Category: CRM

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Recession: Impact in Software as a Service(SaaS) 

Global uncertainties continue to dominate headlines. Inflation is expected to reach the highest levels of ~3.5% in the US and Europe by the end of 2023. To ease inflation, Central Banks need to dampen demand, by making it expensive (for financial institutions, businesses and households) to borrow by increasing Federal Reserve interest rates . We are expecting a federal rate hike of 4.75% – 5.0% by the end of 2023. These are all data showing we are heading toward recession. The US labor market was robust last quarter but this quarter it is not very promising. Everyday we are hearing layoff news from different sectors.

IMF inflation forecast

These inflation and layoff news are impacting our tech market. Many companies have a growth challenge: They expect to get as much as 50 percent of their revenue from new businesses and products by 2026 but are not on a path that will take them there. Current economic conditions are forcing high-growth yet unprofitable tech startups to tighten their financial belts.

There are few realities, software companies are facing for their growth.

US-based Venture capitalists backed software startups slowed down – VC are very clear of high valuation and demanding that companies spend less, improve profit margin and high output. Unicorn creation also slowed in 2022 Q4. This is one of the lowest quarterly count since the first quarter of 2020.

Depressed company valuations – Private company valuations are cooling down. Over the last 4 quarters, we have seen public valuations compressing.

 Software companies have three critical revenue streams.

  1. License / Subscription Revenue – When the customer pays for the right to own and use a copy of the software/hardware product or subscribe/access  software platform
  2. software or hardware product – Customer pays for ongoing support or premium support.
  3. Cloud based licensed software – Customer pays the software provider for specific deliverables such as software implementation or technical training.

In the current world all these 3 revenue streams are shrinking. Companies are using only essential services to run their business. This is directly impacting software revenue, which is leading these companies into low valuation.

Infrastructure Maintenance –  SaaS companies are providing the software as a service. This means the customer does not have to purchase hardware to run the software—that cost is transferred to the SaaS provider. This is implying continuous software running coast. This cost is not going anywhere.So due to inflation this SaaS running cost increases tremendously.

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APIs Integration with IOT and CRM improves Customer Service

APIs integration helping IOT and CRM to enable better customer experience

IOT (Internet of things) is revolutionizing our lives. As per Gartner report by 2025 IOT market will expand a 58-billion-dollar opportunity. It is affecting all parts of our life. In our pandemic era we found more use of IOT device to maintain social distancing.

IOT is also one of the main disruptive technologies in our businesses. It is affecting all business domain including healthcare, retail, automotive, security.

There are wide range of IOT benefits in business.

  • Enhanced productivity
  • Better customer experience
  • Cost-effectiveness

CRM system is keeping all your customer relationship like data, notes, metrics and more – in one place. CRM is helping small business to take off all burden from the IT management team by automating the business process. It is also helping employee to keep the focus on the critical business areas.

API is helping to integrate these two unrelated systems. APIs are enabling this system to optimize process and streamline whole business process. API is the main communication channel to build robust process and keeping real time update to these systems. APIs are allowing to build context-based application with IOT and CRM to interact with the physical world.

Now here are few areas where IOT is helping CRM system with help of APIs to optimize business process.

  1. Optimize customer service – Before your customer finds any error in your service/product you proactively acting on error and fixing those error. This will help to build relationship with customer.
  2. Increase sales – With help of IOT and CRM system you are finding untouched opportunity and using those opportunity to increase your sale.
  3. Personalize customer experience – You are analyzing data provided by IOT and CRM system and building user based predictive model to enable personalize experience to user.
  4. Customer retention – CRM provide customer data and relationship. IOT data providing customer behavior. This will help any business to personalize and target marketing for their customer.
  5. Omnichannel instore experience – IOT and CRM is helping business to enable 360 omnichannel customer experience. This process will help and suggest the products which the customer might purchase.

APIs  integration with IOT and CRM helping business to enable higher degree of personalization, target marketing, optimize price model, higher revenue and enhance customer satisfaction.