If you're reading this, you're probably in one of two camps: Either you're starting a business or your company is stuck in the mud.
In any case, you're seeking growth. More customers, more revenue, more profit.
Developing a successful business is different from starting one. Generally speaking, it's more difficult and takes longer than the initial launch phase.
If you're working at a company trying to boost growth, you've got your work cut out for you.
Your goal is to find a scalable way to grow the business, but it's tough to pinpoint the best path to take.
There are a multitude of options available to you. For instance, you could launch capital campaigns, put together an A/B testing program, or improve the product. Yet these options are just that — options.
How can you tell which one is the best?
If you're looking for a magical answer to help you grow your business, stop right now. There are no secrets.
However, there are seven strategies that may help you get the jolt your organization needs to grow.
They're not entirely sure bets, but they have proven to be effective for many companies.
Let’s dive right in…
1. Offer More Integrations
5 out of 10 brands using multiple SaaS services will centralize management in the next five years.
What does this mean for SaaS owners?
By offering integrations with the apps and tools your prospects already use, they will be more likely to engage with your product.
For one, your service will be easily integrated into users’ workflow. Second, they'll get added value from the combination.
How can you implement this strategy?
First, find out what apps your prospects use and then optimize an existing integration or build a new one if needed.
Second, as the lead software provider (e.g., HubSpot), provide an integration for your prospects' secondary solution (e.g., Marketo) to use.
Lastly, make sure your integration is easy to find and manage in the backend of your product.
For instance, you can offer an integration with Google Analytics to give users access to their custom reports.
You could also integrate with a CRM like Salesforce to make it easier for your customers to create leads from within your app and centralize their marketing information into a single place.
The point is to make your product more integral to the user's workflow.
2. Find a Blue Ocean
Back in 2004, INSEAD professors W. Chang Kim and Renée Mauborgne developed a framework for growing a business: Blue Ocean Strategy.
The idea is to find a new market space that has room to grow. Instead of competing with established players, your company can enjoy the benefits of an untapped market.
Examples of companies that pursued blue ocean strategies include W.L. Gore & Associates, which created an entirely new market for waterproof fabrics with its GORE-TEX product.
The company could grow from a small business to a multi-billion dollar company in the process.
Cirque du Soleil is another great example of this strategy in action. It created a new market for circus performances by putting a higher emphasis on the artistic merit of the performance rather than the dangerous tricks.
This helped shift the idea of what a circus could be.
How can you implement this strategy?
Find out where your product or service fits into the market and whether you can create a new market space altogether.
If there are competitors in this space already, consider creating your own niche instead of competing with them head-on.
For example, you could take the lead in a software category that is currently underserved by competitors like Salesforce or Microsoft Dynamics.
Easier said than done, right?
Some ideas for finding untapped markets include:
- Research geographical regions that are underserved: Some of the most successful businesses in Africa are targeting more rural areas with their products since urban areas have already been saturated by large companies. By establishing a presence in these areas, they're creating new markets that were previously not possible.
- Start with the customer: Do some research into your ideal customers' needs and desires. Create a list of the requirements that aren't being met in your current market space.
- Play around with new ideas: Just like the inventors of the 3D printer and Amazon Echo, you could tap into a new market by developing a product that solves an existing problem in a new way.
These are just a few ideas to get your creative juices flowing, but the possibilities are endless.
3. Increase LTV
Most businesses lose money in the beginning stages of customer acquisition.
By increasing the LTV of your product, you can make up for the losses.
By having customers contribute to your business for longer periods.
This can often mean increasing the number of features or making a portion of your product free to use.
For example, Dropbox and Evernote both allow their customers to use a limited version free of charge. This provides customers with the opportunity to try out your product and see if it fits their needs.
Instead of increasing LTV in a way that is immediately beneficial to your business, some strategies take a long-term approach.
For example, companies might:
- Create an addon: You could provide additional features for customers who already use your product and are willing to pay for more abilities.
- Build trust: Customers are more likely to spend money if they trust a company. This could be as simple as showing them how the product works or making your company's mission statement clear from the beginning.
- Increase the average contract value: If your product isn't expensive, you could try creating packages that require long-term contracts. This forces customers to pay for more than just their immediate needs.
4. Product-Led Growth
Some of the most successful companies in the world rely on their product to generate revenue.
They focus on creating an amazing product that has the potential to generate profit and drive natural growth.
The most well-known example of this strategy is Apple. Steve Jobs knew that people wanted an intuitive computer that was easy to use. He pushed his team to create an operating system that included sharp graphics and quick responses.
This eventually led the company to focus not just on their computers, but also to create an mp3 player, tablet, phone, and even a smartwatch.
This strategy works because people want to use and recommend products that make their lives easier.
By integrating a “self-growth engine” into your product, it can sell itself.
Dropbox was one of the pioneers of this model. Its product is so easy to use and set up that it has been integrated into over 500 million devices.
How did they achieve such massive growth?
In the early days of the business, they relied on a referral strategy to increase their number of customers. If a new customer was referred by someone already using the product, they would receive extra space for free.
This incentivized customers to share their referral links with their friends and family. This skyrocketed Dropbox’s growth.
Product-led growth comes in many shapes and sizes, but the key is to take advantage of existing users and provide them with a service so great that they can't help but share it with others.
The next time you're trying to decide if you should invest in another marketing campaign or focus on product development, remember that people are more likely to pay for an amazing product than they are to click on ads.
5. Define a Better Pricing Model
Studies have revealed some pretty interesting information about pricing models:
Contract length is highly correlated with churn rate.
The longer the contract, the lower the churn rate.
However, the reason you want to focus on longer contracts is because they have a larger average contract value (ACV). The more people spend with you, the more cash you’ll make.
When trying to decide on how long your contact length should be, consider these four factors:
What’s the cost of acquiring a new customer?
Let’s say you have a tool that costs $50 per month.
Let’s also say that you spend $50 in advertising to get each customer. For your business to break even, you need each customer to continue spending $50/month after the first month.
Otherwise, you’re just trading one month of revenue for another.
You need to decide on an ACV that will help your business to continue growing.
How long does it take users to experience the real value of your product?
If you’re too aggressive with your pricing model and it takes a user, say, 3 months to start seeing the full benefits of your software, then you’ll likely see a high churn rate.
However, if you offer a lower plan with full access to your product and users can start getting real value from it within a month or two, then you’ll have a higher retention rate.
There’s obviously some nuances to this, but the key takeaway is that you need to make sure users can experience a high enough level of value from your product in a short enough amount of time.
What’s the perceived value of your product?
Intrinsic value is the value your product brings to the user's life, while perceived value is how much value your product has in the eyes of the customer.
For instance, if you run a bakery, your product has intrinsic value because it helps feed people who are hungry.
However, if someone doesn’t care about buying fresh baked goods, then your product isn’t offering much perceived value.
It’s important to consider both types of value when setting your pricing model.
Before deciding on a specific pricing model, you need to define the value of your product and what you want it to be able to do for your customers.
The price elasticity of your product
With low-price elasticity, customers are less likely to reduce their spending.
For instance, if you’re buying a luxury car, you’re less likely to change your purchasing behavior even if the price goes up.
However, if you’re buying a t-shirt, there’s more room for fluctuation in the price you’re willing to pay.
It goes without saying, but lower elasticity products should have higher prices and vice versa.
6. Translate Your Product to Other Languages
One of the easiest ways to grow your SaaS business is by tapping into international markets.
The Latin American SaaS industry is expected to be valued at $5 billion this year.
Besides, the SaaS industry is expected to grow by over 200% in Europe.
What does this mean for you?
If you’re relying on just one language , then you’re missing out on a whole world of potential new customers.
After all, the world is home to over 7.5 billion people.
And the truth is, they’re not all going to speak English. But a lot of them will use your software if it’s available in their language.
7. Tap Into a Trend
Trends represent a huge opportunity for growth, especially if you’re able to identify one that aligns with your business.
Take Zoom, for example.
Between 2018 and 2020, Zoom increased market revenue by 500%.
By identifying a trend and capitalizing on it.
In this case, that trend was video conferencing – particularly with business teams.
The pandemic caused by COVID-19 was the perfect opportunity for Zoom to jump in and take advantage.
And they did just that, creating an entirely new market for video conferencing that had previously never existed.
Trends are a surefire way to get an influx of new customers every time one rises.
Take a moment to think about trends in your industry.
Which of those could you use to grow your business?
And this isn’t about being opportunistic. It’s about appealing to the interests of your current customers.
If social media is a trend that appeals to your customer base, then build features related to social media.
If virtual reality is a trend that appeals to your customer base, then create tutorials on how to use the product in VR.
If cloud storage is a trend that appeals to your customer base, then create integrations with cloud storage providers.
Bottom line? Trends are an easy way to grow your SaaS business, so always keep an eye on the latest trends and find ways to incorporate them into your service.
These strategies aren't entirely foolproof, but they may help give your company a healthy boost.
So if you're currently stuck in a rut, you've got some strategies up your sleeve. Give them a shot and see what happens!
The good news?
You don't have to try them all at once. Start with one or two that you think best fit your company's needs, and let them run their course.
The goal isn't to try and find a silver bullet.
Instead, it's to find the right strategy for your company and give it the best shot you've got.