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December 30, 2018

How Machine Learning and AI enriches your SaaS


Edwin Lisowski

CSO & Co-Founder

Reading time:

9 minutes

Artificial Intelligence (AI) is one of the cutting-edge emerging technologies that attract a lot of attention and funds. There is a very little AI that cannot do and that’s the reason behind the future where AI will profoundly impact every industry you may consider and SaaS is one of those industries.

On the other hand, we see the arise and rapid growth of Software-as-a-Service (SaaS) and Marketplace business model companies. In short, SaaS suits today’s technology changes very well and that’s why it is able to maintain increasing growth year after year. Let’s find out what can result from combining these two together.

SaaS and AI companies thrive continuously in the last years and it won’t stop anytime soon

Software-as-a-Service is a quite sizeable market that offers software as a service for business or individual users. What is unique about the software market? That is to say, by 2020, 73%[1] of companies plan to operate exclusively on SaaS.

In addition, there is no difference in the growth rate of such solutions for large corporations and SME’s, which suggests the need for such solutions in various sectors of the economy – it is clear that SaaS is a good and desirable solution for many businesses.

saas ai

Now, the question arises, how to keep competitiveness in a such dynamically growing market? There is no doubt that this ‘fertile soil’ will attract more players who will offer similar services.

machine learning saas

For example, according to Harvard Business Review on Innovation – synergies between technologies, depending on the application and industry, are often indicated as a key factor for growth and innovation.

Let’s see what computer software companies can gain thanks to one of the emerging technologies – Artificial Intelligence.

Artificial Intelligence? Buzzwords and buzzwords…

AI, Machine Learning, Deep Learning, Reinforcement learning, Big Data … These terms are well-known thanks to increased media attention. They describe great concepts but in the culture of innovations and startups, they have turned into buzzwords. However, what is really behind this computer science jargon?

Artificial intelligence (AI) is an evolving term but generally, it is a label for a field of study—specifically, a branch of computer science that aims to create intelligent machines. It has become an essential part of the technology industry. Most importantly, it means algorithms and machines that actually perform the discovery and learning process to transform data into valuable insights.

How can saas Startups join forces with AI?

There are many examples you could possibly heard about, for instance Office 365, Dropbox, Salesforce and Slack. All of them invest in AI. Over the past few years, the field of AI algorithms has proven it can bring many benefits to businesses. Let numbers and some official data on AI industry speak about themselves:

  • AI solutions helped Amazon to shorten “click to ship” cycle from 60-75 minutes to 15 minutes. An annual return on investment in the new technology yielded to nearly 40% [2].
  • Investment into AI-backed start-ups by venture capitalists has increased 6 times [3] since 2000.
  • 84% [3] of enterprise executives believe investing in AI will lead to greater competitive advantages.

Companies that have decided to implement AI could quickly recognize the value of this decision. Regardless of the industry in which a company operates or the type of customer problems they solve – AI can provide solutions that will genuinely improve business performance.

Y Combinator in its playbook for startups have written on the first page and in the first sentence: “Your goal as a startup is to make something users love. If you do it, then you have to figure out how to get a lot more users”.

Following their advice, we see two key areas of development that increase competitiveness – focus on product development that users will love and marketing that will attract more users.

Let’s analyze AI’s potential in those areas.

Boost your Customer Service & Experience


Source: Artificial Intelligence: What’s Possible for Enterprises In 2017. Forrester, by Mike Gualtieri, November 1, 2016. Courtesy of The Stack. [4]

There are tons of ways to communicate with your clients: phone, chat-bot, Facebook, email… We can clearly see the challenge of personalized communication. These days it is quite a big deal, but AI offers a hand.

Natural Language Processing (NLP) and Machine Learning could deliver a very personalized communication, which answers immediately to your customer’s questions at every step of the customer journey. NLP is all about understanding, interpreting and manipulating human language. Machine Learning goal is to find valuable patterns through learning processes and it combines perfectly with NLP.

How can you find that interesting for your business?

  • Automate personalized emails and other messages with AI algorithms and stop spending hours composing and scheduling weekly communication to multiple segments of customers.
  • Gain a 360 degree holistic view of the customer and discover new deep insights with Machine Learning.
  • Implement a smart chat-bot. From pharma through e-commerce to fashion – provide magnificent customer support. Access to lots of data sources makes a real opportunity for chat-bot to craft personalized content based on chat stories, continuously new identified patterns and easily detectable repetitive problems.

Intelligent analysis, optimization, predictive models and AI in SaaS app

So, instead of looking backward into your business data and old history, the intelligence that AI provides can analyze large volumes of real-time data to showcase live insights and help experts in decision making. You should think about prediction as to the process of filling in the missing information. In short, Advanced Analytics nurture the best data use for your software product.

And there is a number of possible applications of predictive analytics for your business:

  • work out the best way to tackle customer churn. Identify customers likely to churn and retain them effectively by undertaking intelligent, personalized, and automated multiple actions.
  • reach a 30% online sales increase using AI-based pricing, which keeps in-line with your overall growth strategy,
  • aggregate tons of data and determine equipment condition with accurate predictive maintenance forecasts, which cut lots of costs for various businesses: production, car/bike sharing, sports facilities management, real estate etc.,
  • deliver up to a 50%[5] improvement of assortment efficiency,
  • increase demand forecast precision and boost sales in connection with best marketing activities and most efficient asset & resources management.

Value Proposition. Make your product inconceivable delightful.

The ultimate goal is to reach and settle in the repertoire of tools that will be in everyday use by your potential user. A deep understanding of users, who they are, and how they behave is the best way to respond to their current and potential future needs.

How can AI help in these areas?

  • Firstly, analyze customer data better, their interactions, history, preferences, demographic data etc. and find undiscovered insights, gaining competitive advantage. See what others don’t.
  • Secondly, use AI Recommendation Systems and seek to fill up all the needs of your customers.You’ll be able to provide the best recommendations for various purposes: effective and personalized learning in education app, match running and other sports user information and connect with near shop discounts or restaurants promo offers.

In addition, determine best recommended further activities for your users in terms of goals achievement rate, based on their preferences, history and real-time data (sports, education, work, project management, HR etc.).

..or be bold and disrupt your industry. Do you prefer quick or long registration processes? Why not to simplify the on-boarding process in the banking industry with Computer Vision, introducing a new way of signing up fully remotely by just taking a photo of your ID and few selfies. It sounds great, doesn’t it?

Marketing benefits – target the right people with the right content at the right time

We can risk saying that marketing is everywhere. When you develop a company that offers a computer software product, one of the recommended practices is investing 50% of the time in product development and other 50% in marketing [Traction: How Any Startup Can Achieve Explosive Customer Growth, Gabriel Weinberg, Justin Mares].

This is another challenge – what is the best way to target your campaigns effectively? Furthermore, how could the deep marketing analytics be used to deliver more value to your users? Take what you want. Meanwhile, there is no difference whether you want to improve inside marketing analytics of your application or increase your company’s marketing efficiency. Here, AI opens another range of possibilities.

machine learning
  • Optimize your marketing mix by finding out which incentives lead to the best business impact and increase your sales. Algorithms will provide continuous and autonomous optimization across all devices and marketing channels.
  • Reduce the time spent on preparing reports, analysis, and driving insights, instead spend more time on valuable, creative, and critical tasks.
  • Set up smart auto-segmentation. Machine learning in marketing analytics identify similar user behaviors and recognize patterns that can separate different customer groups without human interaction.
  • Finally, find and automate the best lead nurturing and sending frequency strategies in connection with marketing activities. Machine Learning will look for the highest efficiency and activity ROI by establishing recommended future plans of action.

Develop your saas app with AI

After reading the article, we can spot the new major fundraising hook for the next batches of startups, which could be „we use AI”. Also the winner-take-all dynamic drives companies to invest in AI. Artificial intelligence leverages business in one way or another, farther and farther ahead of its competitors.

So, putting it all together AI in Saas should be treated as a very special technology, which could embrace the full potential of your business and product. Especially when your business is SaaS-based, it is an appropriate time to check it out. Your customers will definitely appreciate it.

However, don’t fall into trap of working really hard and not getting anywhere. AI application possibilities are vast, from general purposes to a very specific challenge.

To sum up, contact us for a free consultation and we’ll find out where is the real value of implementing AI into your saas business.

Also, see our machine learning consulting services to find out more.


[1] Alison DeNisco Rayome. 73% of enterprises will run almost entirely on SaaS by 2020, report says. May 18, 2017. URL: Accessed Dec 30, 2018.

[2] McKinsey. URL: Accessed Dec 30, 2018.

[3] Louis Columbus. 10 Charts That Will Change Your Perspective On Artificial Intelligence’s Growth. Jan 12, 2018. URL: Accessed Dec 30, 2018.

[4] Thestack. URL: Accessed Dec 30, 2018.

[5] McKinsey&Company. Atificial intelligence the next digital frontier?. URL: Accessed Dec 30, 2018.


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