Getting the first hundred customers — even just the first few! — to your SaaS business is exciting and critical to your future. But customer acquisition isn’t the only thing to focus on for growth.
That’s why we’ve put together this breakdown of SaaS growth strategies — opportunities beyond customer acquisition for you as SaaS company owner or leader to focus on that can have a significant impact on your future.
Understanding Churn and Its Impact
The term churn is an important aspect in SaaS growth strategies. Churn refers to subscribers who leave during a given timeframe and the financial impact of those lost customers. It can be expressed as a number, rate, or percentage of your overall subscriber base. It stands in contrast to growth rate, which is the number of new subscribers to your customer base and how the revenue from them affects the overall growth of your business over time.
SaaS churn is important because it — along with growth rate — determines whether your SaaS company actually grows. Let’s break down churn. Quite simply, if you have 100 customers and you lose 10 customers, you have 10% churn during that period. But churn is usually measured in revenue, against your MRR.
If your SaaS company has an MRR of $100,000, and your churn rate is 10%, your adjusted MRR is $90,000. If, at the same, your growth rate is also 10%, your SaaS company can’t grow because you’re staying even at $100,000 MRR. To grow, your churn rate must be less than your growth rate. If your growth rate were 15%, that $15,000 each month would exceed the $10,000 lost, and you’d be showing growth.
When you’re growing a SaaS company, doing all that you can to reduce churn is synonymous with investing in your own growth. While a consistent goal will always be acquiring new customers, keeping customers around helps reduce your churn rate, increases your growth rate, and helps you focus on building your business and achieving your goals.
Perfect Your Sales Funnel
Your SaaS sales funnel is a critical element in your SaaS growth strategies collection. There are numerous aspects working in tandem that create the overall funnel and contribute to its functionality. Hence the importance of fine-tuning your sales funnels frequently and consistently to ensure positive end results.
First, always consider what comprises a sales funnel. A perfect example is the Hubspot inbound sales funnel consisting of four stages: 1) attract, 2) convert, 3) close, and 4) delight. As people move through this funnel, they also become categorized based on their actions: A) strangers, B) visitors, C) leads, D) customers, and E) promoters. Revisit the messaging that each of these categories of people need to hear and know (A–E) based on where they are in the funnel (1–4).
Finally, consider what influences your sales funnel. Start with the people involved in managing and working it. Make sure everyone understands what a qualified lead is and that communication is taking place. Review your sales processes, too. What’s happening when people complete a form and after? Is there a handoff between a sales rep and customer experience person? How are deals closed, how are teams onboarded into your software, etc.?
And at all times, monitor how leads are moving through your funnel. Identifying where leads get hung up, where they fall out of the funnel, and where the strongest points are can make all the difference. Furthermore, understanding how your adjustments to messaging, process, and follow-up impact leads’ journey through your funnel is important and will inform where, when, and why future tweaks can be made.
Reviewing the makeup of your sales funnel and constantly striving to refine it can make all the difference in customer acquisition — and retention (remember, first impressions matter, and what happens in the sale funnel impacts those impressions). Which segues into the next recommendation in our SaaS growth strategies list: conversion rates.
Improve Your Conversion Rates
Conversion rate might sound like a marketing term reserved for websites, landing pages, and other advertising, but it extends much further than just those important efforts. Conversion can be thought of as how your entire organization approaches and manages acquiring new customers. Conversion influencers can be quite broad, but let’s explore a few that can be addressed by growing SaaS companies.
First, at the simplest level, consider your position in the market. You have competitors. How do their platforms differ from yours? What motivators are they offering to get people to subscribe to their platform instead of others? Can you compete with it? Can you match it? More importantly, can you offer something better? More compelling? What will drive a prospect to choose them over your platform, and vice versa? Understanding your competitors (which we’ll explore more shortly) can affect how leads move through your sales funnel, where they get stuck or fall out (or decide to stay), and how quickly they can move through it from lead to customer.
Another factor is one that does pertain to marketing and sales efforts. As your subscriber base continues to grow, it follows that business development efforts and communications could be automated. A CRM system that allows you to collect prospects, monitor their progress through your funnel, market to them, track behavior, and more is a worthwhile investment (one that can be stood up with debt financing) because it can give you an actual sales funnel to follow, adjust, and report on.
Following a CRM/marketing automation platform, as more and more customers subscribe, it becomes important to manage the experiences your customers are having. Adding a customer experience (CX) role on your team allows you to assess how customers perceive your product and platform throughout their time with you. Sometimes, this might include sales and marketing tasks, almost as an account manager. The end goal, however, is to gather feedback and work with others in your company to create and implement solutions to address concerns or problems.
Ultimately, these solutions will help you improve conversion rates by keeping your product and offering competitive; automating and streamlining the way people interact with you; and identifying ways to engage with leads to convert them faster and keep customers longer.
Focus On Customer Retention
Another must in our SaaS growth strategies is directly tied to your company’s churn: customer retention. This is a significant topic in every business, and rightly so. While there should and always will be an effort to attract new customers, there should be an even greater effort to retain the customers you already have. They’ve already signed up for what your SaaS product has to offer and are willing to pay for it, so protect the revenue they bring in. You can concentrate your SaaS customer retention efforts in a variety of ways:
- Understand your users. Conduct tests on and survey your customers to learn how they use the software and what their input is. Analyze how they use your SaaS product to determine what’s being used (and how it can be grown) and what’s not (and how it can be addressed or improved). Identify the features of your product that are sticky — features that become part of your customers’ daily work. With more customers using these features, efforts to improve, grow, or expand on them will be well received.
- Understand what subscription means. When people subscribe to your SaaS product, they aren’t just buying its features and functions — they’re buying you. The best SaaS companies develop unparalleled customer experience and support strategies that delight customers. They assist with rollouts, deployments, and onboarding. They configure, customize, and scale the product (when possible) to the needs of their customers — particularly as the customers’ needs scale. Subscription isn’t just a login or download. It’s an experience with the company behind the product.
- Enhance the experience. So the sales and onboarding process went well. That’s great, but one great experience isn’t enough. SaaS companies must continually delight and engage with their customers. Offer discounts, upgrades, or benefits when appropriate. Consider increasing storage or enabling a new feature. Involve clients in testing, and make it easy for customers to provide feedback. Make them feel like they’re part of the product’s development and enhancement.
Maintain Your Competitive Advantage
One of the most valuable elements in our SaaS growth strategies list and your business itself is your brand. It’s what separates you from other competing SaaS companies and positions you in the market. It’s one of the most powerful influences you have on why a customer chooses you over someone else — and why they stay with you.
The term brand has been defined countless ways by countless companies, but a simple way of explaining it is what you project combined with how you’re perceived. There are many factors that contribute to this, but for your SaaS competitive advantage, it can be boiled down to your product, service/support, and customer engagement. These have a sizable influence on your brand and how it’s perceived in the minds of customers, prospects, and the market.
- Your SaaS offering. What service does it provide or problem does it resolve for your customers? How easily does it solve that problem? What effects does it have on your customers’ businesses? How does it look, feel, and function? How easy is it to use? How quickly can it be used? How unique is it? How advanced is it? Does it put other competing platforms to shame, or is it behind the times?
- The service you provide. Service goes beyond who you put on the other end of your support line/chat. If customers routinely come back to you with the same problem, you’re not serving them. Even if your help docs, knowledge base, service team, and other resources are polished and professional, if the customer keeps coming back, there’s a problem. Make an effort to understand what your customers need from you, then get to it. If the product needs to be improved, improve it.
- How you engage. There’s more to the growth of your SaaS than the product alone. As we mentioned, customers subscribe to more than your platform — they subscribe to you. They want to hear from you. They want to engage with you and feel like you’re there if they need your support. They need to rise to the occasion when a challenge presents itself. They also want to provide you with feedback, and your interest in obtaining it and receptivity toward it matters.
Get Going — and Get Growing
Time matters — don’t let it pass without putting these SaaS growth strategies to use. And don’t let capital restrictions stop you. That’s why we’re here. Venture debt financing can help you get the capital you need to invest in sales and marketing efforts, platform improvements and expansion, extending your cash runway until your next VC round, and more. It’s a compliment to every SaaS business model, and it’s faster and easier than many other types of funding. Applying is easy, and funds can be available in as little as a few weeks.
