The “software-as-a-service” sphere is developing more dynamically and intensively, entering the life of a business interested in acquiring and using modern SaaS products. And, of course, companies’ conquest and retention of SaaS market positions are impossible without a well-thought-out and balanced SaaS growth strategy. Further in the publication, we will consider the features of the SaaS growth strategy and its main models.
Is It Expensive to Develop a SaaS Startup
- 1 Is It Expensive to Develop a SaaS Startup
- 2 Features of SaaS Growth Strategy for B2B
- 3 Key Models of SaaS Growth Strategy
- 4 TOP 3 Growth Strategies for SaaS Companies
The super-competitive SaaS sphere creates the prerequisites for forming and implementing Saas startups that are successful in B2B and B2C markets. Like any innovative product, a startup requires significant financial efforts to make breakthroughs and enter the market based on the creation of SaaS-Unicorn and venture capital investment. However, there are project launches and SaaS growth strategies without attracting external investors. Therefore, a SaaS startup needs to know the basic principles, methods, and rules for building a SaaS business model.
Its developers need to leverage the best international SaaS models when advancing a SaaS growth strategy from the ground up. As with any strategic decision focused on success, the development of a SaaS startup requires a detailed description and justification of its main provisions – the development of a business plan for the implementation of the project. Of course, the practice of SaaS from Envoy, Socio, Justcall, Pixlee, Wigzo, etc., differs in the number of investments attracted (from zero investments to tens of thousands of dollars). Still, all of them were once based on growth strategies with a clear identification of their business idea and an understanding of the correctness of the proposed product for your market. At the same time, for SaaS, it is impossible to get one hundred percent certainty that it will hit the target segment, especially for the B2C market, because the SaaS product itself must constantly evolve, integrate and change while remaining interesting to its users.
Therefore, when launching, developing, and financing Saas startups, we can advise you to use the following goals of SaaS strategies:
- Detail the factors influencing Saas and justify the profitability of your undertaking;
- focus your efforts on forming an opinion about the need and usefulness of your Saas with the consumer, and not on a price offer for him;
- earn the first profit and earn loyalty, scaling your business model a second time;
- do not get hung up on Saas specialization – combine marketing and engineering efforts;
- build an effective system of relationships between the components of the “product-team-market” model, at the intersection of which form the correct price offer for Saas.
In general, we can conclude that the cost and high cost of developing a Saas startup depends on the correct understanding of the target audience and desire to invest in a SaaS growth strategy. Then, there is only the result, which will show how right your decision was in her choice. Finally, it is based on the quality of the product and its importance to the client so that he is ready to pay for it. There are no universal methods and clearly defined amounts.
Features of SaaS Growth Strategy for B2B
As mentioned above, building successful SaaS growth strategies is possible in B2B and B2C markets. At the same time, several techniques and methods are identical for use in both types. At the same time, B2B practices vary in intensity of marketing efforts due to fierce competition in the B2B SaaS product market. In this case, the lack of dynamics in the SaaS company means stagnation and the dying of the entire business model. At the same time, the key areas in B2B SaaS strategies will be the following:
- active use of digital technology for growth in the field of accounting, sales, marketing, and HR;
- synchronization of work in the direction of marketing and sales in the direction of quality leads;
- engaging the soft skills of your employees and using the human factor in finding new ideas for growth;
- identify and differentiate hypotheses about the growth of SaaS in terms of the scale and importance of factors influencing it;
- position the security and protection of personal data as one of the important conditions for your SaaS service;
- highlight customer focus at the TOP of your leadership positions;
- generate SaaS growth ideas in three main areas: market, users, and technological innovations;
- When deciding on a SaaS growth strategy model, always rely on evidence.
The listed directions in SaaS growth strategies combine three resource elements – processes, technologies, and people, which is the key to success for B2B with a focused target market.
Key Models of SaaS Growth Strategy
SaaS Growth Strategies is an approach to achieving goals and a program of actions for the development of a SaaS company over time. Based on your current state of affairs and your position in the market, your SaaS strategy will differ from that of your main competitors. Therefore, the choice of the SaaS Growth Strategy model will depend on the goals and objectives of the strategic, tactical, and operational periods.
Sales Based Strategy
SaaS practitioners apply three types of models for sales-driven SaaS growth strategies.
The first model is customer self-service. This is the ideal model for SaaS companies relying on self-service user activity. To this end, they create content that would encourage customers to subscribe to SaaS independently. There are no sales as such in the model, but customers’ intangible motivation contributes to maintaining their desire to serve themselves. The marketing task is to form the level of customer awareness and generate income from the chain of building relationships within the model. Examples of the implementation of such a model are universal office and collaboration platforms Microsoft Office Suite, WPS Office, Zoho, G Suite, Zoom, and other similar companies.
The second model is corporate sales. Difficult to maintain and build a hierarchy of business processes, providing multifunctional customer support and active marketing efforts for each client. The task of marketing is to form the level of customer awareness, build sustainable relationships with customers, and use advanced sales tools. SaaS corporate sales tools are widely used in their activities by Netsuite, Hectaro, Planfix, etc.
The third model is transactional sales. It is a hybrid model that combines a sales-centric marketing approach with a product-centric approach. The logical manifestation of the customer’s sense of risk due to lack of attention to him is adapting and transforming the self-service model into a transactional sales model. The model is typical for mass sales with a high level of income and efficiency. The task of marketing is to provide the sales department with high-quality leads, fill the sales funnel, create educational content, etc. The model has been implemented in the activities of Marketo, Intercom, and other similar companies in web analytics and digital marketing.
The SaaS marketing growth strategy involves implementing several successive stages, the content discussed below.
Stage 1. Identify the sales model by the criteria suitable for the Saas company and its range of services.
Stage 2. Development of a content plan and its implementation based on customer preferences.
Stage 3. Create a powerful and effective retargeting campaign.
Stage 4. Use growth hacking techniques as a consequence of continuing the Saas strategy.
Stage 5. Establishing customer feedback and building brand reputation.
Stage 6. Creation of the referral program.
Stage 7. Optimization of the pricing strategy for Saas.
Stage 8. Automation of marketing and sales processes.
Stage 9. Retention of clients through multi-channel support.
Stage 10. Business scaling.
According to marketing analysts, the best SaaS marketing strategies include content marketing, SEO, remarketing, and mailing. At the same time, the critical parameters for the effectiveness of the Saas growth strategy model will be the cost of attracting a client, traffic, conversion, regular income for a period, profit per client, etc. These metrics will help a SaaS company build a growth strategy around the numbers and drive further informed marketing and technology decision-making. In addition, it is also essential to monitor the main competitors since SaaS is a dynamic product presented in a highly competitive market. Therefore, placement platforms, social media campaigns, testimonials, audience engagement techniques, organic reach, and the like are subject to research.
Product Based Strategy
The development of a product-based SaaS growth strategy should be based on the Product vision approach, the meaning of which is to use information about the target audience, market potential and positioning of the SaaS product in it, and analysis of the competitive environment. This strategy aims to achieve the SaaS company’s success by attracting new subscribers and creating high customer value for them.
According to experts, the future of SaaS belongs to product-oriented companies, the main principle of which is to build all company business processes around the main SaaS product. This allows them to diversify risks and create a requested product to help clients achieve their goals independently. Also, the advantages of this approach include the structure of the sales funnel (freemium) as a powerful driver of growth, faster sales cycles, better user experience, lower cost of customer acquisition, and high income per employee in the company. However, at the same time, along with all the advantages of product orientation, the SaaS growth strategy has one main drawback – the high costs of its use.
TOP 3 Growth Strategies for SaaS Companies
The application of one or another strategy for the growth of SaaS companies directly depends on its desire to become a leader and create a necessary and useful product, as well as on its resource provision and potential for development in general. Below are examples of the implementation of successful SaaS growth strategies by the leading players in the global software-as-a-service market.
#1 Canvas. Product-Focused Growth Strategy
Canva is a free online photo editor with a lot of built-in features. This is how the company currently positions itself. Its growth strategy is directly related to a product-centric approach and the use of a freemium model for the type of limited features. Canva provides many free solutions to its users while imposing a number of restrictions on the possible functionality. Thus, the company encourages the user to complete the purchase of the missing design element or the effect he needs (often for a nominal fee of $1).
#2 Intercom. Sales Oriented Growth Strategy
Over the past few years, the American SaaS company Intercom has been in the TOP-100 cloud services, according to Forbes. The company’s long history has proven its ability to develop and implement effective SaaS growth strategies. Intercom is a customer communications platform that includes a separate list of products integrated with other services. Algorithms of the SaaS product from Intercom allow you to provide targeted communication with customers using various channels (in mobile applications, via email, as well as within the network). The variety of tools used to support Intercom’s sales-driven growth strategy comes down to intelligence gathering, custom template creation, audience segmentation, real-time performance monitoring, and more.
#3 Similar web. Marketing Focused Growth Strategy
Similarweb is a SaaS product supplier to the international market. The platform helps the user to explore the prospects of the market, as well as identify the main vectors of competitors’ strategies. The emphasis for clients in the work of Similarweb is placed on opening attractive opportunities for them by participating in an affiliate program and receiving high payouts and bonuses. For itself, a SaaS company builds its development based on attracting new partners or affiliates and positioning its platform as a fast-growing competitive analysis tool with the most innovative features.
Author Tetiana Dedilova, PhD (Economics) (KhNAHU)
Checked by marketer Victoria