Before we go into detail on how to grow a SaaS company, let’s have a closer look at the definition of a SaaS company. It is based on the Software-as-a-Service (SaaS) business model which takes the service-oriented architecture as a foundation based on cloud services. This means that customers can access software from anywhere on the web by addressing the corresponding SaaS platform.
Every founder dreams of high revenue and thinks of how to grow a SaaS company fast. Below are provided several tips on developing your SaaS company along with several considerations on how quickly should a SaaS company grow. Or in this article, you can learn more about application modernization strategy.
Listen to your customers
We are approaching the time when Industry 5.0 enters the scene. This means that technology is developed for people based on their needs. That is why you should listen to the suggestions and requirements of your customers in order to produce a product or service that would be necessary for them.
For instance, if you are developing a smart online solution for project managers, you should analyze incoming feature requests. That way, you will be able to plan your future release properly and develop those features that would be useful for your current and potential customers.
Acquire new users
To grow your SaaS company, you should constantly explore the market niche you target and any competitors if present. Inspect what users are looking for and what features other similar software solutions offer. To acquire new users, you should also develop your distinctive feature which would make value.
Calculate everything
To measure the current growth of your SaaS company and establish goals for future quarters, you should monitor the current indices. Calculate CAC – the amount spent for each customer to acquire compared to the actual number of conversions. Another indicator CHUM implies that you have to calculate the ratio of canceled subscriptions to the current or new ones.
Advertise your service
Advertising is a key to product sales increase and the overall growth of a SaaS company. However, you should properly distinguish which advertising platforms and services to rely on. Recently, advertising a SaaS solution with creators/influencers in a certain niche have been showing great results.
How Fast Should a SaaS Company Grow?
To evaluate your efforts applied to the development of the SaaS company, take into consideration your current growth rate and the expected one. In general, the average growth rate for SaaS companies varies between 15% and 25% depending on the industry.
To calculate the monthly growth rate of your SaaS company, subtract the first month’s revenue amount from that of the second month’s revenue. Then divide the obtained value by the first month’s revenue and multiply it by 100% to obtain the final result. In case the value is between 15% and 25%, then your SaaS company grows fast enough. Otherwise, it grows either slowly or extremely fast, so the developed strategies should be reviewed and adjusted.
You should also keep in mind that the monthly growth rates will change over time. Each business passes several stages on its way as shown in the chart below.
