How Can You Improve SaaS User Retention Through Instant Payments?

Calling all CEOs, COOs, CFOs, CTOs and Heads of Product in the world of SaaS! Securing long-term loyalty from your subscribers is fundamental to your business model. But have you ever considered the role embedded finance can play in this?

Maybe it hasn’t crossed your mind, or perhaps not as an immediate solution. But guess what? Read on to discover the potential of instant payments in boosting user retention within the vertical SaaS realm.

1 – Understanding Vertical SaaS Business Models

Software-as-a-Service (SaaS) companies operate on a subscription-based model. This type of business requires adopting a management approach that promotes user retention.

1.1 – Vertical SaaS: Targeted Solutions for Niche Markets

Vertical SaaS platforms provide cloud-based services tailored to specific industries—whether it’s e-commerce, insurance, logistics, or hospitality. Unlike their horizontal counterparts, these platforms are finely tuned to cater to niche markets and comply with industry-specific standards. So, what’s in it for you?

• Higher conversion rates: Precision-focused marketing strategies are far more effective here.
• Reduced competition: With fewer players, there’s more room for you to shine.
• Amplified growth potential: Tailored services offer enticing upsell opportunities and, of course, enhance user retention.

1.2 – Key Metrics in SaaS: Reducing Churn and Increasing LTV

Are you responsible for the growth, finances, or roadmap of a SaaS company? Then you understand the importance of your customer subscriptions, regardless of your product. Some classic KPIs help you keep a close eye on your data and overall activity.

1.2.1 – Minimise Churn Rates for Better Retention

Are you responsible for the growth, finances, or roadmap of a SaaS company? Then you understand the importance of your customer subscriptions, regardless of your product. Some classic KPIs help you keep a close eye on your data and overall activity.

Your churn rate is, in a way, the second most critical factor after cash. It measures the percentage of customers or users who leave your ship and cancel their subscription. It’s well-known that acquiring a new SaaS user costs you much more than trying to retain them.

So, in your SaaS management, you absolutely must keep this churn rate as low as possible. Online user experience, service pricing, feature quality, etc. –analysing various indicators helps you make necessary adjustments.

1.2.2 – Maximise the Customer Lifetime Value

Completing the puzzle is the Customer Lifetime Value (LTV). Essentially, it gauges the average revenue generated by a user throughout their subscription journey. Boosting this value benefits your SaaS, with key metrics to keep an eye on including the churn rate and the value derived from subscribed services.

So, you have every interest in maximising this amount for your SaaS performance. It depends on the churn rate but also on the value of the subscribed subscription. The more your services meet the customer’s needs, the more you can offer a premium rate. Fine-tune all the features offered, including those that enhance the user experience peripherally. An example of this is instant payment, as we will detail.

2 – Tackling Payment Delays: A Crucial SaaS Challenge

Payment terms concern every business. This issue becomes even more pronounced in a time when money constraints are tightening. So, it’s a pain point to keep in mind, even if your business doesn’t involve lending money to your customers or financing them like a banker. Let us explain!

2.1 – Cash Flow Matters to SaaS Users

Consider Jump, a SaaS tool that offers freelancers the perks of employment without sacrificing their independence (health insurance, pension contributions, no need for accounting, etc.).

By signing a permanent contract with Jump, freelancers receive payment for their client invoices in the form of a salary from Jump. This means that significant financial flows pass through Jump’s platform. However, salary payment delays are common because client companies have very lengthy accounting and financial processes.

With substantial financial transactions in play, delayed payments can wreak havoc. Enter Aria: by integrating with the SaaS platform, the instant payment solution ensures that the financial resources and working capital (WCR) of independent users of Jump are not negatively affected.

2.2 – Instant Payments: A Strategic Advantage to Foster User Retention

SaaS can enhance the user experience by offering more than just its basic intermediary products. In our example, Jump incorporates an integrated financing tool within its SaaS platform, Aria, to enable instant payment to freelancers directly on the platform.

By providing this financial service within its application, the SaaS platform stands out from the competition and promotes user retention by increasing user satisfaction.

Use Case: Transforming User Experience on Your SaaS or Tech Company With Instant Financing

Imagine this scenario. You’re on a specialised SaaS platform for business travel. After providing a service, you send an invoice. Two scenarios: waiting for payment… or getting instant payment with Aria.

What if it were you?

• Your goal: Retain users and minimise churn.
• The scenario: “A” provides reservation and travel management services to “B”. When the service is delivered, and an invoice is generated on your platform, “A” faces a choice: wait for “B” to settle the invoice, which can take up to 60 days, or opt for instant payment. By choosing the latter, “A” clicks on the integrated “Get Paid Now” feature offered by Aria. Thanks to Aria, your users get paid instantly, turning your platform into a comprehensive financial tool.
• Why integrate Aria into your SaaS or tech stack?
  • Enhanced tool adoption: By offering instant payments, you boost user interest and engagement on your platform.
  • Increase loyalty and reduce churn: Nothing beats quick payments for user satisfaction.
  • Streamlined user experience: Payments are made easy and accessible directly from your tool, ensuring smooth and straightforward transactions.
• How to integrate Aria? Aria’s API allows seamless and efficient integration of the instant payment option. The “Get Paid Now” button gives your SaaS users the ability to instantly finance their chosen invoices or wait for payment from their client(s).

3 – Practical Steps for Implementing Instant Payments in a Vertical SaaS

There are technical solutions available to enhance user retention for a niche SaaS through instant payments. Fintech companies have developed tools for this purpose in the field of embedded finance.

3.1 – Embedded Finance: Revolutionising SaaS Payments

Embedded invoice financing within the product serves as a solution to the frequent need for quick payments expressed by suppliers. It seamlessly integrates into your platform, granting users one-click access to instant invoice payments.

3.2 – Aria’s Innovative Solutions for SaaS Platforms

At Aria, we offer this embedded invoice financing technology to help our SaaS clients enhance customer retention.

3.2.1 – Aria's Vision

At Aria, we firmly believe that faster payments equal accelerated growth. That's why at Aria, we're reimagining invoice financing by integrating it into your product, platform, or SaaS to enhance the user experience, boost retention, and ultimately drive sales growth.

3.2.2 – What We Offer for Vertical SaaS

With Aria, your users can effortlessly request instant payments, covering the full invoice amount. The financial costs you incur are tailored to transaction volume, risk factors, repayment timelines and payer solvency.

As vertical SaaS platforms continue to offer increasingly customised services, focusing on user retention becomes vital for accelerated growth. Enter the game-changer: instant payments seamlessly integrated into your digital apps.