It comprises strategies for the following B2B SaaS marketing channels:

Cold email – a directed outreach strategy allowing rapid audience engagement with assessable metrics over customer interaction and conversion.

Cold call – a traditional yet compelling approach towards direct communication, developing a personal association while evaluating instant customer response.

Display advertising – visual storytelling united with targeted messaging, located across digital landscapes for capturing attention and provoking inquisitiveness (Facebook Ads, Google Ads, TikTok Ads, etc.).

Live event marketing – live engagements that adopt a new brand experience, providing a platform for personal interaction and live product demonstrations.

Traditional printed materials and ads are perceptible touchpoints of brand messaging, providing a standard yet impactful brand recall and information distribution.

While retaining a balanced fusion of outbound marketing strategies can meaningfully extend your reach, utilizing outbound marketing to reach new SaaS distribution channels can be expensive and rigid to measure.

Events and Meetups

Events and local meetups are an effective way to counterfeit real-world connections and networks while showcasing your SaaS product. Some of the top conferences and events that can become your Saas distribution channels encompass:

Gartner Tech Growth & Innovation Conference – This conference’s last edition took place on June 14 – 15, 2023, in San Diego, CA and covered new trends, strategies, and inventive technologies required to optimize sales and marketing efforts.

INBOUND 2023 – The annual event planned by HubSpot greets 11,000 business leaders, providing a great SaaS distribution channel along with a remarkable networking experience.

TechCrunch Disrupt – the conference took place on September 19-21, 2023, and proposes not only top industry speeches and discussions, but also Startup Battlefield where 20 particular startups have a chance to terrain their companies.

Mind The Product – conferences in San Francisco (June 14, 2023) and London (October 20, 2023) with attendees from all over the globe joined by populations in person and online.

Appealing in events and meetups not only intensifies transparency but also lays the groundwork for continuing professional relationships, figuring a niche for your SaaS product, creating possibilities to display your offerings on a stage resonating with invention, and developing a channel for growth and transparency in the competitive marketplace.

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Paid Advertising

Paid advertising is one of the successful ways to reach your target audience and create your SaaS leads. The cost of placing paid ads for global spread varies hugely depending on:

The platform – diverse platforms like Facebook Ads, Google Ads, and LinkedIn Ads offer diverse demographics and targeting competencies, ensuring your ad influences the most relevant audience,

Keyword competitiveness – selecting the right keywords is necessary as highly competitive keywords can boost the cost yet possibly attract a higher volume of quality leads,

Targeting settings – fine-tuning your targeting settings agrees for more accurate audience reach, ensuring your ad is perceived by those most probably to convert.

The diverse costs encompass a good budget plan requirements for striking a balance between what you spend and what you can earn back. Since paid advertising costs have been increasing and there is no certain way of reaching your target audience, it is wiser to set apart a budget and begin with a smaller campaign to see how it works before determining to go big.

Networking

Networking opportunities for SaaS administrators flourished within a plethora of settings, some conservative and others a bit unexpected, surrounding both digital and physical worlds. The paths for meaningful networks extend beyond the traditional restrictions of conferences and meetups to the virtual passages of online forums and vibrant communities. For example, appealing in robust considerations related to platforms like the world’s major Slack community for product fanatics curated by Mind the Product can open gates to a wealth of knowledge and potential associations. These engaging platforms are great for switching ideas, getting advice, and building connections with both similar-minded individuals and potential customers.

Also, having a strong online presence can hold the eye of investors who are always seeking novel and auspicious SaaS projects. The evolving networking scene reflects the thriving SaaS market, which is now ascending at an impressive 18% annually, according to internet resources. With each passing year, the networking sphere becomes more extensive and extensive, imitating the dynamic and prospering nature of the SaaS industry while becoming one of the natural SaaS distribution channels. This rising spiral not only expands the networking image but also augments the SaaS community, promoting an encouraging ecosystem for shared learning, growth, and success.

SaaS software distribution benefits

There are two types of benefits:-

Business Advantages

Companies are not required to maintain their IT infrastructure as the software is hosted over a remote server.

It lets companies exploit or diminish their usage as required, making it a cost-effective solution for businesses of all sizes.

Security Advantages

SaaS software is hosted over a remote server and is thus secured from malevolent attacks and viruses.

The software is often updated with the latest bits to keep it up-to-date and protected.

Which Distribution Channel Is Best for a SaaS Company?

There is no optimal distribution channel for all SaaS companies under every circumstance. Therefore, it is more useful to think about distribution channel selection as a best-fit decision rather than thinking about the best distribution channel. Which distribution channel best fits our situation?

Two aspects drive this verdict:

• Economics
• Strategy

Economics

If you sell a mobile app on a, for instance, $10 per year subscription fee, you purely cannot afford quota-carrying sales reps roaming in the field and meeting with potentials.

Likewise, if your SaaS offering needs a lot of technical integrations before a Fortune 500 customer can utilize it, and your smallest annual contract value is $1 million a year, there’s no way you’re vending that via eCommerce and inquiring customers to snap their shopping cart and check out.

Strategy

Do you want to utilize the distribution channel everyone else is using because you know it works? If so, that’s surely one valid point of reasoning, and it’s often valuable.

Otherwise, do you want to zig when everyone else zags while using a distribution channel that others do not?

For instance, a classic interchange with distribution channels is when a company has both direct and indirect channels. Your partners don’t always like contending with your salespeople, which is known as channel conflict, and it is considered an issue.

In some businesses, one valid distribution strategy is present to focus only on indirect sales channels while working with partners. The partnership presentation goes something like this: “We are the only partner-friendly company in the space with no direct sales force. We only flourish by aiding you to succeed. Why would you want to give money to a company that’s attempting to strive with you via their direct sales force?” That’s a logical option.

Another option would be to mark the market’s low end. Go with a low-price, highly automated, self-service, eCommerce-based strategy for distribution. Equally, you can go the opposite way. You can start by focusing on the market’s higher end while offering a feature-rich contribution and price it two to three times the price of the competitor, besides assigning a salesperson, an account manager, and a customer success representative to the new accounts. In this case, your offered solution is supportively more expensive and worthy of someone staking their career on you.

Takeaways

In a nutshell, choosing the right distribution channel for your SaaS product can offer innumerable advantages, comprising improved transparency, maximized sales, more effective customer targeting, and enhanced customer support. It’s also about finding the best fit for your product and target audience, which is considered a strategic decision that can considerably impact your SaaS business’s progress. Therefore, connect with Progatix if you are looking to convert towards an on-demand cloud computing SaaS platform or custom software development.

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Amna Shahid

Author

Amna Shahid, a technical content writer, is an expert in simplifying intricate notions and composing captivating narratives to participate and convey technical information efficiently. With a devotion to brilliance in this dynamic technical writing field, Amna is open to collaborating and new possibilities in this succeeding tech realm.

Progatix

Reviewed By

Progatix, a well-known software development company, has been delivering innovative digital consultancy services & custom software solutions encouraging business growth since 2003. Our remarkable solutions involve strategic digital consultancy, legacy system migration, DevOps, and stellar testing services.