6 Important Factors that Lead to SaaS Growth

Business owners are always looking for the perfect recipe for the growth of their company, but not all of them look in the right places. Software as a service (SaaS) companies and companies which offer online services often become million-dollar giants in a short span of time, but start falling down the spiral when it comes to sustained growth. How to find new sources and methods of growth when the old ones die down?

McKinsey describes growth as a process which is fueled by several factors. In a detailed study of several companies and their journey, McKinsey found out that growth trumps all other factors.

Three pieces of evidence attest to the paramount importance of growth.

  • First, growth yields greater returns. High-growth companies offer a return to shareholders five times greater than medium-growth companies
  • Second, growth predicts long-term success. “Supergrowers”—companies whose growth was greater than 60 per cent when they reached $100 million in revenues—were eight times more likely to reach $1 billion in revenues than those growing less than 20 per cent
  • Additionally, growth matters more than margin or cost structure. Increases in revenue growth rates drive twice as much market-capitalization gain as margin improvements for companies with less than $4 billion in revenues
  • Further, we observed no correlation between cost structure and growth rates

Nobody can provide you the recipe to grow in the SaaS industry, because there isn’t a single one. You need to figure out the ‘how’ part of it. Some factors remain constant, and you should research further into them in order to find out potential chances of growth. Mentioned ahead are a few of such factors that you need to keep in mind for your company to grow:


Increasing sales is every business owner’s dream, and it is also a huge challenge when you work as SaaS provider. Every business needs to track its sales funnel and gain important insights from the previous acquisitions. See how many people visit your site, upgrade to premium versionand activate a widget or sign up for free trial. Track the people who go through each of these steps to the next step. This will help you decide which part of your sales funnel needs more attention.


Some of the most common issues with SaaS customers are price and retention. How to make people stick to your service? Companies have to price their offerings in a better way if they plan to sell the service for a long period of time. Since the majority of subscriptions come from cloud users, renewals are a must have. To make people renew their subscriptions, pricing has to be flexible.

Moreover, SaaS executives need to provide great customer experience and also offer something new to interest the existing customers. For example, if you sell a small business sales software, you can introduce discounts on special times of the year or reveal promo codes for customers who also sign up to the mailing list.


In the internet age of today, SEO is basically unavoidable. SaaS executives should learn about the possibilities of earning new customers via SEO. SEO does seem a bit intimidating, but it doesn’t have to be. Great SEO involves the production of great content and the promotion of this content on the most relevant platforms. There are so many tools out there which can help you do this job in a better way. Every other social media website is now offering a business account and many metrics to follow for each posts. Make use of these metrics to find your target audience and give them the content and service they need. For the technical side, you can either learn more about SEO through platforms like Moz or its alternatives or outsource the tasks to an SEO agency.

Influencer marketing

In simple words: ask someone else to market your business. That’s why; referral marketing is the best form of marketing out there. People love to believe in the word of others, especially when choosing a service. The best example of this case is Dropbox.

If you have ever used Dropbox, chances are that you referred it to a friend, or at least read about the option. Dropbox promises free storage to you for every referral you make. They followed a simple method of making their customers market the product, and the result is clear. Dropbox and cloud computing are considered to be the same thing now. This simple trick made them a $4 billion dollar company and earned them loads of new customers through referral.


SaaS leaders often face difficulty in effectively managing the product offerings. If there is a lack of product usability, it is troublesome for the growth of your business. In many cases, the product offering is the company. That’s why, many business owners are worried about the stickiness of their product and its usability. If customers have subscribed to your service and they enjoy the experience, they will resubscribe and continue to avail the benefits. However, if there isn’t a seamless user experience, these customers will just subscribe to someone else. SaaS executives must think of new offerings to keep these customers glued to their service.


There is just something with customer psychology which can always help you seal more deals. One of them is exclusivity. People love to feel exclusive on the internet and then brag about it. If you can succeed in making them feel exclusive, you may witness more growth.

LinkedIn is a good example of this strategy. They made their users feel exclusive. By inviting ‘professionals’ to sign up and become a part of the ‘largest professional network’, they created a sense of exclusivity. It meant that whoever signed up on the platform was a professional. In the time when Facebook and Twitter were grabbing all signups, LinkedIn succeeded to grow as a large network based on exclusivity.

Bottom line

As mentioned arlier, there is not one recipe for success. You need to figure out your key metrics and the KPIs by yourself and then work on them to drive your growth. Many business grew on the basis of growth hacking and are now growing at a sustained pace because they didn’t rush into too many KPIs at a time.

The factors mentioned above are going to help you move in a positive direction, and you can effectively combine them with your business strategy to grab more customers.

From the end user’s point of view, there are numerous good quality SaaS solutions in every niche. Read our buyer’s guide to SaaS software to separate the wheat from the chaff and select the best platforms to expand your business.

James Anthony

By James Anthony

A senior FinancesOnline writer on SaaS and B2B topics, James Anthony passion is keeping abreast of the industry’s cutting-edge practices (other than writing personal blog posts on why Firefly needs to be renewed). He has written extensively on these two subjects, being a firm believer in SaaS to PaaS migration and how this inevitable transition would impact economies of scale. With reviews and analyses spanning a breadth of topics from software to learning models, James is one of FinancesOnline’s most creative resources on and off the office.

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