Japan loves SaaS, but american SMBs are still unsure. Here’s how to change that.
Two decades ago, when having dial-up internet at home was still a luxury and many businesses were just beginning to understand the value of technology in the workplace, Marc Benioff, the founder of Salesforce, unveiled a strange marketing scheme for the fledgling company: the word “Software” with a big red slash through the middle and the slogan “No Software.”
It was an odd move, since Salesforce is, of course, a software company, but a smart one, because most businesses were wary of the expense of new software at the time, according to Entrepreneur:
Back then, using software for your business meant spending a small fortune on computer hardware, including PCs and servers, and on software licenses and maintenance fees. Everything had to be set up on premise, which meant hiring a team of IT professionals or using a managed service. Only companies with sizeable IT budgets or big corporations could afford such in-house networks. For small businesses, these were luxuries that they would not even consider having.”Eyal Lifshitz in Entrepreneur
SaaS has changed all that by offering businesses the technology they need at a much lower cost than they’d pay to adopt new products and the teams to implement them on their own. However, many businesses still have the decades-old mindset that makes them hesitant to adopt newer, more effective services.
In America, many businesses still don’t see the potential of SaaS
According to a recent Gallup poll, 63% of small business owners believe they already have all the technology they need to stay competitive, while 62% say that the shift from owning hardware to paying for solutions online “doesn’t affect their business at all.”
On the surface, these numbers don’t seem like too big of a deal: small-to-medium businesses (SMBs) are happy with the technology they have. But the fact that many believe SaaS offers no solutions for solving their problems is actually an indicator of a startling lack of knowledge around the industry.
But that’s not the case in Japan
Forbes reports that Japan has one of the fastest growing markets for SaaS in the world:
Last year, the wider software market in Japan was valued at about $11 billion, and SaaS accounted for 31%, or $3.5 billion. By 2021, the software market is expected to reach $19 billion, and SaaS will top $6 billion, according to Fuji Keizai Group.”
And the reason for that? There just aren’t enough people to do the jobs SaaS can automate. Over the next 20 years or so, Japan is expected to lose about 2.3 million workers ages 15-64 from the workplace. SaaS provides automation for businesses faced with the prospect of much smaller teams.
SaaS makes technology available to businesses of all sizes
And the defining attribute of an SMB is that it’s, well, small. While many American SMB owners don’t see the need to switch to SaaS technologies, they’re actually missing out on solutions that would help make up for a lack of manpower. Some of the most effective SaaS products out there automate tasks that used to take up entire departments, like invoicing and even accounting. Incorporating AI technology into the marketing process can provide analytics that used to take months in a matter of minutes. And customer support options, like chatbots, can solve customer problems twenty-four hours a day with fewer employees to staff the function.
So with all this great technology out there, why aren’t 100% of businesses saying that the greater availability of SaaS solutions is set to have a positive impact on their business? Unlike Japan, where a shortage of workers means that businesses need solutions now, American customers might not see the immediate value of SaaS.
The challenge is giving customers exactly what they need
One of the biggest problems new SaaS customers face is understanding exactly how a product will work for them. According to Metasaas, as much as 31% of SaaS products are just sitting around unused. And that’s probably not because businesses didn’t want to use technology they’d adopted. More likely it’s because they simply didn’t know exactly how to make solutions work for their particular needs, much like the business owners who don’t yet understand how SaaS can work for them.
Showing customers solutions that are tailored to their business’s specific needs should be the center of not only the sales process, but also onboarding. In the SaaS world, where many of your customers may not even understand why they need new solutions, education is everything. Winning new customers sometimes starts with showing audiences there’s a better way!