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Who wants to grow their SaaS company? Everyone? That’s what I figured. “Growth” is such a sexy yet nebulous term in the tech world. Everyone wants it, but it’s hard to pin down actual strategies and tactics. Thankfully, Nathan Latka stopped by SAAS NORTH to give a virtual strategy session on 18 growth tactics for SaaS companies between zero and $10M+ in revenue.
Read the synopsis below or watch the actual webinar here
Growth is the lifeblood of SaaS. But every company’s success story will be different, and the tech world is littered with failure stories of companies that tried the wrong tactics. In a strategy session for founders, growth expert Nathan Latka shared 18 different tactics for SaaS growth, broken down into three categories: $0-$1M in revenue, $1M-$10M in revenue, and $10M+ in revenue.
The nascent stages of growth usually rely on creativity more than brute force, since your fledgling idea is likely under-funded and in a race against time.
Strategy 1: Do a Product Hunt launch the right way
When Unicorn Platform launched on Product Hunt, the team tried everything. It worked. Looking back, they noticed two elements had the most significant impact on their success:
The first comment: The team used the first comment to explain why they founded the company, how to get in touch with them, and their vision for the future. This helped humanize the organization and encourage people to give a crap.
Launching at 6 am: The key to success on Product Hunt, said Nathan, is velocity of upvotes. By launching at 6 am, the team caught everyone just as they were waking up, commuting, or otherwise checking their phones (and thus would be more likely to upvote).
The key to freemium success is directly connecting your usage metrics to value. Put another way, if someone gets more value from a specific metric, that should become your lever to move from free to paid.
Examples of usage metrics:
Instead of building your own hosting ecosystem to start, consider building on existing app exchanges. 10web used WordPress, but you could also use: Hubspot, Salesforce, Shopify, Zoom, Quickbooks, Zendesk, or a myriad of other platform companies.
If you go this route, make sure to ask for reviews from every happy customer. Most app exchanges float apps to the top based on reviews, so the more you get, the more exposure the exchange will give you.
Loom hit nearly $1 million in revenue in 24 hours. How? They used “Powered by Loom” branding in the bottom corner of their free tier product.
If someone wanted to remove the “Powered by” branding, they had to pay. This not only helped drive revenue for companies wanting a professional look to their videos, but free customers virally marketed the Loom brand every time they sent a video.
ClickFunnels used the same strategy in its early days, and it now accounts for about 12% of the company’s revenue (which is now about $1 million per month).
Want a better place to connect with your early fans? Build it for them!
This strategy became the foundational growth strategy behind a lot of fast growing companies, and the process looks like this:
Worried about building for an app exchange and want to keep things in-house? No worries - build a Chrome extension instead.
Chrome has over two billion users, so an extension that makes it easy to get value from your app means a lot more potential customers. Just be sure to ask for reviews (same as with app exchanges), since that’s how new extensions get more visibility.
So now people are buying. But can you break out of this revenue segment and into scale mode? Here are things to think about.
This is a fairly simple one: exclusively set up ads to retarget people who have visited your website in the past 30 days. That’s it to start.
Nathan said if you’re already driving traffic through other means (paid or organic), retargeting gives possible customers another touchpoint.
Help other people make tons of money by selling your products. The key to success here is to taper off your payments:
This way you keep margins as you scale and retain the customer, especially since you - not your partners - will be investing in customer success long-term.
Instead of just asking for backlinks to a blog or to your business, give people a reason to backlink: create a ranking, awards, or other activity that promotes other people in your industry.
This helps in a few ways:
Selling begins with experimentation and scales up once you have a winning formula. One of the best ways to avoid unnecessary costs in the experimentation phase is to outsource.
Nathan said VCs kind of hate SaaS companies that do professional services, but he still recommends it for two reasons:
“Touching your customers with professional services is a brilliant net dollar retention strategy and the extra cash doesn’t hurt,” said Nathan.
Similar to channel partners, Nathan suggested using affiliates to help grow your business. ConvertKit said it has around 100 affiliates making over $10,000 per month - with some making over $25,000 per month.
Ready to really grow? The tactics start getting a bit esoteric, but they all build a growth flywheel that fuels your rocketship.
When you write a book, you demonstrate expertise on your topic. That’s a win by itself. But there’s even more for SaaS founders:
Selling the book becomes a revenue source that can be fueled into further marketing spend.
Launching a successful book gives you a platform to gain organic media coverage (Nathan said he leveraged his book into a regular commentator spot on cable news, which allows him to talk up his new products and services).
If writing isn’t to your taste, try the other media route: podcasts.
You get to build a direct connection with your audience because you’re talking to them on a regular basis, sharing knowledge. From there, you can repurpose content into a blog or potentially a book down the road.
Good sales teams need two forms of regular tweaking:
The balance of team members: SDRs to AEs to CSMs. Anchor more on SDRs in the early days then tweak as you go.
The balance of revenue: Nathan said a healthy sales team should keep a 5:1 ratio of revenue to earnings with a 50:50 base versus on-target earnings bonus split. So if a sales rep brings in $1 million in revenue, they should earn a $100k base and a $100k bonus for on-target earnings.
ZoomInfo’s sales team balance as it scaled
SaaS makes revenue on subscriptions, but you can grow by adding another revenue model:
% GMV: You make money when your customers make money.
Marketplaces: Take a cut by connecting buyers and sellers (or connecting apps with users).
Services: Do more on top of your tech.
IoT products: Sell the physical sensors that make your tech work (if this applies to your business).
Acquisitions are a time-tested way for companies to grow.
When looking to acquire, Nathan recommends focusing on the three things that matter:
You can purchase for any single variable or a combination of the three, but don’t acquire for any other reason without one of these three things as a justification.
SaaS subscriptions can charge based on three different axes:
If you’re only upselling based on one, you should consider adding another axis. Just make sure it’s tied into value as well, or else you could alienate your customers.
These 18 growth strategies worked for real, live SaaS companies and helped them earn millions in revenue. However, this list isn’t exhaustive. There are so many growth tactics out there, so don’t think that if these don’t work for you then nothing will. Instead, consider each growth tactic to be an experiment: think of your target buyer as a destination and your growth tactic as a vehicle to reach them.
Want to learn more about growth? Join us IRL at SAAS NORTH to attend Nathan’s growth workshop