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3 Step Framework to Workout Your SaaS Competitive Advantage
SaaS Selling

3 Step Framework to Workout Your SaaS Competitive Advantage

3 Step Framework to Workout Your SaaS Competitive Advantage
Team SaaSPay
Team SaaSPay
Few days back

You may have an awesome SaaS tool that your users love. But these users have nine other options to choose from, and you’re in a space with cut-throat competition. This competition is often due to:

• A long sales cycle

• Lower sales volumes

• Reduced profitability

Even if you come up with a novel SaaS idea, build a business around it and establish yourself as a business leader, copy-cats will come flocking and launch identical products in the market. As a SaaS Seller, how do you create an edge over other players in your industry and ensure growth?


You do it by creating a competitive advantage - an attribute that allows your company to outperform your competitors.

Once you’ve established this, your product automatically stands out from the competition, helping you command a better price, and faster sales conversions, therefore, resulting in higher profits.

Let’s understand how you can develop and maintain competitive advantages for your SaaS.

But before you establish that, you need to be clear on a couple of things about your product, such as:

Your value proposition - what is it that you’re offering to your users which solves their problem?

Your target market - who is your typical customer?

Who are your competitors, and what do they offer to that target market?

To build a competitive advantage, you as a SaaS seller must be able to identify your product’s value proposition that will be sought after by the target market, which competitors cannot replace.

You can build this in through a 3-step process:

Step 1- Product Differentiation

Step 2 - Customer Relationship Management

Step 3- Cost Leadership

Let’s explore this one by one.

Step 1: Product Differentiation

A great way to be different from the competition is to have a unique product offering. It need not be a completely new product - it can just be a different feature in the same product. For SaaS tools, some product differentiators could be:

• A better, cleaner, easier-to-use user interface

• Faster speed

• A technologically light-weight product

• A product with plug-and-play modules not offered by competitors

and so on.

The idea is that your product should have features that customers want, which other products in the market do not have. Think about the features that your consumer wants but are not offered by any competitor, and create your differentiation.

Step 2: Customer Relationship Management

A CRM strategy can really set your business apart from the competition. With a good CRM strategy, you’re more likely to increase customer loyalty for your product, thereby increasing the chances of renewals and upselling of other products and services

For example, you could have a 24-hour helpline for customers where they can reach out in case they have any trouble using your product.

Loyalty offerings in your product could be another competitive advantage for your SaaS, which not just adds a product differentiator, but also a better customer experience, giving your users the best of both worlds.

Step 3: Cost Leadership

Having a low price is a huge benefit for any SaaS seller. After all, most companies use SaaS to save costs, so they’re more likely to go for a product that has a lower price.

When a company becomes a low-cost leader it is likely to earn above-average profits. But keeping a low cost is easier said than done. Here’s why:

Software, as a product or service, has a very high initial cost of development. While the cost of maintenance is relatively lower, recovering the high development cost itself takes time. In this case, one way of achieving cost leadership is by achieving economies of scale. This means that you should have a large number of buyers to give you high revenues. You can then reduce your profit margin per subscription and pass that on to the customer, in turn providing your product at a low cost.

But to get a large number of buyers, you will need cost leadership. And to achieve cost leadership, you need a large number of buyers.

That’s a vicious cycle.

Well, here’s the thing - Customers aren’t necessarily looking for a cheaper product. As sales expert Lawrence Steinmetz points out in his book, most customers understand that buying from a cheap competitor will lead to “intolerable” problems.

Customers are, therefore, looking for a product that provides maximum value. The problem they have is not with the price but with their cash flows and spending capacity.

And that’s where you could use SaaSpay's payment flexibility to help your customer buy your software with added convenience.


With SaaSPay you, the seller, get paid for the annual subscription value as you would anyway, but the buyer gets to break this upfront payment into convenient chunks. As soon as this is done, the buyer can use the tool, and repay the amount a lot later, depending on their agreement. This way, the buyer gets to ‘pay later for a yearly subscription, but you, the seller get the money upfront, keeping you cash-rich. SaaSPay can help you command cost leadership in your industry, without you having to cut profit margins.

In The End

Whether it's product differentiation, CRM, or cost leadership - as a SaaS seller, if you’re able to maintain your competitive advantage, it pulls you away from the noise and makes your business stand out.

A BNPL like SaaSPay, placed at your POS can improve your customer experience, enable cost leadership without discounting, and thus help you sell more annual subscriptions.

At SaaSPay, we provide pay-later and multicurrency payout options to our customers. So if you’re keen on exploring that can give you a competitive advantage, feel free to reach out to us!

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