The volume of data available to businesses is expanding rapidly. With proper analysis, this data can inform and improve all processes within a company, from HR to customer service and financial decision-making.
And it’s not just company leaders who harness the data—it’s estimated that by 2025, most employees will use data to optimize almost every aspect of their work. This data-driven culture enables businesses to make real-time improvements and gain a competitive advantage.
This article discusses the best practices and benefits of using data science and analytics for SaaS companies. We examine how the leading financial SaaS provider Sage leverages data to remain at the forefront of the industry.
Table of Contents
- What Is Sage?
- How Has Data Improved Sage’s Processes?
- Challenges and Limitations
- Final Thoughts
- 365 for Business
What Is Sage?
Sage is a well-known provider of cloud accounting and financial management software-as-a-service solutions. It helps millions of small and mid-size businesses worldwide to digitize their financial processes (from accounting to payroll and taxes).
The company began as a startup automating basic accounting processes. In the 42 years since then, the software industry has seen huge technological developments, an increasing number of competitors, and ever-growing customer expectations.
Sage meets the challenges of the SaaS industry by leveraging big data. For example, it gathers and analyzes customer feedback, which allowed it to identify the need for comprehensive, multi-featured software and add HR payroll, CRM capabilities, and payment gateway options to help users manage and make payments more easily. And this is just one example.
Let’s examine in more detail how data has improved Sage’s processes.
How Has Data Improved Sage’s Processes?
Data enables SaaS companies like Sage to make smarter decisions based on facts rather than speculation. Although all successful businesses take risks sometimes, data-driven decision-making ensures they don’t leap into new opportunities without assessing the potential pitfalls.
Before launching a new software product or feature, Sage thoroughly analyzes the market conditions and its target audience data. This way, the company doesn’t waste resources on a solution that doesn’t address current customer needs. Modern data science tools allow businesses to access data quickly—even in real-time—which makes it easier to test the success of different strategies.
Data can also inform pricing and marketing strategies. Another useful tool for SaaS businesses is predictive analytics. Companies like Sage use it to identify new revenue opportunities, forecast future trends, and respond timely to market changes.
Process Streamlining and Optimization
Data helps evaluate the effectiveness of internal processes and find ways to optimize them. Through data analytics, SaaS companies can assess employee productivity and identify time-consuming workflows.
Sage uses real-time data to spot issues and bottlenecks and make its internal processes more efficient. Once it identifies what causes delays, it finds ways to streamline the process and then analyzes the outcome for further refinement.
In addition, SaaS companies can resort to data-driven recruitment to reduce hiring costs and increase efficiency and retention rates. Sage accelerates its global recruitment processes with candidate screening and applicant tracking systems.
Last but not least, Sage utilizes robust fraud detection and cybersecurity processes to reduce the risks associated with online finance.
Expanded Marketing Intelligence
Given the high production and maintenance costs, SaaS providers must create an engaging customer journey to ensure subscription renewal. One way to achieve this is by enhancing marketing capabilities through data analytics.
Data analytics allows SaaS marketing teams to gain insights into customer behaviors and monitor user preferences. By analyzing target audience data, Sage’s marketers ensure they present the right messages and content to the right people at the right time. A/B testing of ads and product landing pages reveals which messages are successful, and data analysis gives insights into marketing campaign results.
Competitor analysis helps Sage understand how it fares against its closest rivals, which stimulates further improvement and innovation. The firm also taps into emerging trends in the wider industry. For example, Sage knew that a new UK tax scheme, Making Tax Digital, was in the works. So, it adapted its VAT return software to be compliant well before the scheme was due to begin.
Upgraded Customer Experiences
For a global firm with millions of subscribers (like Sage), it takes a lot of time and resources to keep on top of customer satisfaction. Another benefit of the usage of analytics for the SaaS company is the ability to track and understand customer needs—and provide the experience to match them.
In addition to gathering direct feedback from surveys, reviews, and its Product Feedback Panel, Sage harnesses data from its CRM system. This reveals information from previous customer interactions, such as preferred communication channels, attitudes to pricing, and specific pain points. And feedback from users who cancel their subscriptions helps inform customer retention strategies.
Sage takes those insights into consideration and addresses customer concerns and challenges. That’s how the idea to provide financial advice podcasts as part of its knowledge base was born. Sage also created a handy guide for those worried about the financial impact of Brexit.
Simultaneously, Sage continues to improve its products by analyzing people’s interactions with the features and identifying ways to enhance the website experience. The SaaS industry is highly competitive, and businesses must provide a superb website experience to remain relevant. To achieve this, Sage analyzes metrics like dwell time and bounce rate to highlight areas for optimization. The company also works with a digital marketing agency using data analysis to boost its SEO and content marketing efforts.
Enhanced Innovation and Collaboration
SaaS analytics play an essential role in innovation. Companies that listen to their customers’ needs are better placed to deliver competitive solutions. To this end, Sage analyzes user interactions with the software, tracks market trends, and performs competitor analyses.
Data also enhances R&D activities, leading to the development of innovative products to increase customer satisfaction and gain a competitive advantage. As more and more consumers expect products to contain the latest technologies, Sage increases the use of AI and automation in its software.
When employees are spread across the globe—as they are at Sage—seamless collaboration is essential. By ensuring that data is consistent and accessible, each team or department can view and act on the same information.
The ability to share insights and collaborate on key strategies helps to break down silos, especially if the teams use a centralized dashboard as a single source of truth. This fosters transparency, accuracy, and a data-driven culture.
Holistic Employee Insights
In addition to harnessing customer information, SaaS companies use data to gain insights into their workforce and improve the employee experience. With more than 11,000 employees in over 20 countries, data analysis is the best way for Sage to ensure everyone is happy and productive.
The firm analyzes employee engagement, sentiment, and retention rates. Based on the insights, Sage develops retention strategies that inspire loyalty, reduce recruitment costs, and attract new talent by committing to workforce wellbeing and offering competitive benefits.
Managers can quickly spot struggling staff members and those who need more recognition for their input. Data also shows how different people respond to training methods, reveals skills gaps, and ensures compliance with equality and inclusivity protocols.
Employee satisfaction leads to better productivity, which improves organizational performance, so acting on data-driven insights has a positive impact on the whole business.
Challenges and Limitations
Using data and analytics is beneficial for SaaS companies, but it comes with many challenges. For starters, large amounts of data can be overwhelming and hard to manage. Global data creation is projected to grow to over 180 zettabytes by 2025. This could leave many businesses with tons of data without knowing what to do with it.
What’s more, using too many sources can make the analysis difficult. So, it’s key to align data-gathering activities with business objectives. SaaS providers should introduce robust processes for collecting, storing, categorizing, and analyzing data.
Evolving data protection regulations can be a minefield, so it’s best to notify customers how their information is kept secure—like Sage does with its Trust and Security Hub.
Another challenge is ensuring data reliability. Validating its integrity is time-consuming but key, as even structured data can be inconsistent across systems (especially if the information is siloed). A common example is having two databases with different spellings of a customer’s name.
It’s also important to guard against bias. For instance, it’s common to unconsciously favor information that confirms one’s opinion even if the data says otherwise. Having multiple people examine the results helps spot and reduce such biases. But it’s crucial to ensure that those handling the information are data literate.
Data science and analytics help SaaS companies improve their processes by identifying problems and opportunities early on and basing decisions on reliable information. This case study reveals how Sage utilizes data to evaluate performance, track progress toward goals, and ensure the effectiveness of processes. And streamlined operations lead to engaged and productive employees, better customer relationships, and ultimately, improved performance and a competitive edge.
365 for Business
There are numerous applications of data science and analytics for SaaS companies. As the Sage case study showed, multiple teams can benefit from having data-related capabilities.
If you wish to upskill your employees and build a data-driven organization, try 365 for Business. Our corporate training platform provides beginner-to-advanced data science and analytics courses suitable for companies from all industries. Request a demo and try it for free.