Dropbox, MailChimp, Slack, and many more applications that we use on a daily basis are categorized under the Software as a Service(SaaS) model. SaaS applications are literally eating the world and this trend seems to have big chances of being even more boosted in the coming years.
As many founders are building some high-end SaaS apps, many of them are still not sure how to sell their products and how to grow their users base. So in this article I will highlight the main steps founders need to focus on in order to grow and acquire new customers, and at the end of the article I will leave some bonus links that helped me kickstart and grow my subscription list.
Simply put, a SaaS growth strategy has to focus on the following main points: SaaS Lead Generation, SaaS Lead Conversion, Customer Retention, and SaaS Referral Marketing. I will go and explain how to successfully execute each step one by one.
There are various ways of how a SaaS can generate leads, and almost all of them revolve around directing your potential users to a specific landing page. A landing page is designed with the intention to capture information about your leads by asking them for an email address, a phone number or to sign-up to your SaaS.
One of the most effective ways to direct leads to your website is by producing relevant content and sharing it with the communities that are more likely to be interested in your product. For example, if you're building a to-do app or time management app it would help a lot to highlight your app's value proposition in an article and share it with productivity-focused communities on Reddit, Facebook etc… This way, many interested potential users will be directed from that article to your landing page.
Another great way is to identify active influencers in your industry and convince them to share your content on their blogs, videos, or social profiles. This will bring loads of traffic to your landing page but is a relatively hard way for first time founders because it demands either a good amount of reputation or a good amount of money to get the attention of relevant influencers.
SEO is also a big factor in generating leads to your website, however it is a very broad and complex topic and without the right tools in place you will get lost very easily. Here are 9 basic tips for Search Engine Optimization
Lead conversion is the next step following lead generation. Lead conversion can be broadly split up into two main steps:
The reason why you should approach these two different conversion points independently is to be able to capture specific statistical data that can shed more light on where improvement is required. For instance, if you are getting a poor visitor to sign-up conversion rate it can be because:
You are not getting targeted traffic.
You are incorrectly addressing your audience’s pain points.
Your messaging is not compelling enough.
Whilst if you are getting a fairly good visitor to sign-up conversion but then failing to convert those sign-ups into paid customers, then the problem might be:
Your SaaS contains unfixed bugs
Your SaaS is missing important features
Your users feedback is not Implemented
Unlike, acquiring and conversion, retention is a topic that is given less importance despite its major role in determining the fate of a startup. Some critical insights retention rates can point out include:
Whether or not the solution provided is really solving the pain of the customers.
Whether customers being acquired are effectively targeted or just random.
Whether or not your pricing is reasonable.
Whether or not your SaaS value proposition is clear to your customers.
Having a very low retention rate might mean that all the efforts done to implement lead generation strategies and customer conversion go down the drain as once customers convert are vanishing. One simple strategy that might be used by startups to retain their users is offering advantageous annual pricing. This is because most SaaS companies require more than a month to be able to show the full potential of what they are capable of doing and obviously by converting customers to an annual plan you will have plenty of time to focus on providing long term value rather than focusing on making sure customer renews their subscription the upcoming month. Additionally, selling monthly is very hard as most users churn because of lack of understanding of your SaaS and how valuable it is.
Some other useful customer retention strategies are:
The main purpose of any referral marketing campaign is to acquire new customers. But if played well, a referral strategy can help in both acquiring and retaining existing SaaS users. Check up here how Dropbox gave away 500mb of free storage per new referred users. These rewards were attractive enough to make Dropbox go viral. But that was not the only benefit Dropbox got out of it. Owning an upgraded Dropbox account, with plenty of bonus storage space for referring several users to Dropbox, offers plenty of reasons why one will stay using Dropbox and will not switch to a competing service.
When designing a SaaS referral marketing campaign, make sure that the rewards you give out are stackable. Stacking rewards will keep making it attractive to refer more and more friends but will also help in drastically reducing churn, building a resilient user base that will not switch to a competing service that might come along in the future.
Another great referral strategy is creating FOMO or fear of missing out for an early access or an exclusive upcoming feature. Almost any successful referral marketing campaign had some kind of FOMO that helped pushing it. FOMO will push referrers to act and share your campaign. The best example of this kind of strategy is Robinhood app, just one year prior to launching they managed to build a waiting list that had almost 1,000,000 emails! and one of the main drivers behind the RobinHood referral marketing huge success was FOMO.
RobinHood had their waiting list in invite only mode so most visitors simply signed up in order to make sure they reserve a spot to this exclusive/upcoming trading app.
When well executed these four basic steps will enable any SaaS to get their first paying customers and establish a great MoM growth rate.
The following are some useful links that helped me personally create a 1k+ subscription list: