SaaS and ISV strategies for user growth

July 16, 2018 Saas & Platforms
By Owen Linderholm, Senior Content Strategist
By Owen Linderholm, Senior Content Strategist

User growth is the lifeblood of SaaS businesses and ISVs – and churn is the force draining away that lifeblood. Company survival depends on continuously adding new users and keeping them on the platform. The pieces below offer strategies for maintaining user growth.

A good place to start is a comprehensive look at the metrics that a SaaS business or ISV should track in order to understand user behavior and focus on user growth. Ryan Law, CMO of Cobloom, wrote this piece on Medium which looks at both growth metrics and churn metrics. Look out for links to other sets of SaaS metrics that support later stages in SaaS company growth.

On the Inturact blog, Trevor Hatfield takes a look at a really fun approach to reaching your first users in order to set yourself up for growth. It’s fairly consumer-oriented thinking so those on the enterprise end of things will have to abstract the ideas a little bit, but consumer ideas do often translate well to the enterprise world.

Arpit Rai of WebEngage wrote a series on SaaS growth at the HackerNoon blog and part one covers business and user growth at the earlier stages of a SaaS business. He uses a typical hourglass model (funnel then growth) with acquisition, conversion, growth and expansion and addresses each of those stages.

Looking more at the tactical end of things but with added analytics and research data across industries, the McKinsey blog takes a look at driving growth through customer success. “A relentless focus on customer success allows technology and SaaS companies to lower gross-revenue churn and keep it there.”

Ty Magnin of Appcues continues the customer success theme with a set of interviews and advice from 16 SaaS executives that drive growth by taking care of their customers. “Caring about customers and helping them reach their goals may seem a natural quality for a successful SaaS company, but it sometimes gets lost amongst other goals and initiatives.”

On the Chaotic Flow blog Joel York has a piece about driving SaaS growth throughout the customer lifecycle, which covers the full gamut from winning new business to avoiding churn. “The three fundamental SaaS growth levers: customer acquisition rate, customer lifetime value and viral customer network effects arise naturally and sequentially as a SaaS business matures.”

The earliest stages of a business can be the hardest to drive customer growth, even if you are confident about product fit and that you have a solution with built-in demand. Steli Efti on the blog talks specifically about this stage and getting from 10 to 100 users as fast as possible.

So what to do when all your growth is starting to slow and you are beginning to see the dreaded signs of rising churn? Andy Jiang at ChartMogul has some answers in an article looking at hitting the SaaS growth ceiling as churn starts to take hold. “Calculating your business’s growth ceiling is another way to measure and understand its growth dynamics. Knowing when and where your business will plateau will not only motivate you to act in advance, but plan accordingly to impact key metrics such as churn or LTV. Often, the actions set in motion will not produce results overnight, but will take a long time before you can see a noticeable difference in your growth.”

Following that theme, the Chargify blog has a piece on twelve approaches to take when your growth has stalled out. “Stalled growth happens to the majority of SaaS companies, at one time or another. While growth is not likely to be turned back on within a few weeks, it is important that you start making changes today.”

About the author

Owen Linderholm, Senior Content Strategist

Owen Linderholm is Senior Content Strategist at WePay. He has previously held content and editorial roles at Yahoo, Microsoft, IDG and the BBC.

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