Strategies You Need to Know to Grow Your SaaS Business
Are you running a SaaS business or a SaaS startup?
Then you must be aware of how stiff the competition is. There are so many SaaS companies now. There is a wide variety in the services and products offered by SaaS companies. You can be sure that a SaaS company is out there offering the same thing that you have.
The question is, how do you promote your business? How do you grow your SaaS business?
This article will discuss the different strategies you can use to grow your SasS startup.
The SaaS Industry at a Glance
Before we go into the details of how you can grow your SaaS business, we need to look at the status of the SaaS market and industry. Is there a future for the SaaS industry at all?
The good news is yes, there is a future for the SaaS industry, and it’s a bright one. Back in 2020, the leading 10 SaaS companies attained a market value that’s more than $1 trillion. For the same year, the median value of the top 50 SaaS companies saw an increase of more than 170%.
Those numbers might be very encouraging, but there’s a critical point. They’re all about the most prominent companies. How about a company that’s just starting? What does the future hold for them?
Well, there’s good news. The SaaS industry is growing by more than 13% annually. The pandemic has not affected that and is set to grow even more.
So, if you are running a SaaS business, all you need is to find the right strategy, and you can expect to see growth.
How to Grow a SaaS Business
Here’s the truth. It’s not easy to grow your SaaS business. Anyone who says it is lying. The competition is tough, and many similar companies are offering similar products. It’s not all bad news. We have pointed out that there are some excellent opportunities in the industry, and it’s an exciting time to be part of it.
Right now, there are three things you should focus on:
- Getting customers
- Retaining existing customers
- Increasing your Average Recurring Revenue Per User
It doesn’t matter what software you are offering. These three goals will remain constant.
First, we will focus on the steps you can take to get new customers. Getting customers is the first and, in some ways, most important step for running your customers. Some people emphasize retaining customers, but you would not have to worry about retaining them if you cannot get new ones.
Here are some proven tactics that you can use to acquire new customers.
Direct selling is the oldest way of selling, and it’s a proven strategy. There’s no mystery about it all. You hire dedicated salespeople, and they contact potential customers.
You don’t have to establish a dedicated SaaS sales team immediately. You can be the first sales team for the product as you talk to potential clients. The goal is to get enough customers to get things started.
If you would like to try direct selling, here are a few ideas that you can try:
Look for a group of potential customers. You can do this on social media, especially on LinkedIn and Facebook.
Research on a job title on LinkedIn of potential clients. “Manager” or “Owner” are possible titles to be targeted.
Use an existing email list for leads.
It is possible to purchase leads and email lists from service providers, but it is not advisable. The regulations concerning contacting people who did not give their permission to be got are strict, and it can cause problems for your business.
Enriching Your List
Once you have a list of leads, the next step is to get more information about your them. You may have the name and the title, but you need more details to contact them. You will need email addresses and phone numbers. If you don’t have the time to get these additional details, you can hire a virtual assistant to do the tasks. There is no standard rate for virtual assistants, and their service can cost anywhere from $1 to $10 per hour.
Contacting the Leads
Once you have an enriched leads list with email addresses, you can contact them. If the list is extensive, it is best to achieve it through automation. You can use a tool like Mailchimp to send out personalized emails en masse.
If you don’t have that many leads, you can contact them individually. Be aware that the average click-through rate for email marketing to be effective should be 2% to 5%. So if you don’t have at least 100 emails, you will have a hard time getting results.
No Right Way
Keep in mind that there is no right messaging to send out for your SaaS business. It’s better to keep in mind the things that you should avoid. You should not be overly promotional, for example. People won’t even open your email if they see some click-bait subject line.
While you are trying to influence them to buy your SaaS product, you need to have some level of sincerity and authenticity to your messaging.
Do not forget to have a call to action on your message. The CTA is the thing that you want them to do. For emails, you can just ask to visit your site and see a demo of your product.
While some will argue that it’s not necessary to run ads to ensure SaaS growth, that’s not true all the time. It might work for SaaS businesses, but even those still run ads. Google ads are the best online ads platform for you to try.
The ads on Google appear on relevant search results. Let’s say there’s a search result for “bookkeeping software” it is possible that the ads there will be for SaaS companies that have bookkeeping software.
The way that Google ads are set up is through an auction. In the example cited before, the companies bid for the keyword “bookkeeping software,” and whoever has the highest bid will appear on the search result for that keyword.
Do you see a possible problem with this process? If you think that it’s the pricing, then you’re right. Because of the intense competition, the prices for specific keywords can go up. The cost is computed as cost-per-click or CPC, meaning you only pay every time someone clicks on the ad. The average cost of CPC now is from $1 to $2. That’s the average; the price can increase if you target a valuable keyword.
The best way to work around this issue is to find a valuable keyword with low competition, meaning few companies use it.
Search Engine Optimization (SEO)
Everyone has heard of search engine optimization (SEO), but not many people understand it. It’s working on a website that would appear at the top results for specific keywords. It’s an important element of a content marketing strategy. For a company with bookkeeping software, the aim is to appear at the top search results for the keyword “bookkeeping software.”
The idea is that the site on the top search result will get the most traffic from Google. So, if your site will help bring a top rank for a keyword used often, you can expect a traffic boost.
Google uses many factors to consider whether a site should rank or not.
One of the most important is the presence of backlinks. A backlink is a link on another site that links back to your site. Google will see it as a vote of confidence in your website. But you can’t just place backlinks on any website. It should be related to your niche. Paid backlinks do not work, and your site might get penalized for having too many of those.
You must have a solid SEO strategy. Ideally, you need someone experienced in SEO to do it properly. Here are some SEO strategy tips that you could start with:
Pick keywords that matter to your niche. Having the right keywords is the foundation of your SEO strategy. If you have the wrong keywords, it wouldn’t matter if you do everything correctly.
The simplest and best way to get into Google’s radar quickly is to publish blogs regularly. Try to post multiple times each week. Don’t post articles for the sake of it. Your content should be relevant and informative.
Get backlinks to relevant websites to your niche. As mentioned before, backlinks matter a lot in SEO. Guest posts are a great way to get backlinks. Just be sure that you are guest posting on quality sites related to your niche.
Running a Referral Program
Another strategy to acquire new customers is to run a referral program. The idea is quite simple, and you will reward anyone who refers a new customer to you. If someone signs up for a subscription to your software, for example, then you reward the person who referred that customer.
To set up a referral program, you need to create links for referrers to promote your site. You can easily track how many customers each person has referred to you and how much reward they should receive.
There are other ways that you can acquire new customers. You should focus on these for now.
Retaining your customers will take a back seat to get new ones when growing your business. But you need to think about how you can keep existing customers. According to some experts, it costs 5 times more to get new customers than to maintain existing ones.
The best way to keep your existing customers is to ensure your products work. They subscribed to your software because it’s a SaaS solution to their problem. It should stay that way and be better when compared to other solutions.
It’s also crucial to maintain excellent customer service, one that is responsive to the needs of your existing clients. Have multiple channels to reach out to you and make sure you reply promptly.
Lastly, you need to ensure customer success.
Customer success is any effort a company makes to help its customers succeed, both with their product and in general. This requires effective customer support after they sign up for your product.
In order to assist consumers get the most out of a product, a customer success team utilizes a data-driven strategy that is both proactive and proactive. That method helps firms attain a variety of key priorities, including:
- Growing renewal sales and income.
- Inspiring consumer loyalty and retention.
- Reducing churn.
By ensuring customer success, it raises the probability that customers will remain around.
You also need to make sure that the process of renewing their subscription is fast and easy. Ideally, you need to offer annual subscriptions instead of monthly to reduce the opportunities for your customers to cancel.
Since this is a crucial part of customer retention programs, hiring a customer success manager may be a worthy investment.
Getting the Most Average Revenue Per User (ARPU)
The average revenue per user is simply the amount you make from each customer. There are several ways that you can maximize the ARPU.
One of the great things about doing business online is that you can accurately track your progress. You should take advantage of that.
There are several channels suggested on how you can acquire customers. Invest in a Customer Relation Management (CRM) tool so you can track how each channel is performing.
Once you have identified the channels bringing in the revenue, you can invest more in those.
How do you determine the price of your SaaS product?
Do you just base it on the price of your competitors and just make it lower than theirs? Do you factor in all the costs?
It’s essential to consider your competitors’ prices and your costs, but those might not be enough. Ideally, you need to do price testing to see how the market would react to your offer. Don’t be afraid to raise your prices.
Upselling will depend on the kind of product that you have. If you can add more features to your products, target the customers who are paying more. They might be willing to try on those new features.
Upselling works because you are in touch with people who have already paid for your product. It means they already know you and trust you. You have a connection with those customers already.
These are some of the most effective strategies on how to grow a SaaS business.
These strategies need time and planning to work. Like any other strategy, the ones listed here are not guaranteed to work. That would depend on how you execute the plan. You can try so many other tactics that you can try out, like offering lifetime deals (LTD) to your customers.