Scaling a SaaS company means growth, but it’s rare that new customers just flood in without working on the fundamentals of your business. Some of the challenges of scaling a SaaS company include:
- Cashflow – Scaling requires investment in multiple areas, which can be costly. It’s important to have cash reserves, because rapid growth may put a strain on your cash flow. Monitor it closely and don’t undervalue your products along the way.
- Customer satisfaction – Keeping customers happy is an ongoing project with no end, but they should always be front and center. The customer guides and shapes how your business evolves.
- Marketing – How do you scale up your marketing without negatively impacting the core business or its customers? Sometimes, scaling actually requires a business to pull back from marketing and focus on soft launches, in order to better manage new customers as the business grows and show loyalty to established ones. It’s a complex balance.
In order to scale your SaaS company, you’ll need to overcome these challenges while attracting new business. Let’s talk about what’s really needed to scale a SaaS company.
Invest in Your Sales Funnel
Understanding your sales funnel is vital and, in order to scale your business, that funnel needs to be rock solid. This means doing your research into what your customers need and want then creating a strategy that will drive them to a sale.
You need to be able to create a scalable, trackable sales funnel with a clear customer journey. How you approach this depends on your industry, how mature your sales cycle is, and the steps it takes to nurture a customer from awareness to sale. For example, a low-cost, high-volume SaaS product will have a shorter funnel than a piece of complex and costly enterprise-level software.
No matter what you’re selling, your sales funnel is your eyes and ears on a prospect’s journey with your business. Tracking it closely and analyzing the results is key. If it’s not fit-for-purpose, it won’t highlight important things like friction points (and how to solve them). Your analytics might show that people drop out of your funnel after the first email following the download of a lead magnet. This might mean your lead magnet is poorly targeted or that you need to do more work on that initial email to better nurture the prospect.
When done well, a good, trackable funnel is the catalyst for optimizing a multitude of strategies – including sales, marketing, and product – something that’s key when scaling a SaaS organization.
Investing in this area is vitally important. Without it, you are simply hoping on a wing and a prayer that the average casual website visitor will morph into a paying customer with minimal effort required on your side. You might invest in market research to better understand the customer journey or you might look at your sales collateral to help get those later-stage customers over the line.
Focus on Customer Satisfaction
You have the chance to turn your customers into your best salespeople, especially those who invested in your product early on. By putting a focus on customer satisfaction, it’s easier to secure reviews and case studies, as well as referrals — all of which can help you secure new business in the future.
Customer satisfaction is often at the core of a SaaS strategy. It’s quite simple: as long as they are getting what they need from you, they are likely to remain a customer. That’s business 101.
It’s important to treat customer support and customer satisfaction differently. Customer support is purely reactive, whereas customer satisfaction has to be proactive. Solving problems before they can occur is a sure-fire way to impress customers and ensure you’re learning from them all the time.
Continuous engagement is important too, as it not only drives customer retention but also enables a business to improve its products through the feedback it receives. Whether that means adding new features, improving UX, or something else entirely, this makes your customers feel like part of your business, which will make them more likely to recommend you to others.
Other ways to track customer satisfaction include:
- Customer lifetime value (CLV), which combines the annual revenue of the customer with the average length of the customer relationship
- General customer retention rate
- Repeat purchase rate (where relevant)
Find the Right People
The right team will take your SaaS business to new heights. Filling key roles when scaling up can be an immense task. It’s challenging at the best of times, but for a fast-growing SaaS business needing to expand quickly, it’s particularly tough.
However, there are silver linings to being in this position. For example, that status as a flourishing organization can be very attractive to the talent you’re looking for. A business that can prove it’s actively scaling is more appealing to some than once that’s already mature and might be stagnating.
For tech roles, this is particularly important. To find the right talent, you need to do more than offer a competitive salary, you need to shout about your company culture, too. These soft benefits are the things that will stand out to the top talent.
When hiring, it’s important to ensure you’re offering appropriate training. Proving to potential employees that you’re willing to invest in them is more likely to inspire loyalty in return. This also allows you to employ the right people, the ones who believe in your ethos and values, which can be more important than a specific skill set.
The fact is, scaling a SaaS business without compromising the core values of the organization – or losing valuable early adopters – is entirely possible and will leave you stronger and more successful for it. With the proper care exacted towards your sales funnel, your customers, and your team, scaling your SaaS company is a cinch.