Marketing might work in silos, however growth of a SaaS application is a result of several factors. Start from product-market fit, problem solved by the application, features, pricing, support – multiple factors need to align together to achieve the growth. Retention of the growth rate throughout the years is another challenge. Your competitors, pricing and new features shall remain appealing to a large user base to make recurring revenue.
How to achieve sustained growth for an SaaS application? This question shall be addressed in all stages of product development. When you consider a new feature, UI modifications, or introduce a new support system, always ensure that growth rate is positively influenced by such decisions.
We recommend these eight point strategies to achieve growth of SaaS based applications. The product development team shall consider these points in the ideation phase itself to achieve maximum results.
- Build applications that can scale Developing an amazing application will not guarantee any level of success in the markets. Infact, many such applications fail terribly. Scaling is the key factor which determines sustainable growth and recurring revenue. Inturn, this depends on the target user base, appealing UI, ease of navigation, benefits compared to competitors etc. To a large extent, factors that affect scaling could be identified by testing the product-to-market fit.
- Design a growth framework How you acquire new users? What’s your subscription plans? The product team shall formulate a growth framework which addresses strategies for user acquisition and retention. Free trials and offers decrease the friction for new users to sign up to your application. In a growth framework, funnel based approaches help to acquire and retain users. A significant part of this user base would be converted to long term customers.
- Set the KPIs for your SaaS application. The KPIs could vary depending on the business objective and targeted market segment. Even then, important indicators such as Annual Recurring Revenue (ARR), Net Revenue Retention (NRR) and Churn Rate are applicable for most of the companies. In the early stage, indicators such as Average Revenue Per Account (ARPA), Customer Acquisition Cost (CAC) are crucial to understand the performance of an application. The product development team shall identify the KPIs relevant to their application and evaluate periodically to achieve maximum growth.
- Build the pricing strategy Pricing is the single most factor that determines the growth of your application. The product shall be placed in an appealing price range that’s affordable to your target market. The pricing of a competitive product is another key factor that affects the price of your product. The long term retention of a customer is hugely dependent on the pricing, hence your team shall offer differential pricing depending on the duration of commitment. Subscription plans with monthly, yearly and long term pricing will allow you to cater for a wide range of customers.
- Sell to developers through APIs. Many customers prefer to unify their operations through integrations. This saves time by accessing features in a single application without much effort to adapt the environment of a new application. There are immense options to grow through integrations, hence almost every product now offers APIs. It’s advised to maintain a separate team for integrations, so that companies could provide technical assistance without affecting internal operations.
- Expand to other geographies The target market of your application determines the revenue. It’s recommended to build strategies to expand the utility of your application to new locations. The features and functionality requirement could be different for various locations, and most times you can make the changes with minimal effort. To meet the customer and regulatory requirements in new markets, the product development team shall formulate plans beforehand to make immediate execution.
- Everyone is part of the growth team Unlike the older times, the growth of a product is not limited to the responsibility of the marketing and sales team. Everyone in the team shall promote the product in their own capacity. The team members could engage through blogs, podcasts, user-guides, master class, meetups, online forums etc. Such activities will in turn result in positive conversions which help the companies to acquire users and revenue.
- Referrals and reviews The growth of amazing products are mostly guided by satisfied customers. The referral incentives help companies to acquire new customers with minimal cost of acquisition. User-generated reviews help to convince new customers to make a purchase decision. Your product should include interactive areas where users can refer, review and rate your product. Ensure that the user queries are addressed in priority to offer positive product experience.
Looking to build custom SaaS applications for your company? Talk to our product managers to learn more about offerings of Netstratum.
Netstratum has extensive experience in building applications in the areas of telecom, agriculture and finance. Contact us to discuss the potential areas we can collaborate.