Software as a Service or SaaS has become a popular business model. With SaaS, there are fewer barriers to entry, especially where founders already have an excellent working product. However, the SaaS space is very competitive and tough on startups, and the path to success isn’t a straight one.
According to Dan Martell, a thought leader and an innovator in the SaaS space, companies with great products can also fail due to premature scaling. Martell reckons that a great product works hand-in-hand with a great team.
If you are a SaaS founder, entrepreneur, or even a product manager, this article is just for you. The six tips below will help you scale your SaaS venture.
#1: Focus on Your Pricing Plan
You may have a great product that is too expensive, and this will either increase your churn rate or scare off potential hot leads from closing. Your product may also be priced too lowly. How do you know what the right price is as a SaaS business that’s scaling?
Developing a buyer profile is useful in identifying the needs of specific customers and is useful in creating a pricing plan. For content-driven SaaS businesses such as HubSpot, the buyer profile is an intrinsic part of the company’s content marketing efforts that further informs the company’s pricing model. Besides pricing, the buyer profile also influences the SEO campaign management strategies of online businesses.
A well-developed buyer profile will tell if you have an out-of-range price point. You can better understand customer budgets and which customers would be willing to pay a premium, for example, depending on their organizational roles.
Your anticipated monthly recurring revenue should be a critical factor that informs your pricing. There are several approaches to pricing that SaaS businesses can adopt. These include:
- Penetration-based pricing – Companies would use a lower than expected price to enter the market and outsell the competition.
- Cost-based pricing – This involves adding up the cost of the product/service together with a target profit margin. However, this method is inflexible as costs and revenues can’t always be anticipated correctly.
- Promotional pricing – The SaaS business uses entry-level pricing, possibly lower than the competition’s, and slowly increases it over time or as new features are unlocked. The Freemium model is a classic example of this.
Most SaaS go through the promotional pricing route, especially if they trust their product quality and can offset the cost discount with the increased revenue scale.
Whatever method you choose, a great pricing strategy only comes after the product has been perfected. However, even in the later stages of marketing the product, you can experiment with your pricing, say, once every six months. This will only work once you have reduced your costs to a bare minimum to prevent your bottom line from being affected.
Since most SaaS businesses adopt a subscription model, pricing can be more flexible. Just as you would A/B test content elements to improve your content marketing strategy, you can also A/B test your price points. You can do this by offering the same product at different prices within the price spectrum. Whatever price brings you the most revenue over, say, a three-month period is what you should choose.
Once you’ve settled on your pricing plans, make sure you display these plans prominently on your site and the features each plan includes. You can use HighLevel’s funnel builder to create these amazing landing pages.
#2: Create A Referral Program
Satisfied customers in any industry are your biggest advocates. Statistics further show that referral leads have a 30% higher conversion rate than typical marketing channels. Also, referrals barely cost anything, translating to a lower customer acquisition cost.
So how do you create an effective referral program to help scale your SaaS business? The first step is to ensure that your product is good enough that your existing customers will refer you. Next, there must be a win for your existing customer and the potential lead. That means creating a double-reward system where both the referrer and the referee gain something.
The third step is to ensure that the lead referral process is as frictionless as possible. The easiest way to do this is to provide a link to the customer, who can then share it on their social platforms, emails, etc. Referral tools such as Growsurf and ReferralHero can help you integrate this into your applications more effectively.
Evernote is an excellent example of a SaaS that has achieved rapid growth from its referral programs. Evernote customers who deliver referrals get points that they can spend on premium features on the app. At the same time, the referrals will also access premium features for a limited time.
According to Evernote’s CEO Phil Libin, the more customers invest in storing their memories inside Evernote, the more they are willing to tell their friends or family how great Evernote is. Libin adds that 13% of the first 100 million Evernote customers came from referrals.
#3: Focus on Retargeting
The sad truth is that not every lead will convert, at least not when you want them to. Also, 95% of people who leave your website will never return. Translated, most users who visit your website will not buy on their first visit. Retargeting is a strategy to draw back potential hot leads that bounce from your landing pages without converting.
Whether your website visitors are there to make a purchase or simply peruse a product catalog, you should always track their movements. For example, if you advertise on Facebook or Meta platforms such as Instagram, you can install the Facebook Pixel on your landing page. That will allow you to track visitors’ post-click behavior and run remarketing campaigns. An example of a retargeting ad on Facebook is shown below.
Retargeting is also effective in lowering advertising costs since it allows you to run targeted ads instead of general ad campaigns.
#4: Improve Your Customer Onboarding Experience
After you’ve signed up the customer for your product, the next point of focus is onboarding. This can include more information about how the product works, what challenges the customer might run into, how to solve them, and who to talk to if they’re stuck.
For SaaS businesses, a frictionless customer onboarding experience is crucial to ensuring that customers don’t churn. A great onboarding experience will also turn customers into brand advocates further down the road. Loyal customers are crucial to your SaaS business in its growth phase.
To make the onboarding experience a success, consider the following:
- Address all critical action points, for example, through a detailed product tour or informative video session with a product manager. You can use HighLevel’s appointment calendar so users can easily book these appointments. All they have to do is click on the link you send them then pick the time they’re available. That easy.
- Keep it simple; users will appreciate a concise experience that can get them what they want quickly.
- Offer personalization options during onboarding.
You may want to consider offering free courses to new users, too. HighLevel’s membership platform allows you to create full courses with unlimited users and unlimited video hosting. Your new clients will appreciate all the effort you put into making them feel “at home” with you and your product.
You may also want to keep communication open during the onboarding process. That can be achieved by providing an actual hotline, an AI-driven chat box, or even prompt AI email responses.
In the case of User Pilot, the application allows the user to customize the profile by choosing a theme color, in addition to adding a filter feature for further customization. The process is quite simplified, leading to a pleasant user experience.
#5: Tap into Automation
Automation is critical when you want to scale your SaaS business and improve your monthly recurring revenue. You can automate repeatable processes – from business operations and internal processes such as email marketing and customer service responses to targeted marketing campaigns.
An example of email automation for a SaaS business is shown in the image above.
The lead visits your product or service homepage and maybe views a demo. Assuming that the lead leaves your product page without making a purchase or inquiry, the automation tool picks up the warm lead. The automation tool will, in this case, send an email to the prospect with an offer for more information or learning resources after a predefined period. You can use HighLevel to automate engaging follow-ups to leads.
If the lead accepts the offer, the automation tool notifies the B2B sales team to take action.
#6: Provide Omnichannel Support
To scale your SaaS business effectively, you must anticipate communication between customers and employees on various channels.
Omnichannel support is among the latest trends in marketing, going beyond simple multichannel support. Omnichannel support integrates communications from places like social media, email, and live chat to provide a consistent experience for your customers.
Coupled with automation, omnichannel support gives your SaaS a wider reach, faster lead response times, and improved customer satisfaction.
Remember that superior omnichannel support means your customers will have a delightful experience, thus improving customer lifetime value.
Rapid growth isn’t guaranteed when it comes to scaling your business. You’ll know you are ready to scale your SaaS if you have surpassed periodic milestones, have perfected your product, have the right team of talented people, and have steady recurring sales, amongst other things.
With a great product, you can start applying marketing automation, revamped pricing strategies, referral programs, and omnichannel support. These will help you to scale your business quickly and efficiently.
But besides these proven methods, there isn’t a “silver bullet” for entrepreneurs to scale their SaaS businesses and achieve success. Instead, successful scaling comes from constant experimentation and learning from the most successful SaaS businesses to achieve focused growth.
Matt Diggity is a search engine optimization expert and the founder and CEO of Diggity Marketing, The Search Initiative, Authority Builders, and LeadSpring LLC. He is also the host of the Chiang Mai SEO Conference.