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December 8, 2020 | 5-minute read (826 words)
For any business, growth is everything, and that's particularly true when your company is subscription-based, as many software-as-a-service (SaaS) firms are. From Slack and Salesforce to Dropbox and HubSpot, SaaS businesses have been growing steadily for years, and you may be hoping to be the next name on that list.
SaaS is one of three main categories of cloud computing used by organizations to grow their businesses. It’s a very high-revenue industry, which is expected to bring in nearly $105 billion in 2020, and generate approximately $141 billion in 2022.
SaaS companies across the globe are poised to drive the next wave of growth, with COVID accelerating collaboration and pushing enterprises toward digital platforms. Below are seven SaaS growth strategies that you can deploy to thrive in the competitive world of software.
This may seem obvious, but a surprising number of businesses launch with merely a vague idea of what they want to do, and that's not best plan to pursue. Starting with the right foundation is crucial for an entrepreneur. Before building brand identity and a team, you need to have a vision behind your product or service. Know what the problem is before you can seek to develop a solution. Ask yourself – Can you relate to the problem? Can you fix it better than the rest? Or can you develop a solution basis your knowledge and expertise? If you have clarity, you know where to start.
If you want to design a unique product, you need to know your customers and stakeholders. When you get this right, it’ll not only allow you to make a unique product that stands out in the market, but also create a strong brand identity. Once you know your “ideal customer,” you need to know your key stakeholders. You’ll have different stakeholders (management, creditors, employees, government, agencies, shareholders, suppliers, community and unions) to consider. It’s you who must make the choice, but ultimately people who use your product or solution – “the end users” – will be your key stakeholders.
You need to have a plan in place before you start any business, which typically means you’ll develop a business plan. Before diving deep, construct a lean business plan. Get your idea onto a piece of paper or chalk it out on a board to test your idea. Your pitch needs to have four elements – business strategy, business tactics, business model and a business schedule, for you to get started. For a SaaS product to succeed, strategy is key. Tactics will help you achieve your business goals, the business model will help you see the revenue curve, and the schedule will help you keep tabs on your day-to-day progress.
You need to design a business model that will allow you to not just survive, but thrive in the market over the long run. List your expected revenue stream and make an expense sheet. Know where to invest, what your cash flow statement will look like, and where your sales will come from.
In today’s world, it’s not just the product that people look at, but the value it brings to them. Millennials believe more in “emotional connections” than in cash transactions. The way you build your brand is one of the most important aspects of survival in a hyper-connected world and hyper-competitive market. You need to earn the trust of your consumers by connecting with them at the emotional level. Know how they feel when they purchase your SaaS service. In addition, you need to ensure that the messaging is consistent.
When you build your SaaS product, your focus should be not just purpose, but also value. A lot of companies emphasize coding and end up spending an exorbitant amount of money, resulting in a significant impact on the revenue. The tip here is to release a Minimum Viable Product (MVP). Once you have that MVP up and running, you'll be able to get feedback on pricing and value so you can start tweaking and perfecting it from there.
Marketing a SaaS product/service is equally important as building an excellent product. From partnerships, affiliations, advertising and content marketing to media outreach, you need to engage with influencers on platforms that work best for you. Be very strategic and smart when marketing your product. Perform as much research as possible on the target audience most likely to engage with your product, and put all of your early efforts into reaching that group of people where they are.
As you proceed to launch your venture or build it further, remember your foundational principles and goals. Invest in security, measure your customers’ needs, have a working plan, track your performance metrics, and ensure that you never skimp on quality to ensure that your SaaS business succeeds.
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