SaaS is the most agile form of the software industry that is making a mark in the business world. For the past decade, there have been many experiments going around in the SaaS industry. What works and what doesn’t depend on many factors. There is no set standard, yet that is working for all.
Since SaaS is the newest and fastest-growing industry and is based on a subscription model, the game has been completely revolutionized. Companies can no longer apply traditional growth strategies and expect the same growth as traditional tech companies had incurred.
Where concepts like customer lifetime value, recurring business, and customer retention have become important aspects to look upon, there is a need to govern modern companies with a completely new outlook.
If you understand this game’s nuances and apply revolutionary ideas to your business, your growth would be inevitable.
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One question that most SaaS founders face is how fast is fast enough for growth? What is the benchmark they should set for their company’s progress? They have to take into consideration many factors that affect as well as follow their growth trajectory.
The investors’ interest in your company and your company’s valuation for a high-potential acquisition are few of those factors. Higher growth in the top-line revenue is the direct predictor of the value of the company. So the obvious question, at what rate must a company grow its top-line revenue for high growth?
For any SaaS startup to become a Unicorn in their niche, they have to do the following:
This is the path any fast-growing company must follow to reach the billion-dollar valuation in a few years. Simple? Obviously not! It is easier said than done. Continue to read the strategies you would need in place for such ambitious growth.
As I said earlier, there is no set standard for high-growth SaaS companies, yet there are few common features that each of them has adopted. Those features help them build an impeccable business from all ends. So, let’s look at them individually.
If you are into the SaaS business, then adopting customer success becomes indispensable. It can be adopted in various ways: a strategy, a business unit, a value or philosophy, or a department.
Becoming customer-centric is a crucial element for any successful SaaS organization. This can turn out to be a solid competitive advantage because only by building relationships with your customers, you can shield them from getting churned. And for a business with a greater dependency on its top-line revenue on recurring business, it is a must to retain customers for the long-term.
If you will search for the benefits of customer success, then you would find myriads of responses. But let me assure you that all those points are “how’s” of customer success. When it comes to “what” of customer success, meaning towards what end is customer success useful, there are only three benefits. And they are the most important ones.
Only by retaining your customers can you expect growth in your recurring revenue from their renewal of a subscription. Customer success is mostly about strategies you can implement to help them gain value from your product to continue to do business with you.
Another source of revenue and benefit of customer success is expanding your current customer accounts through upgrades or cross-sell. This customer success strategy spans to the product management department as well because companies need to continually upgrade their products to add more value to the customers and generate more business.
This is the point when you have become so successful in gaining the loyalty of your customers that they turn into your brand advocates. There is a whole science behind how to turn your customers into advocates through customer success. This attracts more prospects to your sales funnel and leads to effective marketing without any spending.
When you are running a startup, you must know well the right methods to measure your performance. Through this, you can create the right strategies for high growth by setting the right benchmarks.
Every business has a specific set of KPIs that suits its context. Few measure it through Annual or monthly recurring revenue, while others use churn rate, etc., to keep a check on their performance. Only by using the right metrics can you set the right goals for your firm.
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You must build SMART goals for your companies that comprise of the following elements:
This is another strategy for a high-growth path. This comes from the marketing domain. Apart from your own marketing strategies, you should also build a strong network with your channel partners.
Partnering with other businesses who are not your competitors but in a similar niche can help you increase your customer base. Before approaching the channel partners, you must define the product-market fit and list out all other vendors who are in the relevant businesses.
While selecting the partners, you should know how to choose the right ones. Check upon their growth stage and their market segment. They must be relevant to yours. You must also know which ones to avoid for any specific reason like a mismatch of offered solutions.
For any partner to work with you in the long-term, there has to be a symbiotic relationship between you both. It can mean either sharing the revenue or providing a free subscription of your product to them. Whatever the cost involved in making them your channel partner, you must sort it out in the initial stage to check its viability from a growth viewpoint.
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When it comes to high-growth SaaS strategies, product-led growth is one of the proven methods towards it. It’s the strategy when you place your product in the center to drive your business growth all by itself.
You must identify the growth levers within your product and give your customers ways to get more engaged with the product. Using freemium or free trials is one strategy that allows your product to sell itself.
In a highly competitive SaaS market, the customers need to find value from the product sooner than later. By allowing them to use it before they purchase, you can give them a clear picture of how beneficial your product would be in their business context.
Companies like Zoom, Slack and Dropbox have adopted a product-led growth strategy that has shot up their business to a whole new level. This is a great strategy for leading product adoption, all by itself. Offering a free version allows the user to get used to the product’s basic features. And when they want higher features, they have to upgrade themselves to the paid version.
The best case-study for your product usage is your own company. You must demonstrate the value of your product by first putting that into use in your own context. By showing the growth indicators through your product, you are not only instilling confidence in your prospects, but you are also demonstrating the prowess of your brand and product.
Companies like Salesforce have used their product to show to the customer how effective it is in providing value. There is no better proof of a customer succeeding by using their product then themselves. By providing and using one of the first cloud-based CRM software, they have set an example for the rest of the SaaS companies to follow.
The keys to high-growth are adopting a customer-centric approach along with other marketing tactics. Measuring your performance is another strategy through which you can keep your business on track. Aspiring to becoming a unicorn needs revolutionary ideas in all units of business.
Your marketing efforts must expand from being a single channel, your own, to having multiple channel partners. Your product should be flawless to drive business growth on its own. And last but not least, you must love your product to such an extent that you become your own first customer to demonstrate the exceptional value the product brings to your business.