The SaaS business model is one that has been gaining considerable momentum in recent years. The need for useful services and innovative marketing strategies has become the need of the hour. Knowing how to hack your SaaS business growth is key.
63% of businesses prefer SaaS because of more flexibility to changing marketing conditions and 58% due to business continuity.
80% of businesses use at least one SaaS application. Although these statistics look promising, you need to realize that a company needs to keep growing if it wants to survive.
So, how do you grow your SaaS company in a way that will not just help you stay afloat, but keep you way ahead of your competition?
In this article, we’ll talk about the main aspects you need to focus on to grow your SaaS business. We’ll also dive into some super useful growth hacks that will help you acquire an active audience, turn them into customers, and expand your business.
Are you excited? Let’s start!
Keys to Grow Your SaaS Company
There are three main contributing factors to SaaS business growth:
- The size of your target audience
- The average revenue per user (ARPU)
- Your churn rate.
To scale your SaaS business, you need first to understand these factors on a deeper level.
1. Target Audience
You need to build a substantial audience before you plan to make any business from them. Gone are the days when a couple of generic ads about your business would convince your audience.
So what do you need to do to grow your audience? For starters, identify your target customer. There’s no use having a huge audience when not one of them is very likely to invest in you.
Figure out your customer’s challenges and create a niche tool that can help them tremendously in one or more aspects of their business. Remember, you can never be all things to all people.
Determine who you are going to help and how.
2. Average Revenue Per User (ARPU)
The untold truth about growing your business and significantly increasing your revenue is this:
Understand your customer’s value.”
Realizing the worth of each customer will help you:
- Streamline your marketing efforts
- Set realistic revenue goals
- Determine what ways you can implement to increase your overall revenue
The simplest way of calculating how much a customer is worth to you? The average revenue per user.
ARPU tells you the average amount of revenue each user of your service generates for you. You calculate it by dividing the total amount of revenue generated during a specified period by the number of active users in that period.
3. Customer Churn Rate
Customer churn is when your existing customers stop doing business with you for whatever reason.
Although it may sound painful, the hard fact is that every company (no matter how big or small) has a customer churn rate. Once you’ve let that sink in, it’ll be a lot easier to handle.
The first step to addressing customer churn is by finding out what that means for your company. Are you going to measure it by the number of canceled subscriptions? Or by the number of closed/ inactive accounts?
Once you’ve found a way to calculate the churn rate for your business, you can move on to fixing the issue.
What are the Ways To Help Grow Your SaaS Company?
Now that you have understood the importance of identifying your target audience, realizing the value of each customer, and measuring your churn rate, let’s move on to the growth hack tips for your SaaS company.
Here is a list of things you can do to grow your target audience, increase your ARPU, and significantly lower your churn rate. – Read more
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