Last year, the global SaaS market was valued at $130.69 billion, with this figure expected to rise to $716.52 billion by 2028, achieving a CAGR of 27.5% between 2021 and 2028.
Since the pandemic, rapid digital transformation and increased cloud adoption have accelerated SaaS market growth, resulting in a wave of start-ups entering the field. SaaS companies must now navigate increased competition and act fast to capitalise on any opportunities that come their way.
2021 was a record breaking year for SaaS IPOs, with 27 companies raising over $15 billion in total capital from public markets. It’s clear that the way to stand out in this crowded and highly competitive SaaS market is to grow. And fast.
However, how fast can your business grow? And is your GTM team ready? Here, we look at five ways you can unlock the SaaS hyper-growth you need to join that coveted unicorn club.
1. MAKE CUSTOMER RETENTION YOUR GOAL
Focusing on customer lifetime value, recurring business, and retention is not a revolutionary concept, but it’s pivotal for growth. To generate recurring revenue, your business must make customer success your goal. Rather than having a product that solves a single problem, look at the strategies you can implement to ensure the product delivers long term value. It requires you to adopt a highly customer-centric approach and build genuine relationships where communication and feedback are a two-way street.
2. CARRY OUT PRICING EXPERIMENTS
Experimentation carries an element of risk, but it’s essential if you’re looking to boost revenue. SaaS pricing is notoriously tricky to set as it must be based on your customers and competitors along with the type and quality of your product. With so many factors at play, pricing experimentation is crucial to help you hit a sweet spot and ultimately make more money. However, for price experimentation to be successful, you must be able to compare data and create new pricing models quickly to avoid customer churn from sudden changes. It should be something you continue to analyse and optimise as the business grows.
3. USE THE RIGHT METRICS
Investing time in data quality, systems and reporting from the outset gives everyone in the business the tools, information and confidence they need to make better and faster decisions. Furthermore, knowing the proper performance measurement methods at the start-up stage enables you to set the right benchmarks and strategies for high growth from the outset. Never underestimate the power of setting SMART (Specific, Measurable, Attainable, Relevant, Time-based) goals.
4. FOCUS ON PRODUCT-LED GROWTH
Opposite to sales-led growth, which depends on sales staff to serve customers, product-led growth positions your product as the primary growth tool. A popular SaaS go-to-market strategy, it requires everyone in the business to maintain a laser focus on the product and how it can help attract, retain and level up customers. Crucially, for this methodology to work, customers must engage directly with the product and be able to derive value from it quickly. Some companies offer free trials or free basic packages to attract customers' attention, allowing them to try before they buy to gain a clear picture of its benefits and how it fits in with their business and goals. Examples of this working exceptionally well include Zoom and Dropbox, which grant free access to basic features and the option for the customer to upgrade themselves to higher-level paid features.
5. EXPLORE GLOBAL MARKETS
Expanding your global presence can increase revenue and open the door to new markets. SaaS was made for international expansion, given that cloud platforms can be accessed worldwide. However, it's not always straightforward and requires you to overcome key operational hurdles. You need to plan and be prepared for handling international payments in multiple currencies, all of the relevant legal and regulatory compliance issues, language requirements and localised pricing. Despite the challenges, expanding can be done quickly with the right tech stack and agile framework in place. Not convinced? Bear in mind that 89% of unicorns expand internationally before they hit their billion-dollar valuations, according to Stripe. Food for thought…
SUPPORT IN BUILDING YOUR GTM TEAM
At Strive Sales, we source top tier sales talent for hypergrowth tech companies. To learn more about how Strive can help your business scale, contact our team on 0203 983 0770 or email hello@scalewithstrive.com.
