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  • The Hack

    Create Revenue Streams for a Profit Flood

  • AARRR stage


  • Growth Problem

    How to Diversify Your SaaS Revenue Streams


One-trick pony. This idiom doesn’t just apply to a startup that’s banking on a single feature to lead it to stardom.

It just as equally applies if you only have one source of revenue that you’re relying on to keep your startup in the black (or barely alive).

And a one-trick pony is not something you want your startup to be.

You want it to be a glorious unicorn or even that rarest of mythical beasts, the decacorn.

But guess what?

Especially in the initial stages of your startup’s growth, relying on a single income source may not just jeopardize your IPO dreams, it can actually put your startup’s very survival under threat.

The wrongful assumption made about SaaS startups is that their sole revenue earner is customer subscriptions.

While subscriptions are a great way to keep the lights on and your fridge stocked with a variety of tasty beverages, it’s not the only to make a pretty penny.

The beauty of running a SaaS company is that you don’t have to limit yourself to any single stream of income but, rather, combine different ones to create a mighty revenue flood. Read below to find out how to make this happen.

Just Hack It:

  • Recurring monthly or annual subscriptions can be a great primary revenue stream for your SaaS business. But why limit yourself?
  • Here are some secondary revenue streams that you tag on to explode your earnings:
    • Provide reporting and data analysis services – pretty self-explanatory and, depending on your startup, this can become an easy revenue add-on.
    • Charge extra fees – this can also potentially be an easy win as you can charge for anything: from the initial setup and onboarding through to processing and transaction fees or increasing storage capacity. However, these fees need to be justified as customers can potentially get annoyed if this isn’t clearly communicated from the start.
    • Charge a premium for customer service – this may not work as well for a B2C startup as it could for a B2B business. For B2B products that are complex or specialized it may be much easier to justify such fees.
    • Offer professional services – this involves any form of consulting over-and-above supporting your core product offering. It can include such things as providing custom reporting or data analysis services, as mentioned earlier.
    • Publish content – we’re talking about going beyond the content you create for marketing purposes and actually creating a book or a standalone publishing entity that produces paid content on a relevant topic. This is a great way to turn yourself into a thought leader in your industry.
    • Engage affiliates – affiliate marketing is a significant revenue stream for info product peddlers of every ilk but there’s no reason why you can’t launch an affiliate program to help your SaaS’s top line.
    • Create a ‘white label’ solution – this means that you let your clients on-sell your solution under their own brand. While lucrative, it is important that this revenue model doesn’t detract from or affect your core SaaS offering.
    • Manufacture hardware or devices – this is a tactic used in certain industries, which helps to bolster your income by selling a custom gizmo that enhances or supports your app in some way. It can also create vendor tie-in, which can end up improving customer retention significantly.
    • Charge for API access – offering access to your startup’s underlying technology to other developers is a great way to make a buck. But marketing and servicing API customers is quite different and the added costs of this need to be factored into your planning.
    • Advertising – the reason we chose to include this revenue stream last is that, in order to make advertising work, your product has to be designed around this monetization strategy from the ground up. Selling advertising is a significant commitment of resources and it shouldn’t be taken lightly.
  • It’s worth noting that some of the above income streams can become the foundation for a startup’s entire business model. So it pays to stay close to your customers and keep close tabs on what revenue models are working and which aren’t.
  • Your goal is to find the right mix of revenue sources.
  • As your startup evolves, who knows, a secondary income stream may just become your main profit driver. You won’t know unless you try…

Source or Inspiration:

11 Revenue Streams For SaaS Business

SaaS Revenue Modeling: Details of the 7 Revenue Streams

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