Data optimists are crucial to SaaS success now

As a SaaS vendor or developer, are you a pessimist or an optimist when it comes to the data you hold?

The pessimists focus on the challenges. Faced with the massive responsibility of being custodians of customer information, and seeing mountains of new data generated every day, they quite rightly worry about the cost, scalability, compliance and security of their systems.

These are essential considerations, ones that vendors can’t afford to get wrong. 

The optimists are mindful of these challenges too. But rather than simply seeing data as a risk, they’re also alive to its value. They see big opportunities in the big data they hold. That means using it internally to keep their teams on track, and externally to provide more value for users.

I work with SaaS vendors every day, and see how they regard the data they hold. I often detect a parallel between a firm’s attitude to data and their ability to adapt to the broader business challenges we all face today. Spoiler: the optimists are winning.

The most successful SaaS vendors are using data internally to promote agility and alignment with their key tasks. And externally, they’re using data to maximise the insight customers get from their products.

The internal benefits – agility, adaptability, alignment

Inflationary pressures and a tougher funding environment have undoubtedly made the world more challenging for SaaS vendors over the last year. Faced with rising costs and increasingly value-conscious users, they are being forced to focus on how effectively and efficiently they can win customers and keep them.

The days of growth at all costs are gone, and the metrics that matter have changed. Usage and user numbers used to be critical. Now, cost of acquisition and burn ratios are the ‘North Star’ metrics, as SaaS vendors seek to balance their books and show that growth can be sustainable.

While the pessimists hunker down and try to weather the storm, the optimists invest time and effort in adapting to this new reality.

Success in SaaS today relies on agility, adaptability and alignment (making sure everyone is pulling in the same direction). Optimistic SaaS companies are using data to give all their staff real-time visibility into how their performance impacts company progress. 

Giving staff that real-time insight in an easy, compelling way is now a crucial part of SaaS culture and communication. It’s especially important in today’s era of greater reliance on distributed hybrid teams.

The external benefits – customer value

When it comes to turning data into customer value, optimists are providing the real-time data insights users need to make better decisions. 

So – rather than seeing data purely as a set of storage, compliance and security challenges – they are bringing it to life for end-users, providing the insights they need.

SaaS providers report that embedded analytics increases the value of their apps by 43 percent (Eckerson). And by 2025, Gartner says that 60 percent of analytics activities will be initiated within SaaS applications.

Adding new analytical capabilities to deliver valuable insights can be an easy win on the innovation front. It is also part of a broader shift that we are seeing towards more pragmatic, iterative product development.

Some SaaS vendors (and this happens in other sectors too) see innovation as a series of giant, disruptive leaps, driven by headline-grabbing advances in technologies. 

While there is a place for that, to the outside world it can feel disruptive.

Vendors can also be guilty of chasing innovation pipedreams. That often means focusing on much-hyped but unproven technologies too early, and wasting significant time, effort and money on innovations that fail, or fail to gain traction.

The most successful SaaS companies today are aware of and open to exploring the opportunities that could come from exciting tools such as generative AI. But they are not being distracted by the next big thing.

Instead, they remain optimistic about the potential of their own products. They are pragmatically and relentlessly focused on improving them iteratively to meet customers’ real needs today. And that means bringing data to life, for their own teams and for end users.