Here are the 6 expert tips to boost your SaaS growth, from creation to development of your product.
Rapid growth at low cost - this is one of the first challenges a startup or SaaS vendor faces. The goal is twofold and may seem contradictory: to grow and prove the product's potential and necessity to its customers while dealing with often tight budgets.
To help you, Karmen explains the 6 essential techniques to boost your SaaS growth and how to apply them.
1. Continuously validate your MVP
Creating a good MVP
Healthy growth is always a reflection of how well your product fits the market and the needs of your customers. One of the first challenges for a SaaS startup is to be able to quickly create an MVP (Minimum Viable Product). Launching a product as soon as possible that is technically feasible and that people want to use is the best way to conquer the market and generate revenue.
An MVP is therefore a necessary first step, but what kind of MVP should you build and how? While you need to choose the right MVP for your needs, there are some common types of MVP that you can use as a template. These include:
- Single function application: most effective if you already have extensive market research and want to test a hypothesis for your product.
- Email campaign: This allows you to gauge interest in your product or service. If you already have a list of potential customers, this allows you to tap into their potential feedback.
- Pre-order/crowdfunding campaign: allows you to focus on getting purchases and leads. This type of campaign is ideal for products that need an initial customer base to work or have upfront costs.
- Concierge: A concierge MVP allows you to test a service concept without having to implement the whole service. If you are creating a concierge service for your MVP, you should be transparent about the fact that it is not currently an automated service.
- Wizard of Oz: this is similar to the Concierge MVP in that they are both manually managed, but the key difference is that the Wizard of Oz is meant to look like an automated experience for the customer.
- Landing page / Showcase: Creating a landing page is an excellent way to accurately gauge market interest in a product or service without having to develop anything. It also helps to validate the marketing aspect of your product.
Each type has its own advantages and disadvantages. Choose the one that best suits your needs.
To build your MVP, you can also exchange and collaborate with your customers to co-construct the product or build it from a single need and with the sole purpose of meeting that need. "Test, analyse and repeat" should be the guideline for your MVP.
Finding the best product market fit
To be sure that your product will win over your audience, it is essential to ensure that your service meets a need and demand. You need to check that your product is a perfect match for its market. In order to validate its product market fit, it is important to identify your target audience and the issues and challenges they face. These surveys will enable you to highlight the key and priority features to be developed and to validate your timetable.
2. Test and include the client in the development and promotion process
Once you have identified your targets, there are methods based on growth hacking to make sure you meet your customers' needs, stand out from the competition and continuously adapt your service.
Test and include the customer in the development :
- The first step is to focus on early adopters, your first users, to analyze their usage behavior, measure their reactions to new products and learn about their needs and improve your offering.
Karmen's advice: implement SEO and SEO techniques to attract these early adopters, use analytics tools to get accurate information about your user typology and target the best sources.
- Then, make these early adopters your best ambassadors. Nothing is better than using the voice of your first users to acquire new ones. You won't get better publicity than good testimonials.
Karmen's advice: create a network of ambassadors via a sponsorship system for example and exploit the power of networks to proliferate.
- As you interact with your first customers, new needs will arise. It is essential to identify the features that are most in demand.
Karmen's advice: Focus on the continuous improvement and promotion of your functionalities in order to avoid spreading yourself too thinly and to capitalize on the most profitable need.
- Don't forget to retain your users. Accompanying them to the end and not abandoning them for new potential customers will improve their customer experience, your customer success and therefore the retention rate.
Karmen's advice: Retaining a customer costs on average 7 times less than acquiring a new one. Think about it!
These methods require very regular micro-testing in order to align yourself as closely as possible with your customers' issues and to improve your offering.
3. The AARRR framework
The next goal of startups is to generate sales and customer loyalty. However, not all companies achieve this goal. The AARRR tunnel diagram is designed to help startups convert and retain leads. The AARRR funnel allows you to analyse important metrics of your acquisition through an evolving customer journey:
- Acquisition: this first point consists in attracting as many prospects as possible to your solution and through all possible channels. Focus on the most efficient sources by analyzing your results according to 4 criteria:
1. The cost of acquisition per channel
2. The execution time to acquire a person
3. Acquisition volume delivered per channel
4. The efficiency, i.e. the conversion rate of each channel
- Activation: Acquiring prospects is only the first step, if they never use your product it is useless. The objective here is to transform this spectator prospect into an actor prospect. Working on your integration so that your visitors can quickly understand your added value is essential. To increase your conversion rate, reduce friction points, tag your site with Call-To-Action (CTA) buttons or use the "free trial" method to make your prospects realise how much they need your product.
- Retention: Once your prospects have become users, you should not rest on your laurels. The goal is to have them come back regularly. If your customer leaves, it is because they no longer perceive the benefits of your solution and this may call into question your product market fit. To retain your customer, it is important to analyse their usage data, ask for their opinion and maintain a regular relationship with them (email, newsletter, monthly meeting to follow their experience).
- Reference: If your retention rate is high, pay attention to the satisfaction rate. A satisfied user will be the best ambassador for your solution and will be all the more inclined to share it with their own community. He or she acts as a trusted third party to the community. For this, you can use the NPS (Net Promoter Score) which measures customer satisfaction or use referral programs so that the ambassador is also a winner. Referrals are the key to organic and sustainable growth.
- Income: This is the last step in the AARRR tunnel. For a product that sells, this represents the money coming in. For a free business, a metric that ultimately represents the value of your business can be used (potential revenue from advertising in the news feed for Instagram for example). Logically, maximising the steps in the AARRR funnel should mechanically increase revenue.
The AARRR framework is a simple and effective tool for measuring the viability and optimising the growth of your SaaS business.
4. Get advice on managing your subscriptions with Dotsha
Managing your subscriptions as a SaaS is not easy. To simplify this management, solutions exist and allow you to optimize your productivity. But who to call?
Dotsha is a scalable, easy-to-use and quickly implemented subscription and usage management platform. Its solution is designed to help any business, of any size, grow and retain revenue at scale.
Dotsha 's management solutions and API infrastructure put your revenue or usage-based engine on autopilot and improve the productivity of your business and finance teams.
Thanks to Dotsha, you can :
- Build disruptive pricing strategies
- Enable your teams to create new revenue streams, with pricing scenarios generated in a few clicks
- Automate your invoicing, your reminders and your collections
5. Develop a partnership program
While content marketing and growth hacking are essential means of lead generation for SaaS, the creation of partner programmes is another way to accelerate growth.
A partnership programme can play different roles, it can act as a :
- A new sales channel: in addition to attracting customers of your partnerships, they are usually also customers of your solution.
- A success factor for customers: your partner acts as a trusted third party for its customers. They will therefore be more inclined to use your solution.
- A brand development axis: building a strong network of partnerships will generate a committed and dedicated community around your brand.
Therefore, while adopting a partner strategy can increase the growth of your SaaS business, it is important to remember that these programmes should also benefit your partners. The more value they can extract from your solution, the more your partner programme will contribute to the overall growth of your business.
6. Growth support with Revenue Based Financing
It is possible to use your RRM to finance the growth of your SaaS. Revenue-based financing, this non-dilutive method of financing, is becoming increasingly popular. RBF offers an alternative to traditional financing solutions.
It is based on three principles: speed, non-dilution and transparency. In practical terms, it is about turning a portion of your future monthly subscriptions into immediate cash. RBF allows a company to obtain funds quickly, without dilution, and the repayment is made in a transparent way according to the sales achieved.
If you are looking for financing to develop your growth, come and talk to one of our specialists at Karmen, the leading French fintech in FBR.
7. The KPIs to be put in place
Finally, in order to monitor all the key stages of your growth, you absolutely must know how your SaaS is performing. To do this, rely on 3 fundamental indicators:
- Lifetime Value: this is a key indicator for measuring and steering the performance of a customer file. It measures the overall value added by a customer to your company over the duration of their relationship with you.
It is calculated as follows if revenue expansion is not planned:
LTV = Average MRR per customer * Lifetime of a customer (in months)
LTV = (Customer revenue - (Acquisition costs + Customer service costs)) * Lifetime of a customer (in months)
To be able to take relevant actions and adapt your marketing strategies for customer acquisition and retention, it is essential to monitor the evolution of LTV over time.
- Client Acquisition Cost: CAC is the average total cost required to acquire a new client. It is an important business metric and is calculated as follows:
CAC = Acquisition Cost / New Customer
Acquisition costs include the total cost of sales and marketing efforts and associated salaries, the cost of software, goods and other equipment, outside services used in marketing/sales and other overhead costs required to convince a customer to purchase your product or service
- Net Promoter Score: the Net Promoter Score (NPS) is the numerical opinion of your customers about your product. We can see it as the king indicator of customer experience that measures word-of-mouth. To calculate your Net Promoter Score, you must first define what a promoter and a detractor are for your company. The NPS is then measured as:
NPS = % Promoters - % Detractors
For example: "On a scale of 1 to 10, how much would you recommend Karmen to your colleagues?
From 0 to 6: a detractor
From 7 to 8: a liability
From 9 to 10: a promoter
A positive NPS means that you have more customers willing to recommend your solution than you have customers who are likely to speak negatively about it. Any NPS higher than 0 can therefore be considered "correct". Each company then defines its own scale of values. On average, an NPS of more than 50 is considered good or very good and an NPS of more than 70 is considered excellent.
Developing a growth strategy is not something you can improvise and your intuition can often play tricks on you. The challenge lies in your ability to design a product that meets a clearly identified need and to be able to reach your target customers quickly.
Opt for the micro-test method: observe, plan, test, analyse and repeat until a model works. And then systematise, optimise and automate it.
With these 6 essential tips, the growth of your SaaS will no longer be a secret for you!
Discover also our article on 8 SaaS podcasts to listen to to boost your growth.
Rapid growth at low cost - this is one of the first challenges a startup or SaaS vendor faces. The objective is twofold and may seem contradictory: to grow and prove the potential and necessity of the product to its customers while dealing with often tight budgets.
To help you, Karmen explains the 6 essential techniques for boosting the growth of your SaaS and how to apply them.