Tech Innovation

From Software Solutions To Actual Outcomes: Expanding Your Value Proposition

How an emerging business model is making SaaS look as dated as a CD-ROM.
Stefan Kalb by Stefan Kalb

If you have a software-as-a-service (SaaS) product that does something amazing, that amazing thing is only possible if your customer uses your software effectively. You do your best to guarantee this with top-notch onboarding and technical support to boost adherence to the best practices you know will drive results. Despite these efforts, the efficacy of your solution performing at its peak ultimately rests on your end user’s behavior.

I’ve found that a results-as-a-service (RaaS) model picks up where the SaaS value proposition leaves off. The name isn’t as catchy, but the premise is: Simplify your customers’ lives by managing integrated technology and data-based solutions for them to ensure you’re able to deliver the valuable business outcomes they actually want. Think of RaaS as another evolution of the shifting strategy of pricing in tech. We’ve all seen instances where fixed software licenses become monthly subscriptions, then pivot to freemium. RaaS offers another way to differentiate your solution from the competition—this time by reducing the variability in results your customers achieve.

I know this is true because I’m a SaaS-to-RaaS convert myself. My company is a RaaS provider with the goal of helping the grocery industry increase sales and reduce food waste. A few years ago, we were trying to do the same thing with a SaaS offering. In typical SaaS fashion, we provided incredibly insightful raw data, robust software and training and collateral for customers on how to use our tools. Then we turned them loose to cost-effectively reduce food waste with inventory planning that had pinpoint accuracy, just like we had always envisioned.

That didn’t exactly happen—or, at least, not consistently enough. Once the software was in place, we continued providing support, but the outcome was now in the hands of those end users: some well-trained, some not. It became clear that there was too much execution left to chance and way too much value being left on the table.

Our initial heartburn turned into a heart-to-heart with my co-founder about our path forward, which culminated in the pivot to our current RaaS business model. It was a radical, nail-biting move for us at the time, but the evidence was clear that it was the catalyst we needed to grow and change the game for our customers in an entirely new way. The shift paved the way for us to truly pursue our mission of helping our customers maximize their returns while minimizing food waste.

Making this change can take any number of shapes. In our business, we take the task of grocery ordering off a retailer’s plate and eliminate their inventory risk by buying back any items we order that don’t sell. That meant cutting out fixed fees and software licenses and overhauling our pricing model to one that is purely performance-based.

Suppose you operate a media agency. Could you consider layering in a solution with a performance-based pricing model linked to results that your customers care about? Examine ways to make your success intrinsically linked to your customers. In doing so, you create a showstopping value proposition that outshines the competition.

If you have a SaaS solution and are considering becoming a RaaS provider, here are a few considerations from our experience in the retail grocery industry that can help you stomach the switch.

Sidestep The Limitations Of Software

Sadly, your customers are not likely using your tech exactly the way you wish they would. (And they could probably achieve higher impact results if they were!) It’s up to someone else’s learning curve and moment-to-moment bandwidth to capitalize on everything you’ve engineered your solution to do. Under those conditions, it’s logical that the results achieved would vary widely.

Now consider that your software is likely one of a dozen or more that your end user interacts with every day. Mastering the finer points of your tool may simply not be their priority. RaaS solves for that by making it yours—and who better to do the job?

Human bias introduces another challenge to SaaS efficacy, one that is especially difficult to overcome because bias is inherently stealthy. A RaaS model takes both the potential for error and the inevitability of bias out of the customer’s hands, arming them instead with an expert partner (you) dedicated to delivering the outcomes they value.

Match Your Talent To Your Tech

Taking end-to-end accountability for your customer’s outcome isn’t without risk and may require making a few additions to your existing team. As a RaaS provider, it’s not just your reputation or repeat business at stake; the quality of your modeling and analysis to achieve business results also has a direct financial impact on your bottom line. The same kind of costly error that could be generated by a customer using your SaaS offering now falls to you, the RaaS provider, to take responsibility for.

Powerful technology paired with the right people can help mitigate this risk. Does your team have the necessary combination of skill sets and expertise to process and manage big data? Consider bringing on data scientists or even actuaries that specialize in predictive analytics to minimize your own business risk as you eliminate it for your business-to-business customers.

Define A Value Prop Few Can Touch

Competition for customers is only heating up, and you don’t need me to tell you that SaaS solutions abound in the marketplace. Consider this as a value proposition: We win when you win. Provocative, right? When you’re incentivized to actually solve your customer’s problem (versus providing a tool that’s a step toward solving it) you graduate from a discrete, transactional relationship with your customers and form a true, mutually beneficial partnership. Your success becomes intrinsically linked to theirs.

The bottom line is that optimizing exceptional software through SaaS requires end users to effectively manage it. As we’ve all experienced, sometimes they do and sometimes they don’t. The RaaS business model eliminates that risk by taking ownership of the outcome, incentivizes continuous improvement of your core offering and helps your business create a sticky, standout message in the marketplace.

This article originally appeared on Forbes.

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