How Can SaaS Companies Leverage Web3?

The advent of Web 3.0, also referred to as Web3, is revolutionizing the ways organizations are doing business. While some may dismiss this new technology, this is an untapped SaaS marketing strategy that few businesses are taking advantage of today. We explain exactly how SaaS companies can leverage Web3.

Let’s take a closer look at the exciting features of this new age of the internet and the ways to harness their potential for a SaaS business. But before that, what exactly is it?

Web3.0: All that it is

Web3

It all started in the 1990s. With the creation of the World Wide Web in 1989, British scientist Tim Berners-Lee revolutionized our history of communication. But during this first phase which lasted until the 2000s, the internet mainly featured static pages.

Then came Web 2.0, which is continuing through what we can call the social web. It is ruled by giants like Facebook, Twitter, Google, Amazon, and YouTube. Here, users play a crucial role in information exchange with content creation and sharing, relying on users’ contributions.

Web 3.0, on the other hand, is built around decentralized technologies. Thus, it is user-centric and more technologically advanced compared to Web 2.0. That’s what makes Web 3.0 the future!

What Web 3.0 has to offer SaaS Companies?

To emerge as a winner, SaaS companies must keep abreast of the rising trends. Not to mention, Web3 brings a ton of advantages to the table in the form of:

Data ownership and control

Web 3 is all about giving users complete control over their data. Unlike the existing Web 2.0, where a handful of companies like Facebook and Google control user data in their massive databases, in Web 3.0, information is decentralized as it is stored in multiple locations.

In this next phase of the internet’s evolution, there is no need for a trusted third party or intermediary. Instead, everyone can participate in a trustless environment.

Web 3 aims to disrupt the current centralized environment by building upon open-source, decentralization, transparency, trustless, and ubiquity concepts. 

For a SaaS business, this means no need to adhere to burdensome regulatory requirements, and clients will be the ones deciding just what personal data they are ready to share.

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Decentralization

Web 3.0 is mainly characterized by decentralized technology where no single tech giant is in control. The building blocks of decentralized technology include:

  • The distributed ledger blockchain.
  • Self-executable smart contracts.
  • Unique and non-interchangeable NFTs.
  • Interoperable metaverse.
  • Community-governed DAOs. 

Permissionless

With no central authority in charge, there is no bias and discrimination in Web 3, which means anyone can join the network and be its participant. This provides all businesses, including SaaS, the benefits of faster, cheaper, and effortless transfer of digital assets across borders reliably and securely.

Interoperability

While it isn’t here yet, Web 3.0 aims to remove the issue of cross-platform availability and allow all applications to be run on all devices or platforms. 

Transparency and decentralization

The idea is to redefine the web experience with structural changes to ensure decentralization and transparency across all aspects of the internet. The evolution to transparency will ensure enhanced privacy and security. 

Governance

Democratization is a significant factor of Web 3.0. Thanks to software-coded rules, the network participants can govern the direction and future of a project more democratically. 

All of these features mean that adopting Web 3.0 will require companies to rethink their business models and adapt to generate revenue.

Taking Advantage of Web3 Technologies 

Web3 cover pic

Web3, as discussed above, is building on the values of the earlier software architectures, the open internet. This evolution is now giving birth to technical innovation that can provide a fundamental base for economical innovation that can cause a radical disruption to our economy.

Cryptocurrency 

Ownership, one of the main features of Web3, is achieved through tokens. Ethereum pioneered this innovation with smart contracts, the self-executing contract with the terms of the agreement between buyer and seller being directly written into the code. Smart contracts can be used to tokenize assets that people can invest in.

These tokens or altcoins are not the native cryptocurrencies of the blockchain. For instance, the ERC20 is a standard used for creating and issuing tokens on the Ethereum blockchain. 

This tokenization of anything is one of the critical innovations of Web 3. Cryptocurrencies are fungible tokens that can be exchanged across networks easily. By turning the entire community of contributors within a network into stakeholders, Web 3 has created the need for new distribution strategies.

The opportunity is to leverage these tokens and the underlying decentralized tech to build new networks.

Privacy-preserving technologies like zero-knowledge proofs, private transactions, and private smart contracts are also significant for enterprise web3 usage and can enable use cases that are impossible in any other single company platform.

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NFTs

One of the widespread use cases of Web3 is NFT. Non-fungible tokens are unique and non-interchangeable units of data that are stored on immutable blockchain technology. 

NFTs are more than simply selling cartoon monkeys, though. They’re actually a powerful fuel for SaaS business’ marketing strategy to create network effects.

NFTs have made digital ownership verifiable, as such allowing for digital scarcity. A SaaS company can wrap its utility and purpose as an NFT or as a cryptocurrency. 

Current SaaS marketing strategies rely only on product utility, but these utility-based tokens add financial incentives to current utility incentives, creating a powerful growth engine. These financial incentives could be in the form of NFTs tied to company value, increasing the number of early adopters.

Besides giving creators and holders monetization opportunities, companies can use NFTs to build a community and connect directly with their customers.

Doing so will enable them to boost awareness, build community, give back, boost image, reach new audiences, promote customer loyalty, and drive sales. 

DeFi

Decentralized finance is a shift from centralized, traditional financial systems to peer-to-peer finance that aims to bank the billions of the world’s unbanked.

Being rebuilt from the first principles, DeFi focuses on transparency, permissionless, programmability, interoperability, and security. Fast-paced innovation is another of its main features that help bring solutions much faster to the user. 

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Metaverse

Another golden opportunity for businesses is this virtual world where users can seamlessly connect, interact, and transfer their products, services, and even themselves across multiple digital locations. 

Metaverse isn’t really here yet with the technology that will shape its future, such as VR, AR, and brain-computer interfaces (BCI) currently being developed.

DAOs

Traditional governance models’ sole focus is on serving the needs of owners and shareholders, which leads to misalignment and disengaged employees and customers. There is definitely an underrepresented focus on the public’s needs and sustainability.

Meanwhile, hierarchy-free decentralized autonomous organizations (DAO) are comprised of member-owned communities with no centralized leadership. 

Here, users participate in the governance of the protocols and decide their future by voting on issues instead of using free tech platforms in exchange for data. This model allows a more aligned and fair distribution of power.

SaaS Marketing Plan

Web 3 is a new mechanism of value creation and sharing that can be used to align the interests of all stakeholders on a common goal through community ownership, where all the community members own a part of the platform or an ecosystem. 

Besides creating and sharing value with users, Web3 can be leveraged for enhanced collaboration, mitigating the flaws of hierarchies, and data collaboration in a privacy-preserving manner while providing fair incentivization.

SaaS

Because Web 3 is open source and offers a high degree of composability, a SaaS company can also leverage the work of others and contribute to theirs. The financial value of tokens can further help SaaS companies immensely by acting as a powerful new tool for “bootstrapping networks” with token incentives. 

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When it comes to DAO, tokens align network participants to work together toward a common goal which is the token’s value appreciation and the network’s growth. These tokens give users of a project or product the ability to own a piece of it.

By bringing genuine owners who want to be a part of a SaaS company and share the same goal as them, the company can cut down its marketing budget significantly.

Here are some of the ways to add financial incentives to a SaaS marketing strategy:

  • Giving tokens to users for consuming content
  • Offering exclusive token-only access to content, channel, or events
  • Giving community members a say in the product feature set via a DAO
  • Using NFTs as a digital membership pass or ticket to a specific event 
  • NFTs can also be used as proof of attendance or participation
  • Tokens can also be used to offer specific rewards like entry into an exclusive discord community
  • Companies can also offer additional tokens for desirable digital marketing actions such as feedback, follows on social media, or a free trial
  • Using tokens to incentivize product-led growth by offering specific benefits for holding tokens such as lifetime subscriptions, lifetime premium support, future discounts, product roadmap input, etc. 
  • Reward customers for loyalty, promising referrals, product ideas, finding bugs, and sharing content or app 

A Saas Company can use a combination of incentives to reward its potential target buyers. These rewards can either be in NFTs, their brand coin, stablecoins, or popular cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), or Dogecoin (DOGE). 

Owning tokens will keep customers more engaged with the SaaS brand, especially the prospective SaaS customers of complex products known for their lengthy decision timeframes. This, in particular, can be a great way to attract millennial buyers and maybe even Gen Xers.

Providing users with tokens that have inherent value will bring more active involvement because the holder may actively try to increase the value by participating in the company’s brand ecosystem, which may increase the conversion rate.

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Final Word

The bottom-up approach in this new phase of the internet is to define a clear purpose, build an engaged community of early contributors, and match contributors with the tokenomics that allows them to benefit from the value creation power of the network. 

The focus here should be on getting users’ attention and engaging with them constantly to have a thriving community.  

As we saw, Web3 certainly has amazing benefits, but it is not without challenges. After all, it still is a nascent technology. Thus, it would take some time to achieve broad mainstream adoption. Not to mention, regulatory unclarity is still an issue with it. And while this technology offers the benefits of low cost, it can turn out to be really expensive. 

One of the most critical challenges Web 3 faces is in terms of scalability, with the applications built in this nascent sector struggling to strike a balance between cost, decentralization, and speed.

Besides making Web 3 applications usable for millions and billions of users efficiently, user experience is another issue that needs to be dealt with as there is a steep learning curve involved with Web3 technologies.

However, this doesn’t mean that a SaaS business cannot start small. With Web3 being a paradigm shift in how brands interact with customers, it is actually the time to educate and start positioning the SaaS business for the future.