There are millions of aspiring entrepreneurs with actually really good ideas. But ideas are a dime a dozen. From those ideas, only a few convert their concept into a company. And that’s just the beginning of a long struggle. As per data collected by Smallbiztrends startup failure rate is quite astonishing. Only 4% of small business startups could make it to their second year (2011 data). Investopedia also states that even though every month, over half a million new businesses spur, only 50% of those shut down within less than five years.
The missing component to many of these startups, which may have otherwise been amazing companies, is a robust, growth plan. The plan needs to be strong and reliable and help you scale your business. Mike Simmons says:
“A model will help you answer questions, model different financing scenarios and generally understand your business more clearly.”
Since SaaS is a highly competitive industry, only those strategies that are distinct can help you grow rapidly, and ensure that you don’t vanish in the crowd.
One of the main decisions for you to take while starting up is whether you want to bootstrap your business or would like to raise funding. The availability of funds will play a key role in determining your marketing spend and in budget allocation for growth activities.
Remember, the key here is that with the funds available at present, you need to run your business in a manner that you are able to incur costs, earn profits, and sustain your business successfully. This must happen, year-on-year, for your business’s long-term health and growth. How do you ensure this year-on-year growth? The answer is these following bullets:
- Have a marketing roadmap aimed at growth
- Chart out a go-to-strategy aimed at growth
- Plan for acquiring your first customers and growing your customer base
- Identify tools that will help you achieve your marketing goals and attain business growth
With a ‘SaaS’ perspective, let’s discuss business growth, starting with a marketing roadmap.
Building a marketing roadmap
All marketers need a map that they can follow to reach their ultimate objective – growth. It spells areas of focus and defines micro level goals as well as initiatives that need to be accomplished for achieving the strategic objective.
A roadmap is also important because it binds together the objectives and achievements of the marketing department with cross-functional teams, business objective, and with customers. It details on things like how you intend to meet your customers’ requirements, how you plan to communicate the benefits of your solution, how do you plan to price your product, etc.. Let’s discuss these components of a marketing plan or roadmap, one by one:
Identifying your target market
Know who your customers are, what they need, and what motivates them to buy. These three key insights will help you clearly define your target market. Many times marketers make excuses when asked to create a target market strategy because they believe that it refrains their opportunity to market to a larger chunk of the population.
However, this isn’t the case. More traffic on your website does not mean higher conversions. For example, people not interested in reading aren’t likely to sign-up for your monthly newsletters of a blog. They are certainly not your target market.
As a marketer, you certainly don’t have all the resources or budget in the world to market to everyone. Segment your most important users – those who are highly likely to buy, highly likely to make repeat purchases, and very likely to spend a higher amount than average order value – as your target market. This is what will make your business grow faster, without you having to increase your marketing spend. You can segment your audience based on the following factors:
- Demographic: Age, gender, family size, education, ethnicity, and other indicators who your audience is, are demographic factors that you can segment your audience on the basis of.
- Geographic: Country, region, climate and other information about where your users live.
- Psychographic: Values, lifestyle, habits, motivations etc.
For a SaaS company, if the target audience is “everyone”, conversions will always be missed.
SaaS companies can identify their target audience using feedback from focus groups, or by surveying current buyers and potential users through services like SurveyMonkey.
In a nutshell, the reason why you need to define your target market in your strategic marketing is that it can help you focus on your strengths, develop features that cater to your target audience’s needs, and personalize your communication. All these steps can help you win conversions quicker than the competition and grow exponentially.
Product/marketing fit
Gif source: Giphy
Identifying your target audience is just one small step. There are other more meaningful things that spell growth for a company, such as estimating your product-marketing. It is a key step in the growth of any new venture, where in order to create value for users the company relies on early adopters for feedback and gauges their interest in buying their product or service. While estimating the product-marketing fit, the company also tries to sense and establish whether the wider audience is ready to accept their offerings. Arpit Rai explains:
“If you’ve achieved the product-market fit, in order to grow you need to figure out the main bottlenecks in your growth funnel. Once you’ve figured out these bottlenecks, you need to prioritize them and build strategies to remove each of these bottlenecks.”
Even if you are able to identify the right audience for your product, but you’ve come up with a product or service that the world is not yet ready to embrace, your business is likely to face a setback. Moreover, people beginning to use your product is not everything. They should also get talking and share their experiences with others. That’s when you achieve the product/market fit. That’s when you can be sure that your product is a good fit for the right market at the right time. And, this is what will fuel growth.
In other words, product-market-fit occurs when your SaaS product starts to successfully provide substantial value to your potential customers. Luckily, it isn’t all that difficult to identify your product-marketing fit:
- Define the problem that your product will solve. Write down the challenges that your potential customers face, and create a simple business model outlining your product’s capabilities and how they address these challenges or customer pain-points.
- Test your claims and ideas before rolling them out. Once you’ve decided to tackle the risk areas with new solutions, test those solutions. For example, instead of blindly claiming that your online presence will grow through content marketing, try testing how content marketing works for you before making it a part of your marketing strategy.
- Test the waters by rolling out solutions to a smaller market first. Once you understand whether the feature or solution is able to solve user pain points efficiently, and who are the users for whom the product is truly valuable, you can decide to roll out completely and to the larger market.
Metrics to Identify If You’ve Achieved Product/Marketing Fit
NPS and Customer Satisfaction Surveys: Go by the 40% rule here. If 40% of your early adopters are ‘very happy’ with or consider a new feature on your product as a ‘must have’, consider this feature to be a product/market fit.
Analytics: For an online business some metrics that indicate and verify if the business has achieved product marketing fit include, low bounce rate, low sessions to purchase, increased time on site, increased customer lifetime value, and increased repeat visitors.
Branding
Communicating your product’s benefits to your audience is the essence of marketing. At the same time, you need to make sure that your messaging magnifies your product’s uniqueness.
- What distinguishes your product?
- How does your product solve users’ problems better than other products?
- What level of ease does your product offer?
- How intuitive is the platform?
These are just a few things that SaaS product branding should be based on. Your branding makes a certain promise to your users, and all your effort should be directed towards fulfilling that promise. Delivering on your word translates to happy customers and brand loyalty in the long-term. And that’s the key to growth.
Consider Slack’s branding as an example. Unlike every other tool that was ever made to kill the boring email, Slack is actually delivering on that promise. And their branding is bang-on on making sure that this benefit that they offer always resonates in their customers’ minds. They’ve adopted a voice that’s cheerful and quirky (not like the formal email), such that users can talk about the most serious topics in an informal or even light manner. Emojis are a big hit on slack, for a generation that loves to crunch up words, sentences, and even emotions. Everything about Slack makes it sticky and addictive. And someone who has taken to slack would rarely feel the same love for emails again.
Product Pricing
Putting a price tag on a product is not a random decision. It’s a tough call that has to take into account user’s willingness to pay, market competition, fixed and variable costs that the business incurs to make, maintain, and sustain the product, and various other factors. How do you want users to perceive your product – premium, affordable, or luxury – is also an important criterion that decides your pricing. According to Ryan Law:
“Finding the right balance between value and revenue – your ability to help customers and be fairly compensated for that help – will make or break your SaaS company.”
In the context of SaaS, business growth is directly reliant on improving MRR. And MRR to a great extent is concerned with better pricing. An important thing to keep in mind while deciding SaaS pricing is that it should not just be a reflection of your costs and competitor’s pricing. Rather, it should be a means of increasing your company’s profitability.
So, how do you price your SaaS product? Take note that you cannot think about raising more monthly revenue before unless you can understand how your users perceive the value of what your product. You can also get key insights for determining your pricing by digging into price sensitivity data. Such data might give you cues into important pricing decisions. For example, it can tell you if your product is priced too low and if it is possible to raise prices on certain plans without increasing churn.
- Price as per product versions: Allow the customer to pick what he wants. For example, you could label your product as ‘regular’ and ‘premium’. At a movie theatre, for example, people have the option to choose from regular to executive to VIP seats as per their preference. Ford’s pricing is another example of pricing as per the version of the car a user is willing to buy.
- Provide ‘choose a plan’ option: One of the most popular pricing strategies among startups, ‘choose a plan’ option considers that not all features in a product are useful for everyone. For example, Optinmonster offers four plans – Growth, Pro, Plus, and Basic. While the Basic plan is for those who are just starting up and is priced at $9 per month, the ‘growth’ plan is targeted at businesses who are looking for advanced conversion optimization features that are not really of much use to beginners with little traffic.
- Value-based pricing: As pointed out earlier, users’ willingness to pay is an important factor in determining product pricing. SaaS businesses understand this well and often price their product based on the value that the customer perceives that the product is worthy of. Of course, this model works only when the ‘perceived value’ of the product is higher than the ‘cost’ of the product.
These are some of the pricing techniques in SaaS that can help you price your product in a way that it heralds growth.
Defining Your Go-to strategy
A go-to-strategy is a plan that charts out the ‘how’ of achieving marketing goals. For example, even though you know who your target audience is, it doesn’t fulfill any purpose unless you are able to understand ‘how’ to reach out to the audience in the best possible manner. Similarly, even if you have are extremely clear on your branding, what really matters is ‘how’ you communicate your branding and your product benefits to your audience. So basically, you can’t just stop at identifying your user base. In your go-to-marketing strategy, you start digging deeper to answer questions like:
- What channels should you be using for reaching out to your market?
- What would be the best media of communication?
- Which segment of users can you best serve with a particular feature of your product?
- What should be your positioning – low price advantage, thought leader, world’s easiest tool for a certain task?
Depending on the answers to the above questions and more, marketers can pick one of the following ‘go-to’ strategies for business growth:
1.Dominant: You need to ask yourself two main questions if you are thinking about deploying a differentiated growth model as your go-to-strategy. A) Does your product solve the target market’s problem better than any other competitor products? B) Is your target audience price sensitive and prefers a lower price? If the answer to both these questions is yes, then you can opt for a dominant go-to strategy.
What model should you be adopting for growth? In the context of SaaS, if you are deploying a dominant strategy, your go-to model should be based on ‘freemiums’ and ‘free trials’. This is because you would want your price sensitive users to try out your product and understand that it is really the best at solving their pain points.
2. Differentiated: This strategy is suited to those players in the market who want to position themselves as ‘the best product’ in the market. When you deploy this strategy, you are establishing that your product is not for everyone. And that it is ‘expensive’ because it is better than the rest. You can opt for a differentiated strategy if your answer to the following two questions is a yes: A) Are you offering a niche product or would your users have a superior experience of using your product? B) Is there an underserved or unexplored market willing to pay more for your premium product/service?
What model should you be adopting for growth? One-on-one demos are the best model for market players opting for a differentiated strategy. This model works like a charm in case of differentiated strategy because the audience that wants a niche tool will want a personalized demo before investing their money. They would first want to test the product’s promise and then trust it. As a marketer, this model works best for attracting the right audience, because it gives a chance to showcase HOW your product is a notch above the rest.
3. Disruptive: Now here’s the tricky thing about picking a disruptive strategy – you’ll be serving an audience that’s already being over-served by competition. And, you’ll be pricing your product at a cheaper price. If this caught you thinking that what kind of go-to strategy is this for growth, well, read on. Where users have photoshop for all their design needs, they also have Canva.
Frankly, there is absolutely no comparison between Photoshop and Canva, because a professional designer would never opt for Canva. However, photoshop over serves the needs of a number of users and for such over-served users who are ‘not professional designers’, Canva is a cheaper, much simpler tool to use.
What model should you be adopting for growth? Freemium model is the best fit in this case. That’s because you have to pull an over-served audience to try a scaled down version of an already existing solution. But that ‘scaled down’ version should deliver exceptionally on the one thing that it promises to do. For example, if your tool builds only landing pages and the competitor products has additional capabilities as well, your tool should be able to beat the competitor by delivering exceptionally on building landing pages.
Apart from the strategies and models described above, a go-to marketing plan also defines:
Onboarding Best Practices for your Customers: Onboarding is the starting point of a user’s actual journey with your product. It starts even before someone starts using the product. As the first step towards framing the entire experience, onboarding is extremely important for building a solid relationship with the user, and thus for growth. Some of the best practice in onboarding that your go-to-market plan can include are mentioned as follows:
- Do not overwhelm a new user. Never bombard the user with every product information you have to offer or by talking about all the features that you could think of in your product. Get specific about the user’s need and first show him how your product serves that need the best. Slowly, nurture him to start using other functionalities that he might want to explore.
- Use the phone. Get talking. Email is not the best channel for onboarding, as the user might have questions that he needs instant answers to. Live chat works for sure, but the point is that on phone there is a much more human touch to the whole process.
- Remove friction and make the whole process seamless. You don’t need social share buttons while onboarding. Get rid of them. Make onboarding, simple, sweet and short.
Components of your Inbound Marketing and Content Marketing Plan: Inbound and content marketing efforts make a business ‘searchable’ by a user. These initiatives also help businesses attract, acquire, engage, and retain their users. All this spells growth for businesses. For example, promoting your webinar on your social media pages will grab eyeballs and win you more users. Similarly, using Twitter to share case studies on your successful endeavors will promote your product and can get you more users. Isn’t it a great of growing business all by using content and inbound marketing methods? Your go-to strategy must define the best channels for promotion, the budget you are willing to spend on each of these channels, and types of campaigns that you will be running to attract, acquire, engage, convert, and retain users, during a certain time period.
Another important component of content marketing that your go-to strategy must outline is your marketing automation strategy. For SaaS companies, as we’ve clearly pointed out before, quick growth is the key. And, marketing automation is the only way in which content marketing objectives can be attained quickly. Your marketing automation strategy clearly needs to identify what are you going to automate – lead nurturing, onboarding, marketing campaigns, or customer lifecycle campaigns. You also need to define your marketing spend on automation, which should be based on your user base and current requirements. Don’t waste money on a tool that promises way more than what you really require. Pick a tool that fulfills what you need in the best possible manner.
Benefits of Self Service Business Model for the Product: If your audience clearly understands your product offering, you can allow them to use it on their own, without offering any external help explaining its functioning. Giving users the freedom to explore, understand, and finally purchase the product on their own is a rewarding experience both for the user as well as the company. For the former, it means a better understanding of the product and a familiarity with it. For the company, it means ease of selling. And, less expenses on selling too.
However, your product must provide absolutely frictionless experience to the customer for you to be able to explore, use, and purchase all by himself. Otherwise, if you feel that your product is a little or even a little too complex for self-service to work out, you must have a customer support team for guiding users at all times.
Growing your customer base
Once you have an action plan in place and have clearly understood who your most profitable target market is, you can start planning about how to acquire your first customers and grow your customer base. Just for you to get an insight on how important customer acquisition in SaaS is, check out this infographic.
Finding and acquiring your first customers
Finding your first 100 customers and successfully acquiring them take sweat and blood. Initially, even though you might have a solid go-to plan in place, nothing will work out magically. You will have to experiment and revise your go-to-strategy time and again. But soon, using the right techniques, you’ll be able to attract the early adopters. What are these techniques? Let’s read:
Leverage your existing network
Get on every social channel and start talking to those who you already are ‘connected’ to. You can even ask friends to refer your product to businesses that they believe can benefit from it.
Start within your social comfort zone. From there, move on to seeking help from your existing network of investors. Ask them to spread a good word about the new product that they’ve just invested their trust and money in. Or, if you have more than one business running, you might have a set of preexisting customers who could be interested in your new product offering. Leverage that relationship! For example, you might have built facebook messenger chatbot, but you also have push notifications for e-commerce as a product. You could use your already existing client base as a potential market that you could introduce your new product too.
Explore the power of content
Blog your way to attracting customers to your product. Talk a lot about what your product is and how it solves user pain-points. Serve hot use cases to users aggressively looking for solutions that can easily and quickly help them get what they want. With your blog, try to establish an image of being a ‘thought leader’ in the industry. Creating such a pull can make you land enterprise clients as well.
Smart B2B companies leverage the tone and voice of their content to define their brand. As previously discussed, on such brand is Slack. They are fun and quirky. Consider SaaS-based fraud detection tools as an example. Check out their blog, and you’ll understand that though not formal in their tone, they pick topics that only thought leaders in the industry are talking about.
Utilize social media
In the context of SaaS, social media is not just limited to LinkedIn, Facebook, or Twitter. SaaS business must leverage social media platforms such as Quora, as well as online communities such as GrowthHackers to reach out to potential users who are active on these channels. Participate in discussions happening on these channels and platforms to know what users are talking about your product, to promote your offerings (subtly), and to identify potential customers on such platforms who are specifically looking for a service/product that you have to offer.
Leverage competitors’ market
The best way to quickly build an audience base of your own is to research your competitors’ market. Find out where those using your competitor’s product hang out, nurture these people by sending them free guides and ebooks about your product, show them content that compares your product with the product that they are currently subscribed to. And, slowly nudge them towards a free trial. You could offer a ‘zero migration cost’ benefit to users and make them switch instantly.
Make beta stage trials free
Offer free trials for early birds you are willing to sign-up when the product is in beta stage. This is a quite popular strategy in startups because a) it attracts a larger early-bird audience b) the feedback that your first few customers give about the product during this stage can help you fix drawbacks and make a product that appeals to a larger audience. Once you have a good amount of beta users, you can offer them discounts on sign-up and make them continue their subscription post the beta stage.
A case study on growing customer base
The first few customers are your best judge. You can use their suggestions to improve your product and their good words to publicize your content to the larger world. Ask these early birds to spread their love for your product on their social media and blogs. It is a great way to rope in more users especially if one or more of your early bird users is an influencer. This blog post on influencer marketing outlines why influencer marketing, not just at the beta stage, but at all stages of a business is a great way to grow your audience and business. Give it a read. Also, don’t miss how Viraltag grew its customers from zero to 10,000 using most of the customer acquisition techniques we’ve discussed above. Sudheer Someshwara, CEO of Viraltag, talks about how SEO optimization, social media influencer outreach, and having great content on the website helped Viraltag grow its user base. In his words, “As a growing new business, we’ve put in a lot of effort and resources into creating excellent content for our blog about social media marketing. While it is definitely an excellent repository and helped us establish authority on Linkedin etc in our niche.” He is also wise to mention the importance of being customer-centric for growth. He says, “What I think we’re really good at is maintaining customer relationships – Your customers need to know that they are important and their feedback is valued, and we take a more consumer-centric approach towards our Marketing.” Read the full interview/growth case study here.
Ways to retain your important customers
Acquiring customers is important, but retaining is the key to business success. Your 80% business comes from 20% of your users and your retention efforts should be directed towards keeping that 20 % of the people continuously engaged with your business. How can you do this? Listed are a few techniques:
Offers and discounts: As we have discussed above, you can offer discounts to user’s who show an interest in your product during the beta stage to continue their subscription post-beta. However, while discounting keep in mind that it does not increase churn. Offer the right kind of discounts and you are very likely to witness growth. For example, you could offer a discount to those willing to sign-up the entire annual contract right now. This discount is based on the principle of reciprocity where the customer is also offering his loyalty to reciprocate the discount.
According to Crank Wheel website:
“The aim of a sales rep in a SaaS company isn’t solely to give the customer the best deal to get them on board; it’s to make them a customer for the right reasons — a customer that appreciates value over price. If a customer signs up for no reason other than price, then maybe they’re not there for the right reasons. Because if the price is the primary motivator, a customer will be happy to move to your competitor as soon as their deal beats yours.”
Personalization: Generalized marketing doesn’t work anymore. And, personalization is the key to winning and keeping your customers’ loyalty. A number of email marketing automation tools leverage personalization and customization to keep their clients as well as their customer base happy. Consider this simple example, if your product, which is an email marketing tools lacks the ability to segment users and send behaviorally targeted emails to them, wouldn’t it be a total failure? Here are a few examples of trigger-based email marketing campaigns that were an instant hit.
Great customer service: Undoubtedly, customer service is key to the success of any SaaS product. Happy customers are likely to stay loyal for longer and this is what great customer service ensures. This way customer service can increase your customer’s lifetime value, and help reduce churn. Ultimately, this spells growth for the business. Here’s more on retention optimization for SaaS and why it is the ultimate goal.
4 tools that can help attain marketing objections to fuel growth
Your growth plan should identify the best tools that your teams would be using to attain all their objectives. For marketers, there are a number of tools available in the market, which can help them research, plan, and execute plans, as well as measure the results of their efforts. Some of these are listed as follows:
- Google Analytics: Google analytics is a blessing for any business. It is a simple tool that every marketer is well-versed in, and uses for both kinds of research as well as analysis. From identifying your new and repeat users, to understanding user behavior on your website, GA does it all. Moreover, it is also possible to set up advanced conversion funnels in GA to see how efficiently are your campaigns able to convert users at each stage of the funnel.
- Trello: With Trello, organizing your marketing tasks is as easy as pie. With Trello, you can allocate tasks to your team and keep a timely check on work-in-progress as well as completed task. It’s all so simple that you need not keep following up with team members every hour and rather focus on the core functions of marketing. That’s why you need Trello if you are a rapidly growing business.
- Social Media Management Tools: Social media management platforms such as Sendible, Buffer, Hootsuite etc. automate your social media marketing. They are a necessity for business growth because when your user base increases and is present on all social media channels, manual marketing can be overwhelming. These platforms streamline your efforts on every front, from publishing content on social media to tracking social media campaign results to optimizing campaign performance.
- A/B Testing and On-site optimization: A/B testing and on-site optimization are key to understand what your users really want, what they like, and what might turn them off. Using these tools you can test your hypotheses and make minor or major changes to your website based on how your users interact with it. You can find out user onsite behavior with tools such as heatmaps, visitor recordings etc., optimize the website, fix leaks and bottlenecks in your conversion funnel, A/B test any optimization efforts that you are making, and make further improvements to grab higher conversions.
To Wrap Up
All the strategies and tactics that we’ve listed above should be sufficient for you to understand the A to Z of a SaaS business growth plan. Follow this guide to start creating a robust growth plan today!
