Mel Jones, Account Director, Technology
Software-as-a-Service (SaaS) is one of the fastest growing segments in the technology industry, with over 25,000 SaaS businesses in the world, according to a 2021 Statista report.
Thanks to their subscription-based and often self-service business model, SaaS businesses grow, on average, 18% year-on-year.
So, how can you ensure that your SaaS business is keeping up with the growth trajectory?
Growing your SaaS business
If you’re looking to grow your SaaS business, there are three areas that you need to focus on:
- Acquiring customers: getting new leads and securing sales
- Retaining customers: getting customers to renew their subscriptions
- Tracking annual recurring revenue (ARR)
Whether you provide cybersecurity software, HR software, edtech, or any other kind of software, this article shares tactics for how you can acquire and delight your customers to keep your ARR growing.
How to acquire customers for your SaaS business
New customers are the lifeblood of your SaaS business. If you don’t get new people through the door, you’ll eventually stop growing. In addition to having a great product market fit, you need to acquire new leads to fuel your sales pipeline. How can you make that happen?
Integrated marketing is the first part of the SaaS growth equation. Integrated marketing is the process of aligning all your marketing channels, both digital and traditional, to promote your software. It allows you to optimise all marketing channels, including search engine marketing, SEO and technology PR, which, used effectively, creates the sense that your brand is ‘everywhere’. So, when your target audience needs you the most, you’re the brand that is front of mind.
How to retain customers
Retaining your customers is all about creating a product that they love to use. If you continue to deliver value, they will continue to pay. You can measure what your customers think of your product or service through your Net Promoter Score (NPS). In fact, studies show that there is a correlation between NPS and growth.
Aside from developing a great product, there are several things you can do to retain your customers.
Invest in user onboarding
Customers that are trained to use your product will understand its true value, making them sticky and less likely to churn.
Reduce barriers for renewal
Offering discounts or incentives for annual payments and removing the barriers for renewal all help to keep your customers subscribed to your product. This helps to maximise the lifetime value of the customer and generates a stable ARR, allowing you to better forecast growth.
Deliver exceptional customer support
Investing in live chat software and other forms of effective customer support is vital to deliver a seamless user experience and build brand loyalty with your customer base.
Track annual recurring revenue
For subscription companies, like SaaS businesses, annual recurring revenue (ARR) is a metric that helps to frame the success of your business, lead to stronger forecasting and propel your business’ growth strategy. It shows you how much recurring revenue you can expect based on yearly subscriptions as well as providing an annualised view of monthly recurring revenue (MRR) for the calendar year.
Tracking your ARR gives you a high-level view of the health of your SaaS business. You can use this data to forecast how revenue will compound as your company grows and see year-on-year progression which is useful for long term planning.
Growing a SaaS business isn’t easy, but if you focus on acquiring and retaining customers and tracking your ARR, you’ll have a good handle on the drivers of your business.
If you’re looking for support with growing your SaaS business, contact email@example.com for a free 30-minute strategy session and find out how we can deliver marketing campaigns that acquire new customers and delight your existing ones, like we did for HR software provider, Breathe.