SaaS and subscriptions businesses have seen fantastic growth over the past couple of years. A considerable number of companies moved to the digital landscape, and a transition to SaaS brought some predictability in terms of revenue. This year, subscription eCommerce sales reached $26.67 billion in the United States, and the number of sales will further grow to $38.2 billion by the year 2023.
As powerful as 2021 was in terms of propelling SaaS businesses, we cannot help but ask ourselves what 2022 has in store in terms of trends, opportunities, and best practices.
To find out, we decided to ask some of our favorite SaaS and Subscription experts to share some trends, predictions, learnings, and growth opportunities to help businesses set goals and a game plan for the years to come.
Read on to discover actionable tips and learn more about inbound marketing strategies, subscription growth drivers, how to build a great onboarding and customer experience, better customizations, and more 2022 SaaS and subscription trends.
Focus on Improving Your Subscription Growth Drivers
No two SaaS businesses are perfectly identical therefore each requires its own individual approach. In fact, each business and growth model is unique, from acquisition strategies and offers to retention and customer success. Robert Skrob defines four subscription growth drivers that all businesses should focus on to achieve stable growth in 2022:
“While consumer demand will remain strong in 2022, subscription leaders who focus on improving their four Subscription Growth Drivers of offer, pricing, retention, and lifetime value will experience exponential growth while most subscription businesses reach growth ceilings.”
Robert Skrob, President of Membership Services, Inc.
Time to Offer a Simple Onboarding Framework
Now more than ever, user onboarding represents a significant differentiator in a company’s success. However, customer expectations have shifted in recent years with the onset of the new digital normal, so SaaS companies need to understand engagement and buying habits even more today than before. As clients’ patience grows thin, it’s important for businesses to provide an easy-to-digest website, fewer choices to avoid analysis-paralysis, and a seamless onboarding experience.
“Make it even easier for customers to choose your product by expanding the website, offering helpful content, and creating a kick-ass sign-up or onboarding experience. The pandemic has also introduced a new level of decision fatigue. Consumers — whether B2B or B2C — were always spoiled for choice even well before the pandemic. But with the very real threat of burnout and just straight-up anxiety and depression, the decision fatigue consumers feel means that subscription businesses need to make it even easier for their audiences to “discover” and “choose” their products. This means having a seamless website and sign-up experience, communicating clear value upfront, and making it easy for ideal paying customers to compare your product or service against the competitors.”
Asia Orangio, CEO and Founder at DemandMaven
A Significant Rise in Collaborations Between Companies and Creators
Another industry prediction for the new year concerns SaaS’ ever-expanding marketing channels, and how acquisition efforts can be boosted through collaborations between creators and companies. More and more niches will create long-term partnerships with creators, influencers, and affiliates, all of which will amplify their reach and build trust and credibility. This will also be a fantastic way to create new content, stand out from the crowd, and align with current trends.
“With big companies and brands reaching the ceiling of their current marketing channels and even seeing declining results in channels like Facebook due to attribution difficulties, we’ll see more and more company, plus creator collaborations […] Dev tool companies will collaborate with dev creators. SaaS companies will collaborate with SaaS influencers. Robotics companies will collaborate with robotics creators. Climate tech, note-taking, education, and so on and so forth. And these collaborations will continue to evolve into more creative structures, including affiliates, long-term sponsorships, profit-sharing, and even equity.”
Corey Haines, Founder at Swipe Files
Solve Customer Experience Issues Early On
We all know by now that customer experience is a crucial aspect of any business, whether it’s eCommerce, SaaS, or subscription. A proper customer experience plan should start with listening to users’ feedback and issues with a pro-active approach that keeps you one step ahead of user needs. Focusing on active listening and client feedback is a need-to-have tactic this year which can bring you targeted revenue growth and market visibility.
“Smart companies are investing in ways to listen to their customers and collect actionable feedback. They understand how critical it is to root out and solve customer experience issues before they become bigger systemic problems that can destroy your reputation and your bottom line.”
Gregory Roth, Head of Marketing at UniTel Voice
Building strong relationships with your customers comes with extra cost-effectiveness, by transforming current users into loyal customers rather than acquiring new ones. This tactic is especially lucrative as it also has the potential to turn loyal clients into brand ambassadors, who can further help your business by referring your products or service to their acquaintances or leaving positive feedback on review websites.
Have Crisp Positioning and Messaging
Another aspect to consider in 2022 is whether your brand’s positioning and messaging are optimized for retention.
Buyers, particularly B2B ones, are beginning to understand how SaaS and Subscription business models work, and they know they can always switch between products or services. Now more than ever, buyers have the flexibility to cancel one plan in favor of another, so your core positioning should clearly spell out that you are a partner for the long term, with a clear emphasis on what makes it you the best choice.
“SaaS companies are going to see that churn goes up over the next year. To counter that, SaaS marketing teams should focus on positioning and messaging.”
Marc Thomas, Head of Growth at Powered by Search
Make sure you establish differentiated positioning and create clear messages that will let your customers know how your products or services solve their pain points. This will help you attract good-fit customers that will eventually turn into loyal customers for the long haul.
Rising Need for Hyper-Customization and Hyper-Integration in SaaS
An exciting upcoming trend that the next year will bring in SaaS is the alignment of new launches and rebranding projects with consumers’ rising needs for hyper-customization and hyper-integration.
Given the growing number of SaaS companies that have entered the market, the competition has inevitably grown in the space. To stay relevant in this competitive market, SaaS businesses have started to create more specific and more flexible products, which are often run by very small teams or even a single person. These shifts will lead to the emergence of “micro-SaaS” companies that aim to solve one specific problem and do that very well.
“We will see more companies solving niche problems for niche markets. Another shift we’ll see is SaaS is hyper-integration. This will be an increased focus on developing better APIs, allowing products to work seamlessly together without the need for complex workarounds.”
Aaron Krall, Founder of SaaS Visionaries
Closely Monitor Any New Tax Regulations
As we have previously mentioned throughout this article, the SaaS and Subscription landscape is an ever-growing and changing market. That also implies that the global tax landscape is rapidly shifting.
“Many countries have already implemented or plan to implement certain direct and indirect tax rules in order to tackle this part of the business as well. Also, a deal was reached at a global level in order to implement new rules that will ensure a fair and appropriate taxation of the digital world. SaaS and Subscription businesses should keep an eye open for any new developments concerning the taxation of their global sales, as things are evolving quickly.”
Robert Ionescu, Tax Manager EMEA at 2Checkout (now Verifone)
Not only do different countries have distinct financial regulations – but they also have completely different tax codes and restrictions for online businesses. As these tax rules are constantly evolving and changing, a truly nimble commerce player will stay on top of new taxation updates to ensure full compliance and hassle-free shopping for any customer, regardless of geography.
Customer Attribution Will Be Limited
In the following years, attribution will be less about understanding where each customer came from. Instead, SaaS and Subscription businesses will need to find out where the highest-value customers come from. This will help you figure out your target audience and their background, how to acquire them, and, ultimately, it will help you build a strong customer retention strategy in order to boost your revenue.
“Those who leverage the limited data available to understand where to scale, then zoom out to look at overall payback and Lifetime Value to Customer Acquisition Cost numbers, will be able to accelerate their acquisition efforts.”
Jeff Snyder, Partner and President at Elumynt
In the end, attribution of new customers is one of the most important aspects of any business, but once you find out where your highest-value customers come from, you will be able to accurately invest more cost-effectively in your acquisition channels, which will help you improve your revenue.
SaaS and Subscription businesses are poised for continuous growth in global markets, and now is the right time to start strategizing for a profitable 2022. Follow these expert-validated subscription trends and developments next year and let them guide you towards growth.
Want to get even more SaaS & subscription growth opportunities and trends? Read our full eBook to hear what other experts are predicting for 2022 and beyond!