Top 8 B2B SaaS Growth Tips For 2022
Did you know that the average SaaS startup has an annual growth rate of more than 80%?
B2B SaaS businesses are among the fastest-growing, most valuable companies in the world.
But B2B SaaS is challenging. Eighty percent is a tall order.
Your startup can easily fall behind your competitors with one bad quarter of growth. Or maybe it could miss out on a new development that should have helped take it to the next level.
As a B2B SaaS business leader or owner, you need all the information you can get. You need to know all of your possible strategies and options for growing your business.
What works and what doesn’t? Where can your B2B SaaS startup really find success?
To answer those questions, we’ve put together a list of the 8 best B2B SaaS growth strategies that you can explore.
- The “market first, product second” mindset
- Product-led growth
- Maintaining the Rule of 40
- Lifetime deals
- Content marketing funnel
- Demand generation
- Developing a SaaS community
- Moving upmarket
Let’s run them through one by one.
SaaS Growth Tip #1: The “Market First, Product Second” Mindset
SaaS startups spend enormous amounts of time and resources developing their products.
But B2B SaaS businesses can get trapped in a situation where they work too hard to perfect the product and forget all about the actual needs of their target market.
If you want to bring in users, you need to make sure that your SaaS product is meeting a real customer need. You need to ensure that there is an actual demand for it.
Otherwise, no matter how good you’ve designed your product to be, you won’t get a lot of customers.
So put your market first. Know the pertinent problems that your target market wants to solve. Once you do, you can start tailor-fitting your SaaS solution around those problems.
Having a deep understanding of your target market can lead you to two benefits: product-market fit and a potential for a blue ocean strategy.
Product-market fit is one of the most crucial things to establish for a B2B SaaS business. It refers to the extent to which a product satisfies strong market demand.
A B2B SaaS startup with a good product-market fit will have higher revenue, better retention rates, and a lower cost per acquisition.
But how do you establish it?
It doesn’t come from a single great idea or product. It takes continuous research and testing to find what B2B customers really want.
If you have an existing customer base, you can directly ask them about their needs. You can send them a survey. Through it, you can find out what they find most useful about your product and what they wish it had.
Their answers would give you a strong idea of what the current demand is in your target market.
If you’re still getting started and don’t have any customers yet, you can perform surveys or look at your competitors’ customers.
If you want to do the latter, you can start with user feedback.
Sites like G2 and Capterra contain positive and negative user reviews. These will also give you a solid idea of the common problems in your target market.
Blue Ocean Strategy
Competition is a huge part of running a business. That’s especially true in SaaS because the market is growing rapidly.
As a result, more and more SaaS startups are popping out left and right to grab a large market share.
You might liken it to a part of the ocean where there are so many sharks hunting the same prey. Not to sound morbid here, but they fight over their food so fiercely that the water starts turning red with blood.
But then in another part of the sea, there are no predators lurking about. Just schools of fish ready to be caught by whoever gets there first. In other words, it’s a blue part of the ocean.
That’s the principle of the Blue Ocean Strategy. You find a target market that has little or no competition and start dominating there.
But tread (or swim) carefully if you’re eyeing a Blue Ocean Strategy.
If you manage to find an uncontested market, make sure that there is a real demand for a SaaS solution in it. Maybe the reason why no one is competing in that market is that there isn’t any demand there at all.
Don’t confuse an empty ocean for a blue ocean.
But if you’re lucky enough to find many people sharing the same pain points, then maybe that’s your blue ocean.
SaaS Growth Tip #2: Product-Led Growth
Traditionally, a sales team is a crucial part of a B2B SaaS business.
After all, they are the ones who are in contact with the executives and decision-makers. It’s through their talents and hard work that SaaS companies can close deals and bring in revenue.
But one of the trends in SaaS today doesn’t even need a sales team to acquire customers.
It’s called product-led growth.
The product-led growth model, also called the self-service model, is a business strategy wherein the biggest factor for growth is the product itself.
Not marketing. Not sales. From customer acquisition to retention, it’s all about the product.
The reason that it’s trending in B2B is that end-users today are increasingly making their own buying decisions.
Sure, some companies still rely on executives to make purchases for company-wide uses. But end-users now are making the choice to buy SaaS solutions that make them better at their jobs.
They are now doing their own research about the SaaS solutions they need. And sometimes, if they need to, they buy the SaaS solutions using their own money.
If you think a product-led growth model would work for your business, you need to remember three steps:
- Implement a user-based design
- Deliver value as soon as possible
- Sell a paid subscription
Implement A User-Based Design
This part will sound a lot like the first two strategies we discussed. But that’s just because knowing the needs of your market is essential to fostering product-led growth.
Remember that this model has little or no sales effort in place. So you need to have a product that really fits with your target market like a hand in a glove. Keep in mind that you’re trying to build a product that sells itself.
So if it doesn’t sell itself, nothing will.
With the right product-market fit, the value that your product brings to these end-users will be undeniable.
Speaking of value…
Deliver Value As Soon As Possible
The only way that you can successfully sell a SaaS solution is for the user to see the value in it.
And for a product-led growth model that doesn’t rely on sales efforts, users need to experience that value for themselves.
Product-led companies usually start off with a freemium model or a free trial. This way, the customers can use your SaaS solution even without paying for it.
That will serve as your opportunity to deliver value to them.
If you have a freemium product, make sure that the free features are enough to address whatever pain point you are trying to solve.
For a free trial, on the other hand, ensure that they have enough time to explore your SaaS product and benefit from it.
Sell A Paid Subscription
Of course, you don’t stop at giving a free plan or trial. You still need to generate some revenue. You’re trying to run and grow a business, after all.
You still need to set up a strategy for converting your free users to paying customers.
That’s easier for a free trial. Assuming your free users have already seen the value of your product, all you need to do is to ensure a smooth transaction and billing process.
For a freemium model, you need to make the right balance between delivering value and selling an upgrade.
Sure, you need to provide enough free features to show the value of your SaaS product. But if you give all of them away for free, your customers would just stick to the free plan even if they themselves grow exponentially.
If you want to sell a paid subscription, you will need to make it worth upgrading to.
But growing companies with bigger needs will have to upgrade for a paid subscription if they want to scale the functionality of these products.
SaaS Growth Tip #3: Maintaining The Rule Of 40
For most B2B SaaS companies, fast growth is possible through investments or venture capitalist funding.
You secure a big load of money that you can use to expand your marketing, sales, and other departments necessary to develop your product and get more customers.
But venture capitalists don’t just throw their money at any SaaS startup that comes asking for funding. Remember that they are in it for the return on their investment.
They need to know that their money would grow. So if you’re seeking venture capitalist funding, they need to be confident that your SaaS business would grow.
One of the key standards they look at is the rule of 40. It is a valuation guideline that considers both the growth and profitability of a SaaS company.
The rule of 40 states that a healthy SaaS company’s growth rate and EBITDA margin should sum up to at least 40%.
Venture capitalists generally use this benchmark to decide whether or not a SaaS company is worth investing in.
So if you’re looking for funding, make sure that you have enough growth and profit to make it to the rule of 40.
SaaS Growth Tip #4: Lifetime Deals (LTDs)
While a lot of B2B SaaS businesses turn to venture capitalist funding in order to grow, others take another route.
Some SaaS businesses choose to be less reliant on investors and just take their growth budget out of their own revenue.
This is called bootstrapping.
The Dilemma Of Bootstrapping: Slower Growth
Bootstrapping means you are reinvesting your profits in order to grow. This makes you independent from investors.
However, this can be a very slow process compared to getting funded by venture capitalists. After all, your growth would be limited to your profit margin only.
Compare that to getting financed and receiving hundreds of thousands of dollars in one fell swoop.
But what if I told you there’s a way you can bootstrap and still get a hefty revenue in a short period of time?
One of the best ways you can do that is to offer a lifetime deal.
Lifetime Deals: Potential Boost In Revenue
Offering a lifetime deal means that you’re selling lifetime access to your SaaS product.
Of course, that implies a higher one-time payment. But that’s exactly what would attract your potential customers. They’re only going to pay once instead of monthly or yearly.
Just a fair warning, though. The revenue you generate through a lifetime deal won’t be added to your recurring revenue. Your customer lifetime value (CLV) for these customers stops with those one-time payments.
So it’s really important to reinvest that revenue so that you could have subscription-based users. As for the LTD customers, you can still convert them into subscribers down the road.
But how do you even start offering a lifetime deal? How do you let people know that you’re offering perpetual licenses for your product?
Offering Your LTD To A Wide Audience
These sites already have an established following that is looking for the best deals on SaaS products. Offering your LTD through them will get you instant access to that wide audience.
What’s more, if your SaaS solution passes AppSumo’s evaluation, they can market your product for you. They feature it in their newsletters and even their YouTube channel.
Yes, they will create a video that features your product.
The only tradeoff is a weighty commission of 70%. Still, a lot of SaaS companies think it’s worth it, considering the revenue they actually made.
Let’s talk about one of them.
SaaS Bootstrapping Through LTDs: Raising $140K In Two Weeks
HeySummit is a SaaS solution that enables its users to run online events and conferences.
Sometime after its product launch, this SaaS startup offered an LTD in AppSumo. And in just two weeks, it raked in a whopping $140,000 in revenue.
But the moneymaking did not stop there. That sudden surge of revenue resulted in $100,000 added to its ARR.
SaaS Growth Tip #5: Content Marketing Funnel
Content marketing is one of the most potent marketing strategies for B2B SaaS today. It involves creating blog posts, videos, graphics, or any form of content that can educate your target market.
It is the perfect way to reach B2B audiences because these people are actively seeking and consuming information that can help them be better at their businesses and jobs.
If you successfully deliver relevant, reliable, and engaging content to your target audience, they will trust your brand.
Eventually, that will turn into trust in your SaaS products. Still, you can’t just produce a piece of content and say that it’s for everyone. For your content marketing efforts to be more effective, they have to be targeted as well.
To get started you can create a content marketing funnel with four stages:
At the earliest stages of the buyer’s journey, your potential customer is unaware of your brand yet. But they do recognize pain points and problems in their business. Most likely, they are looking for content that could help them solve those problems.
So for this stage, your primary goal is to educate them. Don’t talk about your SaaS product yet. Making your content sound like a sales pitch may just put them off instead of attracting their attention.
For this stage, attention-catching content types such as blogs, videos, infographics, and social media posts would do nicely.
Make sure that your content pieces for this stage are reliable, relevant, and engaging. After all, this is your very first introduction to your potential customer.
If you want them to be your customers one day, you need to make a good first impression.
This stage is somewhere in the middle of the buyer’s journey. It’s where your prospect is already deciding whether or not your SaaS solution is a good fit for their needs.
For this part of the content marketing funnel, your main goal should be to show what your SaaS product can do.
So at this stage, the best type of content is those that would build trust with your potential customers and feature your SaaS solution’s capabilities.
Those include case studies, white papers, and interactive tools if you have some. You can also invite them to your webinars and events.
Now, this is where your content can start sounding like a sales pitch.
At the conversion stage, your primary goal is to get them to buy your product. You want them to see that your SaaS solution is the best tool to address their pain points.
To do that, you can produce content types like product comparisons and listicle articles.
For example, you have a sales automation solution. You can post an article with the title “10 Best Sales Automation Software in 2022.”
Of course, you’re going to put your own solution at the top of that list. But you need to pack it with strong reasons why you deserve that top spot.
What’s more, you can add call-to-action buttons to your articles. This makes it easier for your readers to go to your website and buy your product.
SaaS marketing is not just about acquiring new customers. It’s about retaining them as well. So you should also produce content designed for these existing customers.
For this stage of the content marketing funnel, you can use tutorials, FAQs, webinars, and more. But the content would be centered around helping your users troubleshoot or maximize your SaaS product.
SaaS Growth Tip #6: Demand Generation
Demand generation is a B2B sales approach to educate your prospects on pain points that they may be experiencing.
From the term itself, it’s supposed to create demand for your product. It’s also responsible for nurturing B2B leads to eventually convert them into paying customers.
So how do you do that?
First, you can leverage your early-stage content marketing pieces. Remember that demand generation is about educating and entertaining your potential customers.
Another method is by using paid ads. While you can use free methods like SEO and social media. You can’t be completely sure whether or not they would be visible to your target audience.
Utilizing paid ads like pay per click (PPC) or social media ads can be an effective shortcut to being seen by your potential customers.
SaaS Growth Tip #7: Developing A SaaS Community
Having a well-built SaaS community can help you foster brand loyalty and even generate leads more effectively.
But the first and most important thing to consider is the purpose of the community that you will build.
Sure, the ultimate goal is to grow your B2B SaaS business.
But your specific objectives will determine what activities and what types of content you will bring into the group.
Common uses for SaaS communities include the following:
- Peer-to-peer support
- Loyalty building
- Lead generation
The most common use for SaaS communities is for customer support.
Users would post the problems that they’re experiencing. Then other users who have gone through the same issues can share their solutions to the problem.
But the group support can go beyond just troubleshooting issues. The members can also share tips and guides on how to maximize your SaaS product.
If they know how to use all of your SaaS solution’s features, they will get more value from it. And that would make them happier and more loyal.
Speaking of fostering loyalty to your brand…
As a B2B SaaS company, you obviously want to build brand loyalty among your existing customers.
But here’s the thing: it doesn’t happen overnight. Growing brand loyalty among your customers takes a lot of time and effort.
That’s why you need to be consistent in making your SaaS community active. You can share relevant content, initiate interactions, and facilitate conversations.
If you do it right, you can build your relationships not just between you and your customers. You can also nurture their relationships with each other.
Imagine creating a culture shared within your customer base. Your users identify with your brand so much that they become fierce advocates for your SaaS products.
Having a healthy SaaS community can also help you generate high-quality leads.
We just discussed how brand loyalty will turn your customers into advocates. So it should be of no surprise that they can help you find new prospects to grow your B2B SaaS business.
Being advocates, they will likely tell their friends and colleagues about your SaaS product. When any of those new people show interest, your advocates can simply add them to the group.
Boom. Instant high-quality lead.
At that point, you can start reaching out and eventually sell your SaaS solution to them.
SaaS Growth Tip #8: Moving Upmarket
Last but definitely not least, let’s talk about moving upmarket. Essentially, it’s the process of shifting or expanding your target market from small and medium-sized businesses (SMB) to big enterprises.
Before SaaS existed, the ideal target market for B2B solutions was large enterprises. After all, they were the only ones who could afford the necessary IT infrastructure needed to run
B2B software at the time.
You see, all B2B solutions during those times were hosted on-premise. Businesses had to have physical servers in order to run the software and share their data within the whole company.
But then, SaaS was born.
Cloud hosting was finally possible. Small businesses and large enterprises alike saw it as a more cost-effective and more scalable way of running B2B software.
The SMB Target Market
For the early SaaS companies, the small and medium-sized businesses (SMBs) became a viable target market.
SaaS startups sold their products to other startups. And it led to massive growth on both sides.
But as the SaaS companies grew, they eventually scaled their products to accommodate even the huge companies. They moved upmarket.
The Enterprise Target Market
Despite the viability of selling SaaS products to SMBs, enterprises were still the dream customers for SaaS companies. At the end of the day, their longer-term contracts offered higher customer lifetime value to SaaS businesses.
That’s true until today.
Sure, as a fledgling B2B SaaS business, you can only offer smaller plans. But as you grow and scale your operations, moving upmarket is still more profitable.
Remote Work Setups Leading To Increased Demand For SaaS
When the pandemic started, it forced businesses to take their operations online.
ALL kinds of businesses.
Whether they were SMBs or enterprises, employees had to work from home. Meetings were over Zoom. Departments relied on cloud solutions to stay cohesive.
And that led to rising demand for SaaS solutions.
In fact, some businesses are planning to retain their remote working arrangements even after the pandemic. That means they will continue to use SaaS solutions for the foreseeable future.
And now that even large enterprises rely on SaaS solutions, you can take this opportunity to move upmarket.
Not to say B2B SaaS businesses aren’t viable for SMBs. They certainly are.
But B2B SaaS companies looking for rapid growth should take advantage of the growing enterprise market before competitors do.
Final Thoughts About B2B SaaS Growth
Building B2B SaaS products is tough. The competition can get pretty intense out there.
But if you do it right, it can also be extremely lucrative.
With the right strategy, you can create a B2B SaaS product that meets a huge demand in your target market. And you can build a business that scales exponentially.
For more guides on growing your SaaS business, visit our SaaS marketing blog here.