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Optimizing SaaS Growth: Strategies for Tech Development

May 6, 2024

by Wagner Lopes

Head of Growth, Luby

Growing your SaaS business goes far beyond structuring a strategic plan. Success in business growth is based on applying specific strategies for each element planned to ensure the desired growth - or even exceed the goal. 

SaaS companies have many business peculiarities, so it is common to consider some guiding pillars of the business, which we will address in this article, sharing some important conclusions that can drive SaaS growth through strategic technological development.

How Do We Measure SaaS Growth?

Measuring the growth of Software as a Service is critical to evaluating progress and ensuring continued business success. One technique that yields good results is to segment the process into five basic stages: acquisition, activation, retention, referral, and revenue.

The performance of each stage and its impact on the overall expansion of the SaaS business requires specific evaluation tools. Key performance indicators include:

  • Acquisition: attracting new customers to the SaaS platform. Common metrics include customer acquisition cost (CAC), number of website visitors, leads generated, and conversion rate of visitors to potential customers.
  • Activation: provide users with a positive first experience with the software. Activation metrics include the number of users who complete the onboarding process, the average time to first significant interaction, and the activation rate of new users.
  • Retention: customer retention is about keeping existing customers engaged and happy with the product. Product usage frequency and Net Promoter Score (NPS) are some retention indicators.
  • Referral: refers to the capacity of current customers to pass on the product to others. The number of customer referrals, referral conversion rate, and impact of referrals on customer base growth are some of the metrics used.
  • Revenue: generated from a subscription or use of the product. Revenue metrics include lifetime value (LTV), monthly recurring revenue (MRR), revenue growth rate, and customer lifetime value (CLV).

Top 5 Growth Strategies for SaaS

I've created a list of 4 SaaS growth strategies to help you improve these metrics in your next planning.

SaaS growth strategies including user experience, marketing strategies, learning cycles, customer service, and growth metrics

1. Focus on User Experience

The user experience is a key strategy that should always be improved. Customer satisfaction is especially important when it comes to SaaS.  By actively refining products based on user feedback and leveraging data-driven insights, you can deliver solutions that largely meet user expectations.

By understanding and addressing the needs and pain points of the audience, companies can build strong relationships that drive loyalty and sustainable business growth.

2. Focus on Customer Acquisition and Marketing Strategies

Lead generation and customer transformation is a process that requires the use of marketing strategies, the most important of which are:

  • Identify the relevant audience for your product
  • Make personas that represent different customer groups
  • Determine the channels in which your prospects are most active
  • Develop targeted marketing campaigns for those channels

To achieve this growth, you need specialized professionals in the sales field, and your product's promotion is no different. You can create a detailed marketing plan, set goals and OKRs, and allocate the optimal capital to each strategy. Keep operations and resources on track.

3.  Learning Cycles and Rapid Testing

An agile marketplace requires agile skills. In the SaaS landscape, constant change is part of innovative solutions. Therefore, the business process must be innovative, agile, and adaptable to new features and functionalities.

The best way to achieve this is to collaborate with customers through intelligent communication. Agile methodology, such as the famous Scrum, is widely used to achieve this goal. This technique implements constant customer interaction, organized in sprints, which are periods limited to about a month, in which an incremental version of the product is developed. Scrum is an excellent way to gather customer feedback and validate your project.

In addition, this methodology allows all professionals to be involved in all stages of the idealization and development of the project so that the project requirements can be met in full alignment with the customer.

4. Improve Customer Retention with Exceptional Customer Service

"It costs 5 to 7 times less to retain a customer than it does to acquire a new one," says Philip Kotler, a renowned marketing expert. This vision is even more definitive when discussing B2B companies because it makes business growth and revenue more sustainable.

Long-term revenue stability is ensured by customer loyalty, as loyal customers tend to boost their CLTV (customer lifetime value), make their customers happier, and generate recommendations for your business.

Some of the key retention strategies for your SaaS are:

  • On-site chatbot to resolve doubts immediately
  • Adding value to the customer throughout their journey
  • Communication plan
  • Keeping in touch with your customers
  • Building community to facilitate contact
  • Strengthen your brand

5. Focus on Key Growth Metrics

To ensure that your company remains relevant to customers and investors in the marketplace, you must demonstrate that your business is growing. Tracking and reporting on relevant business metrics means tracking and reporting. Retention rates, monthly number of customers interested in the product, activation rate, number of active users, customer acquisition cost, customer lifetime value, and a brief summary should be included in the list.

growth in SaaS takes foresight and strategy

The Bright Future of SaaS: Collaboration and Innovation

These techniques will help you create a high-performance product. It is important to remember that there is no secret formula or recipe; you need to analyze your scenario and understand how these strategies can be adapted to the needs of your business.

The path to SaaS growth is built with innovative and collaborative teams that can leverage data analytics and adopt agile development methodologies.

By investing in scalable infrastructure and prioritizing a seamless user experience, companies can position themselves for sustainable success in the competitive SaaS environment.

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