Search
  • Houman Asefi

How COVID-19 Affected SaaS

Most SaaS companies spoke to expectations of a drop in sales, but could not quantify the potential losses given the constantly evolving situation in the larger market. Some large SaaS companies have already started offering free one-month access to customers who close their accounts for lost days. If you see many of your customers suffer revenue losses, especially in the travel and hospitality industries, you will see an increase in customer support, including chat and cloud telephony, "Krishna Srinivasan, co-founder of Chennai-born Freshworks, told Techcircle in an email. [Sources: 0]




Because of the recurring and predictable nature of their revenues, these companies are even better positioned, according to the employees of the SaaS companies. Our income model is based on monthly recurring income and pension payments. [Sources: 0, 4]

Despite all the benefits for SaaS founders, you will want to keep an eye on costs, liquidity, and cash flow. [Sources: 4]

Most accounting systems have a report you can create called Accounts Receivable Aging. In the spirit of these difficult times, we offer a guide to managing them, from balance sheets to cash flow. [Sources: 4]

For most SaaS companies, the economic crisis has led to slow growth and higher downward rates. The subprime crisis and subsequent recession hit the economy and businesses more broadly harder than expected, hitting companies that were in the process of scaling back. Although all companies are affected by unfavorable market scenarios, a SaaS company is much better placed to weather the storm if the existing customer base can be maintained. [Sources: 6]

To survive the crisis and keep users, SaaS companies need to respond to the new customer landscape and adapt, adapt their business model and respond to new business models and customer needs to survive this crisis. Customer loyalty requires intentionality and proactive initiatives from the SAAS business to ensure continuous customer loyalty and satisfaction. [Sources: 1, 6]

The right response, however, is to empathize with the users of your brand and respond to their needs. For the SaaS companies mentioned above, brands will enable them to find ways to selflessly support customers, respond to users "needs, and use exclusive data to create unique content by empathy and support customers in times of need. [Sources: 1]

The Forbes Technology Council, which with over 1,000 members is the largest and most influential technology advisory board for companies and technology companies in the world. [Sources: 1]

Overall, the COVID-19 Subscription Impact Report found that 53.3% of companies did not experience a significant increase in their subscriber acquisition rate. Tien Tzuo, founder and CEO of Zuora, who wrote the "COVID Edition," thinks the subscription business has proven resilient. TechRepublic has compiled a list of canceled conferences and the impact of the pandemic on the tech industry. [Sources: 5]

Meanwhile, 22.5% of companies have seen their subscription growth rate accelerate, 12.8% of companies see growth slowing, but they are still growing, and the remaining 11.4% companies are seeing subscriber migration exceed their acquisition rate. Investors also take into account the resilience of SaaS companies in making investment decisions. Along with the disappointing performance of the 2019 IPOs, some investors have focused on companies that are profitable and have a clear path to profitability. The proposed framework is designed to provide a structured way to achieve this. [Sources: 2, 5]

However, there are fundamental shifts in value that continue to offer attractive risks - adjusted returns for investors in the public SaaS universe. The assessments have been reset in line with the perceived market resilience and growth potential for 2018 and 2019. [Sources: 2]

SaaS companies like Zoho Corp are seeing strong demand for their productivity-boosting products like the company's productivity management platform. Freshworks, for example, is seeing an increasing demand from companies for its product, which enables companies to serve their customers remotely via chat and call routing. These new channel demand openings are a positive sign for SaaS startups facing difficult times. [Sources: 3]

Critical business data is at risk from potential security threats, and we will report in advance on how leading SaaS brands are responding to their customer communities with effective support. [Sources: 1, 3]

The team at WordStream, an online ad software company, has teamed up to update our benchmarks for the Google ad industry to reflect emerging trends and changes. For years, we have used data from over 1,000 Word Stream clients in the US to report on how COVID-19 affects PPC costs in 21 different industries. [Sources: 1]

This information is a game - nothing changes for advertisers who want to protect budgets and maximize spending. We expect this to preemptively cost the base and that companies will shift from aggressive growth to profitability by reducing cash burns. As you can imagine, some will have difficulties in the first months of the year, while others will be visible in the second quarter. [Sources: 1, 2]

Liquidity will be a decisive factor that will have to be assessed at a separate point, but not as important as the impact of COVID-19. [Sources: 2]






Sources:

[0]: https://www.techcircle.in/2020/04/01/covid-19-crisis-spells-medium-term-pain-for-homegrown-saas-firms-as-us-market-comes-to-a-standstill/

[1]: https://www.forbes.com/sites/forbestechcouncil/2020/07/02/saas-brands-responding-to-covid-19-critical-steps-to-take-right-now/

[2]: https://medium.com/@cmodi/a-framework-to-assess-covid-19-impact-on-the-saas-universe-16d96f4be42a

[3]: https://www.livemint.com/industry/infotech/covid-19-impact-software-startups-see-rise-in-demand-but-expect-revenue-decline-11586259345688.html

[4]: https://www.alpinesg.com/blog/saas-cfo-survival-guide-managing-financial-impact-of-covid-19/

[5]: https://www.zdnet.com/article/the-impact-of-covid-19-on-the-subscription-economy/

[6]: https://blume.vc/davids-vs-covid-5-managing-saas-businesses-during-covid-19/



1 view
  • White LinkedIn Icon
  • White Twitter Icon

©2020 by Houman Asefi. 

Sydney, Australia