How many project management tools can you name?
Let me take a bet. You can probably name too many SaaS management tools.
There are Asana, Monday, Trello, Notion, SmartTask, Zoho, and many more.
Dozens of SaaS products compete for almost every digital problem – be it project management or social media scheduling.
To get ahead of the competition, you don’t just need an exceptional product but some brilliant growth strategy to reach your ideal customers. As a link-building and full-service SaaS SEO agency, we bring you this killer guide of SaaS growth strategies you can use in 2023.
What we’ll cover:
What exactly is SaaS?
In simplified terms, SaaS (Software as a Service) involves cloud-based software that is sold on a subscription basis and can be accessed via the internet.
Think of how you use common SaaS solutions like Slack and Trello. All you need to do is pay a monthly or yearly fee and either use it on a browser or download the desktop version.
What is SaaS growth?
How do you determine if your company is growing? How does an investor figure out which SaaS companies are worth investing in?
The answer to all such questions is SaaS growth.
It’s the process of determining your SaaS business's growth stage. You can do this by calculating various metrics and keeping track of it over time.
Here are the four main growth stages a SaaS business goes through.
How can we measure SaaS growth?
You can break down your entire process into five SaaS growth stages: acquisition, activation, retention, referral, and revenue.
Then, assign metrics to measure growth and success for each stage.
- Customer acquisition costs to measure each channel’s profitability (acquisition)
- Activation rate to measure when users experience that Aha! moment (activation
- Churn rate
- Retention rate to measure product stickiness
- NPS for referral and customer expansion
- CLV (Customer Lifetime Value) for the revenue stage
You can even measure metrics like Average Revenue Per User (ARPU), net Monthly Recurring Revenue growth rate, LTV to CAC ratio, and more.
All these metrics together will show you the health of SaaS businesses and the pace at which they’re growing.
Top 9 Growth Strategies for SaaS in 2023
Now that you know how to measure SaaS growth, here are nine SaaS growth strategies to help you improve these metrics in 2023.
#1 Focus on customer acquisition
Generating leads and turning them into customers is key to driving SaaS growth. To do that, you must first understand who your target audience is and how best to sell to them. There are several ways to do that:
- Find your target audience
- Create buyer personas
- Find the channels on which your buyers are most active
- Develop targeted marketing campaigns for these channels
- Once you’re done with the basics, here are some ways you can improve customer acquisition:
- Invest in paid advertising. This will help you drive traffic to your website and landing pages. Here’s how Ahrefs drives top-of-the-funnel traffic to its website using a Facebook advert.
The best part about the ad is that it ensures that anyone who clicks on it is interested in SEO and thus is a potential prospect for the company. They can then retarget these visitors with other campaigns.
- Find out a unique strategy. For example, Xero didn’t focus on the end-user (small business owners that usually hire an accountant or a bookkeeper to manage finances). Instead, they launched a partner program that targeted the end user’s accountants and bookkeepers.
The partnership was based on a give-and-take approach, and during an investor briefing in 2016, it was found that this strategy accounted for more than 90% of paid memberships in New Zealand and Australia.
- Launch referral programs to have existing users bring more leads into your funnel.
#2 Expand your sales and marketing efforts
Many SaaS companies like Slack have made it big without a full-fledged marketing and sales team. But you will need a team of professionals to support your product after a certain stage.
For example, you will need people to work on demand generation, lead nurturing, product marketing, and sales enablement to close deals faster and more efficiently.
Here’s how you can start by building that sales and marketing infrastructure to supplement your product-led growth:
- Create a detailed marketing plan. Your marketing plan should include the mix of marketing channels you’re targeting, the marketing goals and OKRs you’re focusing on, the SaaS capital for each strategy, the kind of content you’ll be creating, and so on.
- Have workflows and materials in place. Which sales process should your sales reps follow? Which documents and training materials will they need to close deals? How should they respond to specific sales questions like, “Why is your product so expensive?” These are all the things you should provide to your sales and marketing teams.
- Equip the team with the right tools. To focus on high-level tasks such as strategy building and execution, your team would need the help of tools such as CRM, sales intelligence, and marketing automation software.
- Measure and track important business metrics. You’ll need to measure metrics to determine whether your marketing and sales activities bring the desired results.
#3. Develop a comprehensive pricing strategy
Imagine a visitor came onto your pricing page, motivated to purchase the tool. But because the pricing page was so complicated, they decided to put off their purchasing decision.
Not a great experience, right?
That’s why Zendesk simplified its pricing page to improve conversions. Their previous pricing page didn’t help the user compare all the plans and the different features. So, they simplified it to help users make a decision quickly.
You can also make use of the Freemium model as Dropbox did. They offered free storage capacity to all users. Once the users were comfortable with the tool and reached the limit, Dropbox started pursuing them to switch to the paid version.
This strategy surely worked, and Dropbox has rapidly grown its user base.
If you’re just starting, you can experiment with different pricing tiers, create one for each customer segment, and test how that impacts growth.
Remember, the key is to find the balance that helps attract customers and generate revenue. Any higher than that, you’ll lose customers, and any lower than that will impact your revenue.
#4 Invest in SEO and content marketing
SEO is how you attract visitors, and content marketing is how you convert them into leads and eventually paying customers.
In his words, “Up until the past 2 months, content marketing accounted for 70% of our daily signups. This is just a great way to provide value for readers, without full self-promotion. If someone likes your content, they are most likely interested in finding out more about what else it is you do.”
And the statistics prove the same. Buffer grew from 0 to $20 million ARR in less than ten years.
Let’s look at some of the strategies Buffer used over the years (and you can replicate too):
- They create in-depth and engaging articles. Their articles are at least 1500 words long and made with clear search intent. Take a look at this article. It’s relevant to the target audience and captures the reader’s attention with a real-life case study.
- They promote their content extensively. Look at how the same article gets shared on their social media
Some of their articles have even gone on to gain over 16,800 retweets and shares on social media.
- They have an SEO-friendly website. Not only is it built to be responsive, but everything from the site structure to the navigation is perfectly laid out.
- Earlier, they used to focus heavily on guest blogging. This allowed them to create awareness and build valuable backlinks, which helped them improve their ranking.
#5 Adopt a SaaS product-led growth model
Product-led growth is one of the most popular terms in the SaaS industry today, and for a good reason. It makes use of your product to help you attract, engage, and retain existing customers for a long period of time.
Here are some product-led strategies you can capitalize on:
- Make use of free trials and freemiums to turn MQLs (Marketing Qualified Leads) into PQLs (Product Qualified Leads)
- Minimize friction in your sign-up flows. This could mean having fewer fields to fill in, giving clear information on what each field means, and so on.
- Take the help of welcome screens and tooltips to guide users to reach the activation point quickly.
- Showcase slideouts. For example, when HubSpot noticed their users copying and pasting emails instead of using saved templates (premium feature), they showed the below slideout to encourage the user to upgrade.
#6 Innovate through rapid test and learn cycles
If there’s one thing all SaaS customers expect, it’s innovation and the addition of new features and functionalities.
How do you figure out which things need to be modified? Or which feature requests are popular?
One way to do that is by working closely with customers. Deploy customer surveys often or ask your teams to get in touch with customers now and then to understand their pain points and requirements.
It also allows everyone from designers, software engineers, and data scientists to get together from the ideation process.
You can then adopt a collaborative and iterative approach like rapid test and learn cycles where you deploy a new feature or modification and get customer feedback. Afterward, you can adjust the feature accordingly. This approach also follows the “fail fast” vision and can be useful for many B2B SaaS companies.
Note: If you’re just about to launch your SaaS product, you can build an MVP (Minimum Viable Product) and allow potential customers to test it out for free. Depending on the feedback, start working on the prototype.
#7 Improve activation with in-app onboarding
What if you subscribe to a free trial for a tool, but you don’t know how to use it?
A few of us would try to go through the guides and tutorials. But most of us would move to a simpler tool or one that provides a good onboarding experience.
In-app onboarding is a great strategy to ensure your users aren’t left to themselves and that they know what to do next.
To top it all, a great onboarding experience will help you improve trial to paid conversion rate and product adoption rate.
By the end of the tooltips in all the sections, a user knows how to add buttons, adjust styles, and much more.
You can even use in-app gamification to make the experience more engaging, which translates into a higher activation rate. This could be in the form of progress bars, badges, rewards, and milestone celebrations.
Moosend has turned its onboarding program into an email sequence with a progress bar.
This works great as the user can visualize all the steps and is motivated to complete them to reach the final goal.
#8 Improve retention with exceptional customer care
We have all read or heard somewhere that retaining a customer is less expensive and harder than getting new customers.
But that becomes even more important in SaaS as it makes your growth and revenue more sustainable.
It also increases your CLTV (Customer Lifetime Value), and your happy customers draw more referrals for your business.
Here are four strategies to help retain your SaaS customers:
- Implement live chat on your website. Many customers prefer to get their doubts resolved instantaneously instead of waiting for an email reply.
- Add value throughout the customer journey. Look at how Mailchimp shares valuable articles and case studies that help users succeed with the tool.
- Create a communication schedule that helps you regularly connect with your customers. Many clients may not reach out to you if they have minor issues with your tool. To solve this potential churn, it’s important that you address these issues proactively and build a healthy relationship.
- Build a community. This community creates a sense of being a part of something large, and users can easily connect to different people and share resources, strategies, and tips, making it a great way to strengthen your brand.
To measure customer retention, you can use metrics like churn rate, NPS, retention rate, CLTV, CLTV to CAC ratio, and so on.
#9 Protect the funding and focus on leading growth metrics
How can you assure your investors to keep backing your business with funding? One way is by proving that your business is growing.
This means tracking essential business metrics and reporting them from time to time. The list should cover indicators like SaaS revenue growth rate and margin but also focus on growth indicators such as retention rate, the monthly volume of leads interested in the product, activation rate, number of active users, customer acquisition cost, customer lifetime value, and so on.
Tracking these metrics will also show you the marketing channels generating enough traffic and conversions and those failing to do so. You can then reallocate your marketing budget accordingly.
Ready to grow your SaaS company?
These nine strategies will help you build a better product, create a solid marketing plan, and unleash tips and strategies that have worked for the best SaaS companies in the world. All in all, you’re set on the right path to grow your SaaS business.
While trying out your SaaS growth strategy, ensure your team routinely analyzes the results each of these strategies are bringing. With SaaS, there’s no one-size-fits-all, and you may find that a different combination works best for you.
If you’re still confused and need extra guidance, reach out to us at MADX. We’ll help you guide your SaaS company with our experience and knowledge of working in the SaaS market.
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