SaaS Growth Strategies That Will be Propelling Businesses Forward in 2023
It is projected that cloud-based services worldwide will have about 30% revenue growth by 2024. This seems to be an optimistic outlook for SaaS, considering that it’s the major segment of the cloud solutions market. The important thing, however, is to build a robust strategy to achieve this ambitious goal – and make sure it’s your company, not your competitor’s, that gets the most of this opportunity.
In this article, we’ll give you a list of the SaaS growth strategies that seem to be the most promising in the wake of current business challenges. In addition, we’ll look at several detailed stories of different SaaS businesses that are already adopting these strategies. This will give you an example of how these ideas can be implemented and what results they can produce.
What is a SaaS growth strategy?
It’s a structured plan of marketing, sales, and other activities that are interconnected and work as a whole towards the ultimate goal – to ensure the business growth of a SaaS company and create new opportunities for expansion and development.
The list of most promising SaaS growth strategies to consider
Here we’ve gathered several strategies that address the most pressing challenges facing SaaS businesses today, such as accelerating customer acquisition and democratizing data-driven decision-making. All these strategies can be customized according to your specific product, market niche, and other factors.
- Leveraging data analysis to make better decisions
- Focusing on audience growth and retention
- Adopting smart pricing to stay competitive
- Automating and optimizing processes
- Expanding the set of marketing and sales channels
Let’s now dive in and explore these SaaS growth strategies in more detail.
Leveraging data analysis – a crucial factor for SaaS business growth
Data-driven decision-making is not just ubiquitous buzz-words. It’s a vital strategy that will benefit your business enormously, both short-term and in the long run. The raw data you collect across your organization contains valuable insights and answers to many pressing questions you might have. So, focusing on data analysis, you can tap into the potential of your data and put it to use. This will allow you to uncover hidden issues and spot new opportunities, providing full transparency and a rigid basis for informed decisions.
Making a SaaS company data-driven can include:
- Data visualization. This is a powerful instrument that allows you to transform raw data into compelling visual stories. In this format, your business data will be easy to interpret, monitor, share, or present. Be it various graphs or advanced comprehensive dashboards – when visualized, your numbers will clearly show you emerging trends and correlations.
- Data automation. Streamlining your data flows and automating repetitive tasks can significantly boost efficiency. It saves time, eliminates human errors, and helps to manage data with minimal effort. This can be achieved by using various automation solutions – from simple tools to complex custom-developed platforms.
- Business analytics. By processing and analyzing your historical business data, you can better understand how to improve performance and achieve the goals you set. Business analytics allows you to build forecasts for the future and transform the obtained insights into clear action points.
- Setting up data infrastructure. Investing in infrastructure is important to companies that work with huge amounts of data. They will need to ensure efficient storing, hosting, and processing of data. These goals can be achieved by setting up an analytical system, data warehouse, custom BI solution, and so on.
- Working with a data consultancy partner. Companies wishing to benefit from data analytics often run into typical roadblocks. They collect massive amounts of data but have difficulties interpreting it and deriving meaningful conclusions. In such a case, requesting data consultancy services from a knowledgeable partner may be an efficient solution. A company that specializes in data analytics can help you set up the tools and processes you need. Such a partner can also give your team the necessary directions to help manage data independently in the future.
Which of these aspects are the most relevant for your business depends on your product, goals, company size, etc. If your SaaS organization is a small or medium-sized one, it’s possible that you won’t need a whole data analysis department or complex data analysis infrastructure. However, even using some simple tools and efficient processes can be enough to make a big difference and provide you with valuable insights derived from your data.
Example: implementing a data-driven approach to enable SaaS growth
Nextiva is a SaaS company that provides business communications collaboration software and helps businesses to be better connected with their clients. The product is actively developing – this year, it received an impressive set of new features.
After the update, the team faced several business challenges:
- To adopt a new pricing model and increase revenue
- To persuade the existing customers they should switch to the new pricing
- To expand the audience and attract new customers
However, despite the efforts, the adoption rate was growing relatively slowly. The steps devised by the team weren’t bringing the expected effect. The reason for this was the lack of relevant data to back up the strategy.
The team decided to revise their plan, focusing on a data-driven approach. In particular, they used data analysis to adjust their SEO and content strategy. This included:
- Using Google Analytics and PowerBI to determine which of the relevant pages on the Nextiva’s website had a high bounce rate
- Conducting research with seoClarity to determine the proper keywords and topics to target in new pages
- Using the results of this research to understand how to adjust the content and SEO strategy
The conducted data analysis provided Nextiva with the necessary insights for refreshing the website content. As a result, the team split the pricing options into three different tiers, updated the pricing page, and improved content on multiple other pages on the website. Once this was done, the company’s pricing pages started ranking better for terms related to the cost and pricing of the software features.
As a result of these efforts, the updated content and SEO strategy yielded the following outcomes:
- An improved Google SERP positioning for targeted feature and pricing keywords
- An 8% increase in the number of leads for the new software approach
- A significant growth of the updates from the existing customers who now better understood the value of the updated product
All this enabled Nextiva to increase the MRR and expand the customer base, opening new opportunities for SaaS business growth.
Focusing on audience growth and retention
SaaS business growth would be impossible without loyal customers. So, predictably, an effective SaaS growth strategy should include action points focused specifically on the audience. The main challenges are expanding the customer base and minimizing the churn rate.
- Personalized approach remains one of the crucial factors for developing a successful acquisition and retention strategy. You may need to conduct additional research on your audience, create buyer personas, and define criteria for dividing your potential and existing customers into distinctive groups. This will allow you to come up with a tailored engagement strategy for each segment. With a different value proposition, messaging, and content for each target group, your organization will be able to increase the quality of leads and significantly improve retention.
- Another thing to focus on is making the most out of your existing customer base. Research shows that selling to existing customers is much easier and significantly less expensive than selling to new users. However, it’s not just about upselling. For example, you can launch a referral program or a promotional campaign urging your customers to recommend your product to their colleagues or vendors. Your existing audience can also be an invaluable source of insights. Find out what features your users miss and exactly what problems they solve with your SaaS product. The obtained information can give you an impulse to develop your service further and deliver even more value to your customers.
Providing additional value is one of the key factors in improving retention. It can take different forms: from improved functionality to a new channel for customer support or useful informative content in your blog.
Example: driving retention through data automation and analysis
Tradezella is a SaaS product that helps traders track and analyze their activity in order to improve performance. It allows them to accumulate data on their past decisions, spot risky patterns, and determine promising opportunities. When the product was still rather new to the market, the team ran into a blocker. While the acquisition rates looked optimistic, the churn rate was high, and re-engagement efforts seemed to produce little effect.
To improve the situation, they needed to focus on such challenges:
- To re-engage existing users, improve retention and bring down the unsatisfactory attrition rate
- To analyze how users go through the funnel and determine at what stages precisely they drop out
- To segment the audience into several distinctive groups in order to personalize content, offers, and marketing activities
In collaboration with Coupler.io’s data analytics consulting experts, the Tradezilla team was able to:
- Clearly define different stages of the funnel and determine criteria for analyzing user journey
- Automate data flows from their app to the database and set data processing in BigQuery
- Build a comprehensive self-updating SaaS dashboard in Google Sheets (based on processed data pulled from BigQuery)
With the help of automation, data analysis, and data visualization, they received the necessary instruments to improve the situation. Tradezella’s marketing team was able to closely monitor user activity through self-updating reports and dashboards in Google Sheets. This enabled them to prepare customized messages and offerings that varied depending on a specific funnel stage for a given user.
As a result, user retention and engagement significantly increased:
- 2.5 times more users reactivated in the first month after implementing the changes (compared to previous monthly results that year).
- The activation rate after signup increased from 28% to an impressive 65%.
The improved activation and retention rate helped Tradezilla to significantly grow its customer base. As a result, with the influx of new users, the company’s revenue increased. The existing reactivated users also contributed to the MRR growth. At the same time, the implemented changes in data management and audience monitoring provided the foundation for further business growth.
For more details, please view the full case study.
Adopting smart pricing to stay competitive in the SaaS market
It’s difficult to overstate the importance of pricing in a business growth strategy in SaaS. If the price is too high, an organization will be losing customers. If the price is too high, an organization will lose customers. To stay competitive, it’s crucial to find the right balance. As the SaaS market continuously shifts and changes, revising the pricing strategy is an ongoing process. Continuous competitor analysis and market research should be a mandatory part of any SaaS growth strategy.
A good approach is to treat each segment of your audience differently and develop several pricing options. They can be offered as separate tiers that offer different sets of features or different levels of access to your SaaS product. For example, occasional users probably won’t be ready to pay as much as people who rely on your product on a daily basis. At the same time, customers who use your product for business purposes will be inclined to pay more than those who need it for personal use. You can analyze your historical data to determine typical usage patterns and see how they evolve over time. Then you will be able to decide how your pricing strategy can reflect the changes to facilitate SaaS business growth.
Example: increasing revenue through analyzing usage patterns
Mailtrap is a popular SaaS product for email testing, mainly used by software engineers and QA teams. Over the years, the company experienced exponential growth, and the complexity of its data flows grew as well. At a certain point, the team decided to revise their pricing model and stop offering a freemium plan. They wanted this revision to be a data-driven process. But with the complex and inefficiently managed data flows, turning data into action points wasn’t a simple task.
To solve this issue, the Mailtrap team partnered with Coupler.io. This collaboration allowed them to benefit from data analytics expertise, which they didn’t have in-house. The solution included:
- Establishing automated data flows and efficient data management processes
- Gathering all data in a centralized BigQuery database and processing it for further use
- Analyzing how different groups of customers used the product – what features they needed, how often they used them, etc.
- Modeling several scenarios predicting how the change in pricing would affect user behavior
- Determining the new pricing model based on these scenarios
As an outcome of the steps mentioned above, the company was able to streamline its data management processes and enable data-driven decisions. The deep analysis of user behaviour allowed them to come up with the optimal pricing strategy. Shaping data-based scenarios for the future provided an opportunity to access possible risks and make informed choices.
The new pricing plan was a success:
- About 20% of free users upgraded to a paid plan
- The overall MRR increased by 466% in the course of 3 years after launching the new pricing model
Once the new plan was launched, the company’s revenue started growing rather quickly. However, it’s important to point out that the adopted changes were fundamental, and as such, they produced a long-term effect. The MRR has been increasing for the next several years, eventually reaching +466% compared to the revenue with the old pricing.
The implemented solution allowed Mailtrap to make their organization data-driven. This, in turn, affected the company at many levels and created new opportunities for business growth even besides changing the pricing model.
With extensive data analysis and efficient data management tools, Mailtrap could make better decisions in many different areas. . An example of such a tool is a comprehensive self-updating dashboard in Google Data studio. This is yet another result of the company’s collaboration with Coupler.io’s team. This visualization is powered with data from BigQuery, automatically collected from multiple data sources across the organization. The dashboard includes hundreds of tabs with various charts and visualized reports. The Mailtrap team uses it to revise and adjust their pricing strategy, as well as to obtain insights for other business decisions.
For more details, please view the full case study.
Automating and optimizing processes to enable scalability
An efficient SaaS growth strategy should include a distinct vision for the future. What are you going to do when your company, indeed, achieves the expected growth? Or, maybe, even more than expected? Rapid growth comes with new challenges, and it’s better to start preparing for them in advance. At a certain point, you might need a whole department where you have just one employee now. Workflows that were fine for small teams, may start failing you when the team gets bigger.
To address these risks, make sure your processes are designed with scalability in mind. In other words – standardize, automate, and optimize. Process automation allows businesses to minimize human errors, streamline workflows, and quickly scale teams. When every process is robust, fully transparent, and efficiently automated, it’s easier to onboard new employees and synchronize team effort. You can bring automation to different areas of your organization – marketing and sales, customer support, accounting, maintenance, and others.
Automation can take many different forms – from complex custom-made platforms to simple tools. You don’t necessarily have to go big from the start. You can begin by assessing your needs and introducing a set of relevant tools and apps that can help you. For example, this can be automating sales processes with Pipedrive, creating automated workflows in Airtable, or automating reporting with Coupler.io. The effect from the automation in different areas will build up, significantly increasing your company’s efficiency and scalability. Business optimization is an ongoing process. So it’s important to have a clear roadmap and keep revising your operations to be ready for future growth.
Example: automate reporting and save thousands of hours for your team
Preparing various reports is a common regular activity for SaaS companies. Sales, marketing, advertising, accounting – reports are everywhere. This task can be easily automated, which will save you an enormous amount of time. Additionally, it will increase efficiency by eliminating human errors.
To introduce this automation, you will need a data integration solution, such as Coupler.io. It can help you automate data flows in your SaaS company. In particular, you can use Coupler.io to create automated reports and have them updated without any involvement from your team.
The process is rather simple. Select as a source the app where you accumulate fresh data on a regular basis – for example, HubSpot, Pipedrive, Mailchimp, and so on. Then, select a destination – where you want your data to land. For reporting purposes, it’s convenient to import data to Excel or Google Sheets. If you want to perform complex analysis, you can select BigQuery as a destination – and, if needed, then transfer processed data to a spreadsheet from there.
After this, you will need to select a data type for exporting – for example, marketing campaign results. Additionally, you can set up a schedule for automated updates. Coupler.io will regularly fetch fresh data from the selected data source to the specified spreadsheet or database. When the marketing campaign results change, the metrics in your report will be updated during the next scheduled refresh.
Once your data is in Excel or Google Sheets, create a report template on a separate sheet and link it to the sheet with your data. Then, you can select the parameters you need, calculate custom metrics with native functions and formulas, and more. Alternatively, you can turn your report template into a dashboard using Excel’s or Google Sheets’ in-built features. It’s also worth mentioning that Coupler.io allows you to accumulate data from multiple sources in one place. For example, your marketing team can gather in one report information from Mailchimp, Google Ads, LinkedIn Ads, Airtable, and so on. They’ll just need to set a separate integration for each data source. View the full list of the available sources to see which of your most-used apps are included.
When everything is ready, you will get a self-updating automated report or dashboard. Your team won’t need to collect and manipulate data manually anymore. Once built, the report will always stay up-to-date, providing you with the most important highlights based on the latest data.
The same process can be used to back up your data from different apps. Your team can set up an integration, and Coupler.io will automatically transfer information from your data source to BigQuery or a spreadsheet. Thanks to the automatic data refresh function, the backup copy will always be up-to-date.
From this example, you can see how relatively simple automation can be a powerful instrument that boosts efficiency and optimizes processes. It also facilitates growth in several ways. First of all, it frees hundreds of hours for your team. This time, previously spent on repetitive manual tasks, can be reallocated to more meaningful activities. It can be used for performing analysis, planning, and acting on your data faster. All of this is an investment in further growth. Secondly, automation streamlines processes and makes them easily scalable. If you want to add a dozen new data sources to your reports, it’s enough to connect the new apps to the existing template. Data from them will be included automatically. Your team won’t need more time or more people to handle the reporting from these additional sources. Without automation, such a situation could have created an increased workload slowing down a company’s growth. Automation, on the contrary, allows you to accelerate it.
If you take it a step further and opt for a bit more complex automation, the outcome may be even more impressive. For instance, see how a no-code agency XRay.Tech used automation to reduce 1 hour of paperwork per client to just 10 minutes. Although this company is not a SaaS business, their experience can still be relevant. The processes and challenges described in this particular case are quite common for any growing business.
Expanding the set of marketing and sales channels
One of the SaaS growth strategies worth considering is to revise and expand the set of channels you use. Even if your current choice brings good results, it’s important to make sure nothing critical is missing.
For instance, many SaaS companies spend thousands of dollars on advertising but fail to invest in SEO and content marketing. Meanwhile, the latter is a viable business growth strategy in SaaS, and it should not be underestimated. Content marketing is projected to be one of the crucial factors driving SaaS business growth in 2023. Customers see significant value in relevant content. Articles in your blog, case studies, e-books, video lessons, podcasts, tutorials – all this can help increase traffic to your website. This is an excellent way to ignite interest in new customers, and build trust and loyalty with the existing ones. All this, in turn, will help enhance customer acquisition and retention.
Apart from SEO and content marketing, there are other instruments that can help you grow. Marketplaces, review platforms, video ads, direct mail marketing – all this can be useful as well. Launching an employee advocacy program is a viable idea as well. A coordinated campaign with your employees acting as brand ambassadors is a very cost-efficient marketing tool. In general, using a diverse set of channels is a beneficial strategy. This allows you to experiment, reach new audiences, and see what works best for your company.
Example: growing customer base with the new marketing channels
Checkr is a SaaS company that specializes in providing background check services for businesses. It helps companies to improve the hiring process by assessing job applicants faster and more accurately. The company needed to accelerate its SaaS business growth, and their main challenge was generating new leads and expanding the customer base. However, their efforts to reach new customers via their usual marketing channels weren’t bringing enough new leads.
The company decided to tackle this problem by leveraging data analytics. The goal was to better understand the target market, and identify potential new customers and promising marketing channels. To achieve this, the Checkr team:
- Used their internal data to analyze customer trends and define the audience’s preferences
- Analyzed external data received from surveys, market research reports, and other industry sources
- Used the results of the research to determine potentially effective new channels and other new opportunities available in their target markets
Based on the findings, Checkr expanded their media mix to include some new channels, such as online advertising and PR. In addition to this, the sales and marketing team adjusted their strategies, taking into consideration insights from the research.
- Checkr reached out to new customers and significantly grew the customer base
- Implementing the changes led to a 10% increase in conversion rates for new leads
- As a result of expanding the audience, the company’s revenue grew by 20%
As we can see, the company employed several SaaS growth strategies that helped it address its challenges and facilitate growth. In this case, these strategies were leveraging data analytics and using new marketing channels.
Building a business growth strategy in the SaaS market: what to keep in mind
There are many SaaS growth strategies that can drive business results and help you scale. In this article, we’ve focused on the most relevant options that address the pressing challenges facing SaaS companies today. As you may notice, all these SaaS growth strategies are interconnected. You can see it clearly from the implementation examples we’ve shared. For instance, you can leverage automation to improve data analysis and use data analysis to increase customer retention, and so on. So, the important thing is to bring it all together and adopt a systematic approach.
When making your choice and building your own SaaS growth strategy, it’s good to keep in mind some essential success factors:
- A good strategy should enable sustainable gradual growth rather than abrupt changes with a short-lived effect.
- Your market strategy, product strategy, and go-to-market strategy should be well-aligned and designed to work together. These are crucial components of any SaaS growth strategy, so consistency is paramount.
- All teams, processes, and day-to-day activities should be organized with scalability in mind. When you introduce a new process or a new feature, it’s good to ask yourself – “How do I make this scalable?”
- Ideally, your SaaS product should be scalable too. It’s not easy, because sometimes this requires changing the whole architecture. For example, you might need to move from a monolithic solution to a set of microservices. But in the long run, it’s worth it. You’ll get significant flexibility, better efficiency, and an opportunity to grow further.
- Your communication strategy should always revolve around the users. It should explain to them how your product will address their pain points rather than telling them how great your product is. That’s a simple and obvious rule, but many SaaS businesses fail to stick to it.
All these ideas can help you build a robust and efficient strategy for long-term growth.
What SaaS growth strategy model is right for you?
Different experts can recommend different SaaS growth strategies, but the choice is yours. Some ideas that are a brilliant fit for one SaaS company can be an irrelevant waste of resources for another one. Your product, audience, market niche, and other factors shape your unique circumstances. And your SaaS growth strategy should be adjusted accordingly.
However, despite the uniqueness of every company, some challenges are common for all SaaS market players. So, leveraging SaaS analytics, automation, and process optimization are things that can’t be overlooked. Their importance in the SaaS market keeps increasing. Therefore, it’s better to start moving in this direction sooner rather than later. Having a comprehensive roadmap will help you get a competitive advantage – even if the implementation will be gradual and incremental.
To sum up, an optimal SaaS growth strategy is one that is tailored to your company, and, at the same time, tackles the most critical issues in the SaaS market. With this approach, you’ll be able to determine and adopt the necessary changes and, of course, ensure considerable SaaS business growth.Back to Blog