How to Grow Your SaaS Business

July 28, 2024

For those that don’t know what SaaS is, a SaaS business or company is a company that hosts an application and makes it available to customers over the internet. SaaS stands for Software as a Service. This infers that the software sits on a SaaS company’s server while the user accesses it remotely. SaaS customers usually pay a subscription fee— often monthly — to access the application.

A SaaS growth strategy has to cater for the following main aspects:

SaaS Lead Generation: Lead
generation is the process (or set of processes) that a SaaS decides to
implement in order to generate leads. Lead Generation is further split
into Inboud and Outbound lead generation.

Saas Lead Conversion: Lead conversion is the next step following lead generation. Lead conversion can be broadly split up into two main steps:

Visitor to SaaS sign-up
Sign-up to paid customer

The
reason why you should split these two different conversion points is to
be able to capture statistical data that can shed more light as to
where improvement is required. For instance, if you are getting a poor
visitor to SaaS sign-up conversion rate it can be:

you are not getting targeted traffic
you are incorrectly addressing your audience’s pain points
your messaging is not compelling enough

Whilst
if you are getting a fairly good visitor to SaaS sign-up conversion but
then failing to convert those sign-ups into paid customers, then you
might need to double check:

your SaaS for any bugs
for any missing features
for feedback from existing users
about rearranging your sales funnel

Customer Retention: Unlike,
acquiring and conversion, retention is a topic which is given less
importance. Whilst there is a lot of literature on how to acquire leads
and how to convert them into customers, very little is said and done by
SaaS to retain those hard-earned customers. Such a biased situation does
no justice to retention as a topic. SaaS companies should constantly
monitor retention rate as it indicates whether:

solution provided is really solving the pain points of the customers
customers being acquired are of good quality
customers can afford to pay for the solution provided
SaaS is properly marketing itself, clearly showing what it can do for its clients

Needless
to say, having a very low retention rate is not healthy for any SaaS.
It might mean that all the efforts done to implement lead generation
strategies and customer conversion go down the drain as once customers
convert are vanishing.

There
are various strategies that SaaS companies can implement to help
increase retention. In this section, we aim to cover a good number of
these strategies.

SaaS Referral Marketing: Most
SaaS companies completely miss the referral marketing step. We are
going to use this section to educate about what a grave mistake these
SaaS companies are doing. If you had to ask any founder or marketer in
any SaaS company whether referrals are important for their SaaS, they
will all nod and state that referrals are super important. But then when
it comes to acting on referrals, most fail to.

Most SaaS companies focus on acquiring, converting and retaining customers and stop there. From our experience, we attribute this to:

Lack of education on how important referrals are
Not knowing how relatively easy it is to extend your funnel to get a referral campaign integrated
Thinking that they have to redo / completely change their way of doing acquisition, conversion and retention
Not knowing how valuable referrals are and how easy it is to convert them and retain them

Depending on the area that you want to fix/focus on more there are various strategies / tools that can help you out. I am going to highlight some strategies here.

– Strategy #1: Spy on your competitor’s content strategy

Creating a perfect content marketing strategy for your business begins with understanding the audience. An article getting shared across various social media platforms implies that the content was well received. However, you will get a lot of clues by simply keeping an eye on how your competitors are handling their content strategy and to respond accordingly

– Strategy #2: Convert Website Visitors with Exit-Intent Campaigns

What if you can detect those leaving your SaaS website and give them an incentive not to leave? Visitors might leave your SaaS website for various reasons:

The message is not clear
The offer is not compelling enough
Pricing is not clear
Or your visitors simply don’t have enough time to go through your content and educate themselves about your solution.

What if you can make their effort worth it by offering them a special discount or a free consultation?

– Strategy #3: Offer annual pricing

Most SaaS require more than a month to be able to show the full potential of what they are capable of doing. At EarlyParrot we do referral marketing (explained later on in the referrals section). It is very hard for business to get the full potential of referrals in just 30 days. Hence we, bundle a number of good incentives, not just a discount, but also a list of services, such as free onboarding and integration and strategy calls to encourage our customers to jump on an annual plan.

By converting customers to an annual plan, you will have plenty of time to focus on providing long term value, rather than focusing on making sure customer renews their subscription the upcoming month. Selling monthly is very hard as most churn because of lack of understanding your SaaS and how valuable it is.

– Strategy #4: Reward stacking to help in SaaS customer acquisition and retention

The main purpose of any referral marketing campaign is to acquire new users/customers. But if played well, a referral strategy can help in both acquiring and retaining existing SaaS users.

See how Dropbox gave away 500mb of free storage per new referred users. These rewards were attractive enough to make Dropbox go viral. But that was not the only benefit Dropbox got out of it. Owning an upgraded Dropbox account, with plenty of bonus storage space for referring several users to Dropbox, offers plenty of reasons why one will stay using Dropbox and will not switch to a competing service.

When designing a SaaS referral marketing campaign, make sure that the rewards you give out are stackable. Stacking rewards will keep making it attractive to refer more and more friends but will also help in drastically reducing churn, building a resilient user base that will not switch to a competing service that might come along in the future.