How can you grow and scale SaaS business? The first and most crucial point is: solve a problem. What a cliché, right? We know, but can you imagine the number of startups that fail every single day because they don’t solve a problem?
Even if they have a unique product or tool, that doesn’t guarantee any market reward and doesn’t even mean that consumers even need it. And when we say market reward, we mean people who actually open their wallets and enter their credit card information.
How can you get someone to pay for a service? Easy, find, and solve their problem.
A problem you solve helps them do one or more of the following:
- Save money
- Save time
- Make money
If you have found a solution for any of these points, then CONGRATS, you now have a business idea! If you solve two of these points, you’ve got an ace up your sleeve.
All three? You may have hit the jackpot!
In this article about how to grow and scale SaaS, we will cover the following:
- SaaS marketing challenges
- How to quickly grow your user base?
- User retention and customer lifetime value CLV
- The secret recipe for the success of a SaaS business
- Healthy Saas Metrics, what are they?
The goal of your business should be to get people to pay for your product or service every month because it provides value. Monthly Recurring Revenue is essential for all SaaS companies and MRR is one of our favourite words.
How to grow and scale your SaaS faster than others?
Major SaaS marketing challenges
For most SaaS businesses, a major issue is not the opportunity but time. Being a startup puts you already under pressure to earn enough so you can cover the expenses necessary to acquire new customers.
The initial success or failure of a SaaS depends on three different skills
- Acquire new customers quickly and cost-effectively
- Keeping customers in the long run
- Upselling to increase “Customer Lifetime Value”.
How to quickly grow your user base?
Either you differentiate your offer and stand out from the crowd, or close the business.
As we previously mentioned, a successful SaaS business isn’t just about coming up with something unique. Instead, if you want to grow and scale SaaS, focus on something customers know and genuinely love, just like Salesforce or Shopify.
The first pre-requisite for this step is getting to know their customers which will allow them to respond effectively to their needs.
In the case of Salesforce, they have revolutionary simplified sales management. Shopify has done the same with E-commerce, creating a low-cost platform for small businesses that want to sell online.
Now let’s get to the heart of the challenge. Assuming you have a product that you know consumers will love, you need to know how to sell it fast, generate revenue quickly, and get to cover the startup debts before running out of capital.
The potential customers are out there, all that you have to do is to find them and convince them. But, how will you do this if you just one of many companies that does the exact same thing as others?
Charging $15 less than the competition isn’t a differentiator you should aim for.
If it was about a lower price, then we suggest that you rethink your strategies. A race to the bottom is a tactic that rarely works, and we don’t think you should adopt.
Many companies like to you marketing titles and buzzwords about numbers, previous funds, and other facts, but in reality, these don’t matter as much as you might think. Don’t sell yourself with your past successes.
What makes the difference?
- Your technology stack.
- The innovations and unique features that you have.
- Your exceptional customer service.
- being a leader in the industry with the knowledge and skills you have.
- Keeping up with the new trends and applying product improvements based on customer feedback.
User retention and customer lifetime value CLV
- Improve the user’s onboarding process
- Make use of targeted marketing
- Research user behaviour
- Improve your loyalty rate through automatic emails
Make customer support your top priority
As easy as it might sound, but customer support is one of the areas where competitors don’t usually perform as well or pay enough attention to. This offers an excellent opportunity where you can beat them. Or, as we mentioned earlier, it can be a significant differentiator.
It is much easier and much cheaper to keep customers than to acquire new ones.
One thing successful SaaS enterprises do to increase their CLV is by producing educational resources that help their customers keep up with the latest news and make the most of the software’s potential. HubSpot, for example, created HubSpot Academy, with a certification program that helps users stay one step ahead while earning a certificate that will enhance their experience and CV.
All this, combined with efficient customer service, will keep customers satisfied over time. If the customer is satisfied, he will renew the subscription, increasing the Customer Lifetime Value.
Is there a secret recipe for the success of a SaaS business?
Successful SaaS companies are growing because they do marketing the right way. They believe in what they do, they hire the right people, and continue to invest in customer happiness, which increases revenues and profitability.
The challenge for startups is figuring out how to get started in inbound marketing, leveraging influencers, social media, and providing customer service that is at least as good as expected. If all these components are in place, customers will soon transform into “brand advocates”, becoming your marketing engines.
Healthy Saas Metrics, what are they?
- 10$ monthly income growth
- 20% of monthly revenue should come from annual memberships.
- 8% weekly growth of active users.
- Net promoter score of > 9
- 30% monthly expansion revenue of the new MRR
Experts like to come up with growth numbers that they refer to as “healthy SaaS metrics” which are numerical achievements a successful Saas business should produce.