Software Development

Surefire Tips to Create Sticky SAAS Products and Lessons From Netflix

Surefire Tips to Create Sticky SAAS Products and Lessons From Netflix

SaaS isn't a new concept; in fact, it goes way back to the 1960s. Back when there were huge desktops, buying a SaaS product seemed unrealistic, like a dream. Only huge and successful companies bought SaaS products.

SaaS is short for Software as a Service.

SaaS is a software licensing and delivery service that you can directly access from the internet without downloading or installing on your device. It is based chiefly on a Subscription Model, wherein customers pay for it monthly or annually to receive its rewards. But with time, it integrated well with modern devices, and now most companies are capable enough to buy a SaaS product.

The customer data is stored in a data center called cloud technology. The best thing about SaaS products is that they do not need any specific device to operate them. As a result, it keeps on growing day by day. Thus, it shall become the need of the hour by the year 2023.  

SaaS Product

What Is a Sticky SAAS Product?

A sticky SaaS product is a product that tends to bring back customers again and again because of its quality, creativity, and attractive business model.

The sticky SaaS product runs on one and only one belief: “Contrary to popular belief, your work doesn’t end with people buying your products. It ends with people coming back again and again to stay associated with your products."

As a matter of fact, people who own startups of a SaaS products or any product make it their goal to acquire new customers. But that shouldn’t be the case because you need the customers to believe in you more than once. It should be your goal to make them believe in you for the rest of their lives. They should keep coming back to you again and again. In short, they should never leave.

A sticky SaaS product is like men in Jane Austen’s novel – the one that keeps you hooked to them because you cannot function without them. But how to create a sticky SaaS product? Well, below mentioned are a few ways to make your SaaS product sticky:

1.      Make It Personal

The software doesn't become sticky by adding lots of features to it. It becomes sticky when it is made with an understanding of its audience's requirements. When you know your users well enough, you can provide them with the solutions they are looking for, even if they are not looking for them. Stay close to your users to understand their needs and create software accordingly.

2.      Simplicity Is the Best Policy

Operating an application loaded with information, options, and features confuses the user. Everyone has been in such a situation at least once where there are many buttons. And more features do not mean more value. Value is in the content and user-friendly navigation.

3.      One-Stop Solution

If you know your user's workflow or have a basic idea about their SOP, then you can choose to design the software in such a manner that it solves their problem at every stage. If your user has to jump from application to application, your product is not worth it. And habits die hard, so once the user becomes habitual to your SaaS product, they won't switch.

4.      Easy Integration

No SaaS product works independently. An average company holding the capacity to buy a SaaS product has an average of 254 employees. Thus, according to Business Wire, the average company's individual SaaS products live and work with 253 other providers.

Hence, solid integration increases the stickiness of your SaaS product by adding additional pathways to and from the product. It will give your product more value and engagement opportunities. The users will be able to build workflows around your product and interact with your product consistently in various stages of bigger-picture processes. 

5.      Encourage Automation

A user doesn’t like the manual task of uploading the data repeatedly because they have hundreds of thousands of other things to take care of. Make the product sticky by repeatedly nullifying the need to do the same task and encouraging automation. Users would be happy if they didn't have to take care of a few things that are negligible and can be avoided.

Automation in SaaS

Taking a Leaf out of Netflix’s Book: One of the Best Examples of Sticky SAAS Products

When you type in a search engine – IS NETFLIX A SAAS PRODUCT? The immediate answer you shall receive will be YES.

Most people who breathe on this Earth know what NETFLIX is. But for those who do not know what Netflix is, it is a subscription-based streaming platform that provides online streaming of movies, web series, and television shows that streamed in the 80s and 90s. They also stream in-house manufactured original content.

Netflix - a sticky SaaS product

Founded by Reed Hastings and Marc Randolph in Scotts Valley, California, on August 29, 1997, they started by renting and selling DVDs. It is one of the SaaS business products based on a subscription model that has worked out well. Because it currently has over 182 million paid subscribers worldwide.

So what is it that makes Netflix a sticky SaaS product?

Well, the first thing is quality content. They produce content so extraordinary that a person is hooked. The term binge-watching might have been coined way before the origin of Netflix, but it was declared the word of the year by Collins dictionary in 2015 when more and more people started getting stuck on Netflix.

Netflix has a subscription-based Business Model, meaning its main revenue stream is the monthly fees of the users. Many analysts suggested that Netflix could enhance its revenue by using advertisements, but the streaming provider declined. Because they think that advertisement would lower the customer experience, which is its main value proposition.

Currently, Netflix offers three different plans of membership, which may be upgraded or downgraded at any time the user wants. They are:

Netflix Subscription Plan

All the plans can be cancelled anytime, and the cost of the plans changes according to the country, but they are usually affordable. Also, people hardly cancel subscriptions; if anything, they subscribe monthly, and some even go for yearly subscriptions because they see it as an investment rather than an expense.

Thus, here are the key takeaways for various companies from the sticky SaaS product – Netflix:

1.  Clear Mission and Vision

Netflix had only one mission – to entertain people. It wanted to give them the power to decide what to watch, how to watch it, and when to stop watching it. Whereas it did not want people to unsubscribe, it did not want to lock them in. It wanted people to choose it as their addiction on their own and withdraw from it whenever they choose to.

Mission and Vision

2.  Uncomplicated and Easy to Use

The Netflix website is straightforward and uncomplicated. It does not have too many complicated switches and buttons or search bars and keys that would confuse the customer as to where to find his favourite movie/show to watch. Also, it has language preferences and kids' areas which is creative and convenient for parents who want their kids to watch TV, but not too much and within a reasonable limit. Hence it has taken care of every kind of customer. This is one of the reasons it is popular in more than 190 countries, and its subscribers keep increasing every month, and the ones who have already subscribed to it have never left.

3.  Invest in High-Quality Content

Netflix has one of the best video content in the world. It provides the best user experience to its users because they have developed its recommendation engine. It powers the famous "You might also like" feature and helps them streamline their user experience across multiple devices. The subscribers have found value in whatever it has provided and will continue providing.

4.  Free Trial Period

If you can win the hearts of your users in the trial period, you do not have to worry about them staying loyal to you. The product's stickiness can be found in the first month or week.

Netflix knows that the first month is critical for getting users hooked on their product. They sign up for paid subscriptions after the trial ends. This is the time that matters. Hence, building a product that strikes them in their trial is essential. 

Their trial period experience has to have personalized recommendations based on viewing history and interests, easy subscription management with auto-renewal turned on by default, and email reminders for when trials are about to expire, so users do not forget about them (and lose access to it).

5.  Automate Support Process

Netflix has an automated customer support process that answers all the questions and solves customers' queries. It increases efficiency and reduces the cost of hiring human resources to solve the queries that can be taken care of by the machine. Netflix has automated its support processes. This way, it has time to focus on providing better service and faster resolution to their customers' issues.  

6.  Be Customer-Centric

Netflix has always been a customer-centric product. It has provided customers with what they want without any complicated process. The company goes out of its way to ensure that the website is easy to use and that even people who are not tech-savvy can use it. Its subscription options are easy to understand and affordable.

Customer Centric

Faithful to its promises, Netflix offers everything that is promised without cheating the customers. The best part about it is that it is a sticky SaaS product and does not lock the customers. When customers return for more, it is not because they are negatively addicted or obsessed with it. The reason is pure entertainment.

Stickiness vs. Retention vs. Lock-in

“Customer Stickiness is the only stickiness that matters,” as said by Mixpanel. With the increasing demand for SaaS products, it is more important to make the customers return to your product as it is to acquire them. A sticky product is designed for the customers to return while deepening the relationship. People often confuse the stickiness of the product with retention. But customer retention is different from customer stickiness.

Customer Retention is the number of people who continue to use your product because they are comfortable with it and are loyal to it. They use it monthly or yearly, based on your subscription model. One of the other ways that retention is often measured is by looking at how much revenue is retained from one particular period of time to another.

Customer Retention is a fundamental health metric of a SaaS product business model. So while the increase in stickiness increases retention, retention is not the same as customer stickiness. Retention is the summing up of people who stick back to the product.

One of the essential parts of creating a product with customer stickiness is to see why a customer would choose to return your product. What is it that you are offering? But again, that should not be confused with customer lock-in.

Customer Lock-in is a negative term that is often confused with stickiness. Customer Lock-in is when the customer is so hooked to your SaaS product that it is difficult for him to leave. For example, business airlines provide miles/points to be used within a particular period. Hence, you must travel if you need to use them, which could turn out to be a not needed trip.

Achieving excellent retention doesn't have to mean locking your users in a room with bars on the windows and throwing away the key. Lock-ins do not create value like stickiness; instead, they frustrate users.

Stickiness vs. Retention vs. Lock In

Wrap Up

Creating a sticky SaaS is not easy, but it is not impossible either. You can hire expert software developers to create sticky software per your requirements. Whether it is a B2B SaaS product or a B2C SaaS product, they are ready to offer their expertise to you. Check out more of GoodFirms and GoodTal blogs.

Myra Williams
Myra Williams

Myra Williams is a content creator for more than 7 years. She loves to read and write digital articles. When she is not writing, she reads classic literature, enjoys coffee and spends time with her family. 

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