Today, almost every SaaS company swears to operate by a per user per month model. Not only does this have a lower correlation with the actual value delivered to the customer, but it also restricts the distribution of value across the organization. Today, having only subscription pricing and cloud offerings isn't enough. Winning in SaaS means reimagining the value capture from the customer's context.
On the global turf, e-commerce CMS leaders like Shopify are leading the way with the same methodology across markets. Their Plus program goes out of the way to even commit a percentage of the customers' e-commerce business revenue. In the fintech world, Stripe disrupts the market with similar offerings for the new-age creators.
Though it may seem to be a bold move when industry incumbents are still using pay per user per month models to deliver value to the customers, according to Sumit Khandelwal, Co-founder of Xoxoday, the most successful innovators start by determining customer value to build the adaptive business models with a clear monetisation strategy and predictable revenue. “Transactional led SaaS ensures that you focus on scaling the value delivered, not optimising optics by scaling usage. We will witness more intuitive products leveraging transactional-led SaaS to drive home the value in the coming time,” he says.
Scaling on transactional-led SaaS business model
Founded by Sumit Khandelwal, Manoj Agarwal, Abhishek Kumar, and Kushal Agrawal, Xoxoday is a technology company that builds infrastructure to send rewards, perks, incentives, and disburse payouts to employees, customers, and partners. It democratises payouts via branded currencies for all features within an enterprise. Their flagship product Plum automates rewards, incentives, and payout programs with inbuilt triggers and intuitive workflows, making it seamlessly integrated with the flow of work. Their reward marketplace has a partner network of 21,000+ rewards options in 80+ countries, making it a delightful redemption experience for end-users.
Sumit says there is heightened demand for automation and digital transformation across the value chain - merchants, businesses, and end-users. The sector, which has largely been offline, is now witnessing large-scale innovation through branded currency, API-led growth, integrated solution, and a product-first approach. Xoxoday is well-positioned to take advantage of the $1 trillion rewards, payouts, and incentives industry, which is largely still powered by legacy systems. This market is growing at a fast pace and is expected to reach $1.9 trillion by 2027.
Xoxoday's flagship product, Plum, captures the value through transactional-led SaaS. For example, if a company decides to gift coupons to employees during Christmas, Xoxoday charges a percentage commission on transactional value. This means that no matter the number of users, features purchased, or licenses, the only factor that counts is the reward value that the customer uses. "Our net revenue is the redeemed reward value along with a percentage commission. We charge our customers when their recipients redeem their reward," says Sumit.
The AWS engagement
Xoxoday and three of its products - Xoxoday Plum, Empuls, and Compass - have been on AWS since day one and increase server capacity for every user they add to the platform. According to the founders, focusing on a transaction-led business model is only possible when the product is deeply integrated into the flow of the work.
Over time, they realised that users are obsessed with their workflow, and they want everything from their work palette, thanks to the rising number of day-to-day usage software. The company has used AWS technologies to connect nearly all of the industry's most potent products through API, including SAP, Hubspot, Salesforce, Freshworks, Survey Monkey, Qualtrics, Zoho CRM, Darwinbox, and others.
Xoxoday's technologies are hosted on AWS, and they have leveraged AWS Relational Database, S3, EBS, EC2, Redshift, Cloudwatch, and Lambda to improve stability, auto-scaling, and resource utilisation. AWS cloud has an interesting way to make a user-mindset shift through integrations and deliver auto-scalability to our business.
"AWS is a leader in cloud. With the way they've democratised the whole infrastructure play, there's no other name that comes to mind. It's a great platform for startups to set up their business easily. We are continuously looking at various use cases with AWS to enhance the business growth and product's usability," says Sumit.
Scaling to newer geographies in the future
Today, thousands of businesses of all sizes, from startups to large enterprises and Fortune 500s, use Xoxoday's business currency to send rewards, perks, incentives and disburse payouts. Xoxoday has 1,500+ clients with 2.5 million+ end-users and 80 million+ rewards distributed on a global scale. Some notable clients include Freshworks, Kantar, Nielsen, NFX, Capgemini, NIIT, H&M, and Infosys.
Due to their differentiated feature set such as multi-admin module and multi-currency redemptions, Xoxoday has attained a worldwide scale with features geared to appeal to North American and EU growing markets. “In the worldwide market, we have ousted legacy competitors, achieving almost 60 percent of acquisitions from overseas markets,” says Sumit.