The SaaS industry has been growing rapidly for the past years and shows no sign of slowing down. SaaS refers to software that can be accessed online through a subscription rather than software that is bought and then installed on individual devices.
As of 2018, SaaS industry revenues were reported to be $80 billion worldwide, and this figure is expected to rise above $143 billion by 2022.
Entrepreneurs are attracted by the flexibility and scalability of this business model. But as more players enter the game, competition will become increasingly fierce. In order to succeed, SaaS brands can turn to growth hacking approaches to boost acquisition and beat competitors. This involves experimentation, testing channels, and scaling efficiently.
In this article, I will explore how Saas businesses can sustain long-term growth.
Stand Out in the Saturated SaaS Market
With new solutions appearing daily, your SaaS brand must stand out from the crowd to avoid being trampled.
This requires constant innovation such as the development of added-value services, apps, and features. And there’s no time to be complacent - At any moment, a competitor may pop-up to challenge your dominance.
Attracting subscribers to a service rather than purchasers of a one-off product also brings its own challenges.
How do you convince someone of the value and get them to invest monthly?
According to Timothy Carter, Chief Revenue Office at AudienceBloom, “Since SaaS products aren’t tangible, they don’t give consumers the semi-“high” feeling of acquisition ... They require some kind of bottom-line benefit to be purchasable.”
Likewise, once you’ve successfully converted a prospect into a paid subscriber, how can you make them increasingly loyal?
Your predictable, recurring revenue is dependent on users sticking with you for the long haul. In such a competitive world, retention is paramount.
In order to attract users and keep them, SaaS brands must show customers the functional benefits of their software and enable users to form an emotional attachment to it.
To do this, businesses must communicate directly and effectively with customers and nurture a community of advocates.
Find the Combination of Growth Strategies That Is Right for Your Business
My experience as a growth marketer has taught me that short-term tactics are acutely specific to each SaaS product. Ultimately, you need to find the most efficient channels and double-down on these to acquire users quickly.
Use Both Paid and Organic Marketing Tactics
The iterative testing methodology of growth hacking uses data to generate hypotheses and technology to test them. Your short-term growth depends on finding product-market fit and experimenting with a mix of paid and organic marketing tactics.
For example, Dropbox’s incentivized referrals are widely-lauded, with a user being given free file storage in exchange for inviting friends to the service.
While not SaaS, Airbnb’s early integration with Craigslist is a good lesson on using tech to tap into established audiences, and Uber’s free $20 first ride is a superb example of a company taking the leap by understanding the lifetime value (LTV) of its users.
These businesses created win-win scenarios by removing as many barriers to the first experience as possible. Offering your service (or part of it) for free might seem daunting, but it is actually an essential part of SaaS success.
Businesses Can Consider a Free Trial or Freemium Model to Get Their SaaS Product Off the Ground
A free trial of 14 days or fewer is sufficient to become indispensable to the user and convince them to make a paid commitment.
Alternatively, with a freemium model - such as that adopted by Spotify, where users can listen to unlimited free music - The idea is that the user will enjoy the free product so much that they’ll want to unlock its premium offerings.
Influencers Can Also Help Your SaaS Product
Influencer win-wins can help you reach bigger audiences and drive new interest in your solution.
Offer your best access level to influential bloggers for free, in exchange for the chance of a review or collaboration. Below is an example of a basic outreach email:
When reaching out to potential influencers, be sure to introduce yourself and make clear why your product is relevant to them and their audience.
Whether you use organic or paid marketing strategies, a free trial or freemium approach, or influencer marketing, SaaS brands need to create (and communicate) the value of their products.
Incentivized referrals are very important for digital businesses, and SaaS is no exception.
Build Your SaaS Product for Long-Term Growth
With the challenges of SaaS in mind, here are three principles for long-term growth. This list is by no means exhaustive, but it’s a useful framework for sustaining SaaS success.
Adopt a Charming Persona
You may be offering an online service, but you won’t attract new users with robotic interaction. SaaS brands must work extra hard to show a human side to their technology, and one way to achieve this is by using humor and charm when communicating with customers.
This should be done with sensitivity, but laughter has a powerful unifying effect, can draw in new users, and make your content more shareable.
Furthermore, gamification and “Easter egg” marketing are two approaches that leverage people’s competitive and fun-loving streak.
Gamification involves designing elements of your service that are there purely for the fun of using them such as in Treehouse’s game design classes.
In Easter egg marketing, a company will hide jokes or secret features within their products to be discovered by users.
When using humor, it’s always important to know who your audience is, and it’s always best to avoid jokes that may reflect poorly on your brand.
Nurture Users With Content Marketing
Quick-wins are essential to driving initial growth, but if you want to nurture lifelong users and grow your brand to be sustainable beyond the product, you must add value in other areas. Content marketing and community-building are imperative to creating loyalty and credibility for the long-term.
Depending on your audience and budget, articles, blog posts, podcasts, and webinars can all help to keep users connected and engaged.
SaaS brands will have already built a captive audience (via email), so topics must be inspirational, compelling, or tied to their specific pain points.
A mix of educational, informative, and story-led content will establish your brand as a credible publisher and a trusted voice.
Create Willing Brand Ambassadors
While it may seem cliché to say that your customers are your best advertisers, this is as true for SaaS as for any other industry.
Involving users in your decisions in as many ways as possible will make them feel invested in your company and its long-term success. For example, ask for input and feedback regularly, regarding new features, missing features, or even your website launch to demonstrate that you value your audience’s input.
As just one example, emailing a dissatisfied user may help you identify a problem with your service and prevent other users from being lost or prospects failing to convert.
Another way to build trust is to be totally transparent.
Buffer is a great example, in that they publish exactly what subscribers’ money pays for.
Whichever way you choose to engage users and keep them happy, this will inevitably lead to more new users as well as loyal existing users.
Integrity is rare in today’s commercial landscape, and word will spread if you embrace collaboration and transparency.
SaaS Companies Should Adopt Marketing Strategies That Prepares Them for the Short-Term and Long-Term
A growth marketing strategy that combines short-term and long-term tactics will allow you to scale your SaaS company sustainably whilst successfully standing out from competitors.
You have a proven product-market fit, you will attract new users by nailing a powerful value proposition and running data-led experiments to double-down on the most effective channels.
Simultaneously, you must build a brand identity, publish meaningful content, and cultivate a community of true brand advocates. If you're unsure how to market your SaaS company and product, consider hiring a digital marketing agency.