Sustainable growth for a SaaS company is about creating long-term value that is a) profitable and b) able to be maintained over time without compromising the brand’s reputation. In other words, by building growth, you’re building a foundation for more growth as you go.
We’ll talk about nine marketing strategies that are perfect for achieving and maintaining sustainable growth.
Product-market fit (PMF) is when a business has confirmed signals that its product can satisfy an existing demand in a market with high potential.
The usual sign of achieving PMF is when people are willing to buy the product (even if it’s not perfect yet), actively use it, and recommend it to others.
This is a sustainable strategy because it allows you to make sure you’re building something meaningful that will actually get paying users.
PMF automatically makes your messaging more effective. You’re promoting a product people want. And you already know who you’re talking to, so your marketing dollars are better spent.
Conversely, if none of your marketing efforts seem to work, the problem may be the product and not how creative or well funded your campaigns are.
You can find SaaS companies with product-market fit all around. These will be companies that still offer the same kind of products that made them profitable: Slack, Atlassian, Shopify, etc.
How it works
The general idea is to ship a Minimum Viable Product (MVP) and iterate on it based on real user input until you see that people actively use it and recommend it.
There are five steps in the process:
- Formulate the value hypothesis: Why is a customer likely to buy your product?
- Specify the features of your MVP: The right quantity and quality of features needed to verify the value hypothesis.
- Build your MVP: There are many ways to present your product to your audience; you don’t necessarily need to develop a fully functional product.
- Test the MVP with real users: In other words, get feedback.
- Learn from your users and iterate: Some ideas will need more work, while some are probably destined to fail. Gather your data and make the decision.
When you achieve PMF, it will be time to scale your company and marketing efforts.
This strategy doesn’t need an introduction. We’ve all used product trials and free tools. That said, this strategy can be looked at from different angles. What’s important from a marketing perspective are these three benefits:
- Reduced friction – This means there are fewer objections to trying your product.
- Time to experience the value of the product and get hooked – Reading about a product on a landing page is not the same as experiencing it. Your potential customers will likely expect the possibility to put their hands on the product before they buy.
- Direct marketing channel – You can ask users to sign up for a newsletter or send them messages concerning the product.
For instance, HubSpot carves out parts of the platform for free usage (e.g., CRM, CMS). It does this, as it explains, to increase the force of its marketing flywheel. Or in other words, to propel its entire business model.
How it works
Start by weighing the pros and cons of free and freemium products.
| Pros | Cons |
|---|---|
| Less friction with getting people to use your product. | Harder to manage expectations. People may expect to get more things for free. |
| Bigger user base. | More server load and possibly more queries to support. |
| Works well with growth loops (more on that later). | Offering something for free may reduce its perceived value. |
| Direct marketing channel to signed-up users (content distribution and upselling). | |
| More feedback. |
Getting users in front of free products is only part of the job. The harder part is getting them to upgrade.
First off, you need to set the right expectations—you won’t convert all of them. For the ones that are “convertible,” here are some tactics you can use:
- Never stop improving customer satisfaction. What your product does and how it does it is absolutely fundamental.
- Educate users about the product. Use blog posts, videos, or quick in-app tips.
- Offer limited access to all newly developed features. For instance, you can allow everyone to use each new feature for five days for free.
- Provide excellent customer service.
- Offer flexible payment options.
When looking for ideas for free products that will generate traffic, try a keyword research tool like Ahrefs’ Keywords Explorer. You can:
- Enter features of your product.
- Go to the Matching terms report.
- Use the Include filter with keyword modifiers pointing to tools, for example: “tool, check, checker, finder, analyzer, builder, free.” Set to “Any word.”
To illustrate, our free website traffic checker tool generates an estimated 33.4K organic visits each month from ranking for keywords like “website traffic checker” or even “website traffic.”
Content marketing is the process of creating and distributing content to attract and retain customers.
If you add search engine optimization to the equation, you get a framework for creating content relevant to your business and the reader. You also get a built-in distribution engine that generates almost free traffic.
SEO is one of the most sustainable marketing strategies because it generates passive traffic that accumulates over time and can generate traffic even years after. To put it differently, SEO results are continuous—and you don’t get that with all marketing strategies.
Our blog is an example of such a strategy. It brings an estimated 628K organic visits each month, worth around $860K in ad money, through regular publishing of SEO content.
How it works
SEO is generally worth it if at least one of these is true:
- People are searching for what you sell or do.
- People are searching for solutions to problems your business helps to solve.
- You can give a better solution than the conventional one people are searching for.
In any case, the core of this strategy is to find relevant keywords with traffic potential. The right keywords can connect you with your target audience and create an opportunity to pitch your product. And if you’re not ranking for these keywords, your competitors will.
The process of finding the right keywords for your website is called keyword research. Here’s a quick rundown:
- Go to Keywords Explorer
- Enter industry-related seed keywords, e.g., “seo, digital marketing, keyword, backlink”
- See keyword ideas in the Matching terms report
- Use the filters to refine results if needed (e.g., look only for low-competition keywords or keywords with a certain minimum traffic potential)
Other elements of the SEO process are building a sound technical foundation, creating optimized content, and building links. You can learn how to start with the entire process in our beginner’s guide to SEO.
A user community can help your SaaS product in a number of ways:
- It helps to make the product better through feedback.
- It helps to spread word of mouth about the product even if the community is exclusive.
- It offers added value to the user—they can learn from others in the community and network.
Building a user community is a sustainable strategy because it leverages existing customers and can help facilitate long-term engagement with the product.
A famous example of a community with a price tag on it is Behance, acquired by Adobe for $150M. It generates over 10M search visits each month and allows the parent company to bring the design community very close to its product.
How it works
In a nutshell: create a place where people can meet online, build a constant presence there, and animate the community (feature launches, discussions, polls, etc.).
For example, at Ahrefs, we offer access to our exclusive community, Ahrefs Insider, with every subscription. All we needed to start it was a regular community feature on Facebook. Now it gathers a total of 17K registered users.
Earned media is publicity gained organically from promotional efforts, like press coverage, social media mentions, and search engine rankings.
Earned media is a sustainable form of marketing for these reasons:
- It’s cheaper in the long run compared to advertising (sometimes even free).
- It’s long lasting.
- It earns your brand awareness and credibility.
Here’s an example that checks all three boxes. A while ago, we published a data study showing that 90.63% of content gets no traffic from Google. This article was mentioned by multiple reputable websites, including NY Times, Forbes, and main SEO blogs. All of that coverage gave us free brand exposure and backlinks.
How it works
Earned traffic covers a wide range of marketing tactics, so there’s no silver bullet here. Besides SEO content, which we already touched on, the tactics that are repeatable and will probably have the most impact over time are:
When vetting which site to pitch your product, story, or quote to, you can use Ahrefs’ SEO Toolbar. For instance, say you’re looking for websites that review SaaS products like yours. Just search for your competitors’ reviews in Google and look at the metrics to see which sites can send you stronger links and considerable traffic.
Multi-channel marketing is basically about interacting with your audience using different marketing channels: social media, search, podcasts, email, etc.
Using multi-channel marketing will have the following advantages:
- A broader reach.
- Channels can work to support each other. For example, social media can help you to get links to websites and boost your SEO.
- You create convenience for your audience to interact with the brand.
- There’s less risk, thanks to diversification.
The idea behind this strategy is that your audience is likely scattered across various websites and social media platforms. So even if one marketing channel works exceptionally well, you probably shouldn’t drop all other channels.
How it works
Here are some ideas on how to find the best marketing channels for your business:
- You can see where your competitors promote.
- Do keyword research to estimate organic traffic for relevant keywords (we discussed it in point #3).
- Use audience research tools like SparkToro. Below, you can see a screenshot showing what kind of data about your audience the tool can provide.
Furthermore, using multiple marketing channels allows you to distribute content more effectively. You can:
- Repurpose content into other formats and platforms.
- Build an audience to distribute content directly (for example, grow your email list).
- Promote the content via ads or sponsored newsletters.
- Syndicate articles to other websites.
Here’s an example. Our thoughts on using ChatGPT for SEO were used in a YouTube video, on our blog, and on social media. While there may be some overlap between these audiences, they are definitely not identical. So by using the multi-channel approach, we were able to get more eyes on our content.
A growth loop is a system where new user input creates an output that drives product demand.
To illustrate, here’s how Notion used a product feature to activate and retain users (courtesy of Foundation).
Growth loops are a stellar example of a sustainable marketing strategy because the whole model creates a loop. The more you grow, the more users you get, and so the more you grow.
Furthermore, this strategy gives your marketing budget more “power” since each dollar invested in acquiring a user is also invested in the users generated via the loop.
How it works
The simplest (but super effective) form of a growth loop is making your product outstanding. When your customers **** the product and recommend it to others, you start growing on word of mouth—you acquire users you spent nothing to get.
In some types of products, it’s possible to go beyond word of mouth and create a typical growth loop. It all depends on your product and your creativity. Here are a couple of levers you can pull:
- Make it easier for users to share their work publicly like Adobe with Behance
- Devise a referral program like Dropbox
- Create a marketplace for apps like Atlassian or WordPress
- Release an API like OpenAI
- Encourage user-generated content like G2
- Allow for free product usage after creating a free account like Figma or Loom
- Allow users to invite others to their workspaces like Slack or Miro
Revenue expansion is the additional revenue you get from your existing customers through upselling, cross-selling, and add-ons.
It’s a strategy that has proven to work for decades in multiple industries. For instance, this is why when you order a regular pizza, you’re offered to get a bigger one, get a drink with it, or add some extra ingredients.
And here’s an example from the SaaS world. When subscribing to HubSpot, you’re offered to upgrade by increasing the limit of contacts and also to purchase add-ons.
According to a correlation study published by ProfitWell, SaaS subscription-based companies should aim for 20% to 30% expansion revenue in their overall revenue in order to succeed.
You’ve probably heard that it’s better to retain a customer than to get a new one. That old business adage still holds true. According to this 2016 survey, SaaS companies spend an average of $1.16 to earn $1 on new annual contract value but only $0.27 on upsells and $0.20 on plan expansions.
How it works
If you offer additional value to your satisfied customers, there’s a good chance those customers will be happy to buy more from you. Here are some ideas for creating value for revenue expansion:
- Offer premium features on higher plans
- Offer a per-seat model to cater to both small and large companies
- Add a custom/enterprise tier for the most demanding customers
- Offer priority support
For example, when design tool UXPin developed a way to design with production-ready components, it decided to offer that as a premium version of the product with an almost 80% higher price tag than the UXPin Standard version.
But how to know when and if your customers are willing to expand? Here are some signals:
- Customers often reach their usage limit.
- Customers express interest in additional features or higher tiers.
- Your competitors offer a successful expansion system.
- You’ve got an awesome idea for a premium feature.
Growth marketing is the process of increasing a company’s revenue by applying an experiment-driven and integrated approach to all stages of attracting customers.
To understand this type of marketing better, let’s compare it to traditional marketing and growth ******* (the close variant I don’t recommend).
While the obvious solution for more sales is getting more visitors, this is not always the best one. If the product lacks competitive features and if there are obstacles on the path to purchase, money spent on getting more people through the door will always lead to low conversion and high churn. This is where growth marketing comes in.
A great example of growth-oriented thinking is LinkedIn’s Reconnect Flow. It’s a nickname for the early onboarding process where new users were asked questions about their personal experiences and offered connections to existing LinkedIn users based on that. This simple tactic engaged both new and old users.
Another interesting growth tactic LinkedIn used in the early days was encouraging users to import their email contacts (not a common thing back then). It was enough for 7% of new users to import their contacts to increase the overall number of invitations to 30%.
How it works
The idea behind growth marketing is based on the scientific method: propose hypotheses and validate them through experimentation. In marketing, it’s known as the growth ******* cycle.
The whole cycle starts by gathering data on the buyer’s journey. Next is generating ideas on how to improve and then testing those ideas (for example through A/B testing).
It may seem like an obvious way to do marketing. But it’s not always that easy: Some tests may be hard to perform, and discipline is required. Also, it’s always faster (but not better) to go with your gut.
An important part of the growth mindset is the ability to analytically break down big problems into smaller pieces. This approach allows for setting more achievable goals.
For instance, a goal to increase sales is too vague because sales rely on many factors and not all of them are controllable. Instead, growth marketers may want to discover what “moves the needle.” Depending on the product, this may be encouraging the user to perform specific actions in the product or gearing pricing and communication toward a new audience.
Final thoughts
Sustainable growth doesn’t rely only on the strategies or tactics you choose. You need to give them time to work out the returns. You also need to experiment with them to see what works best for you.
There’s a great talk by Rand Fishkin on the concept of the flywheel in marketing; how the first push is the hardest, but it builds momentum that makes things easier in the long run. Sustainable growth strategies are just like that. As you build more value into your product and your brand, you gain momentum that acts as a multiplier for every new thing you do.
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Source link : Ahrefs.com
