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SaaS products are easy to scale and it is something that helps SaaS startups grow. When the product has paid off, it faces the urge for further growth and development. There are three key ways of how to scale a SaaS product: dominance play (restyling), growth of net revenue retention, and establishing a presence in new markets.
What does SaaS product scaling involve?
For those who wonder how to scale a SaaS business, we are here with some answers. Typically, the scaling process comprises five major processes. They are: building a strong team, software development, product design, marketing, and onboarding stage. Let’s view each of these stages in more detail.
How to scale a SaaS startup: The software part
The most critical aspect of SaaS product development is proper planning. You need to have a clear vision of your target audience, the pains your product will solve, etc. Remember, the more time you spend thinking about the final picture, the less time you are actually coding. The software stage is about scaling the product itself. Thus, this part drives the change to the whole user experience.
How to scale a SaaS startup: The design part
The design part starts before the development stage, but both of them are ongoing. The design part starts with the research and UX. Arter that designers prepare the UI mockup in a tool such as Figma. UX and user flow, however, are more critical.
The design stage is a complex process that comprises four main aspects: research (understanding the customer’s needs), analysis of both app/website you need to improve and the overall market, prototyping, and final deployment with the enhancements. Each of these aspects is critical within the design part.
Remember that the user flow of your product has to run smoothly, or else you risk losing a customer to your competitors.
How to scale a SaaS business: The marketing part
The marketing part of the SaaS business scaling can be seen as a funnel that involves onboarding, retaining, and expanding the customer network. As a result of this funnel, you get loyal customers that are advocates of your product.
If you are just starting your SaaS business, you have to worry about two critical metrics: lead flow and conversion. This will help you kick off your loyal customer base. The deal size is vital in the later stages of your business.
Let’s say you have your SaaS product developed and designed. Your product has to be recognizable, and design plays a significant part in ensuring that. Without a well-designed website and SaaS product itself, it is hardly possible to build a brand.
So, you allure the customers to your website, using campaigns that drive traffic (e.g., social media or targeted ads). Logically enough, the more targeting budget you have, the more potential closed deals come to your site. Without enough marketing budget, your SaaS product will not find its audience and is unlikely to succeed.
Then you ask the visitors to do a free trial and close as many subscription deals as possible afterward. The key metrics, in this case, are the number of visitors on your website, the number of visitors that signed up for the free trial, the number of closed deals, as well as conversion rates between these stages.
How to scale a SaaS business: Building a project team
If you have no experience developing SaaS products, the first person you hire should be an experienced product manager. This expert visions all the required features your product has to deliver. The following person you need is a project manager that takes all the specifications defined by the product manager and turns them into an actual product.
Also, you need designers, developers, and QA professionals to test the product.
As a result of the global talent shortage, finding all the required professionals on-site can be challenging. Thus, many companies go for expanding a team with outsourced or outstaffed experts.
If you need skilled professionals for your team:
How to scale a SaaS business: The onboarding part
You have to educate your customers. It is an integral part of how to scale a SaaS. Without this stage, it is impossible to build a loyal user network. If you fail to communicate clearly who you are and what you do with your product, your potential customer will find someone else.
The successful onboarding part comprises three main aspects: the homepage, smooth onboarding itself, and core value experience. Let’s scrutinize each of those.
How to scale a SaaS: Onboarding with the homepage
There are two core characteristics of your homepage: the hook and the promise. The first one is what your software does. The latter, at the same time, is how it does whatever it does. For instance, MoneyTracker is the fastest way to track your finances (the hook) using reports (the promise). Also, the homepage should provide CTA, e.g., Sign up for a 7-day trial.
How to scale a SaaS: Onboarding itself
Onboarding is about three steps that tell a story. It is about the sequence of actions your user undertakes before diving into the product itself. So, this sequence has to be smooth and logical.
Here are some methods that make user onboarding sessions easier. For instance, if you provide tutorials on using your product, making a progress bar is a good idea. It will help your users understand how much time is left before they start using a product. Also, you should provide the possibility to save the progress and come back to it later. Website navigation, FAQ-sections – leverage all ways possible to make the UX easy.
Smooth onboarding process:
- helps your users adopt your SaaS product promptly;
- reduces the need for customer support;
- lowers the customer churn rate.
How to scale a SaaS: Value experience
The core value of your product means what that moment that will convince your users to stay with you is. This exact moment may trigger VWOM – viral word-of-mouth marketing that, in turn, expands the distribution of your product.
How to scale a SaaS business: Sales Strategy
Here we will come back to the funnel scheme. The sales funnel of scaling a SaaS business comprises five main steps. They are lead generation, qualifying the prospect, pitch, presentation, demo, closing to next steps, and follow-up.
Scaling a SaaS business: Lead generation
So, the first and foremost step of scaling a SaaS business is lead generation. Some experts name lead generation “the most overlooked aspect of sales” because when people do not come in as leads, you cannot walk them through any steps (talk on the phone, do a presentation, close a deal, negotiate, etc.
So, whether you are an established enterprise selling demanded software or a SaaS startup and haven’t built anything yet, you have to generate leads. Lead generation, however, differs between industries. For instance, the best solution for real estate can be calls, whereas, for other industries, an email will do. You can also use social media for lead generation. The best-fitting platform also depends on your industry and the product itself.
You don’t have to stick to a single channel, but you definitely need to find the one that works best.
Scaling a SaaS business: Qualifying the prospect
The qualification or discovery phase, as some experts call it, is critical, as, at this stage, you are asking questions to learn who is ready to buy from you. You try to understand the customer and see if they are a good fit to buy if they have a problem that your SaaS product can solve.
From the tactical level, you get on the phone with your prospect and perform a sales meeting. As you qualify the prospect, the main things you are looking for from a high level are:
- Do they have a pain you can solve?;
- Is that pain bad enough for them to pay to solve it?;
- Do they have a budget to buy your solution?;
- When are they going to make a purchase?;
- What are the other decision-makers involved in this process?
At this stage, you are learning about the prospect, trying to get as much information as possible, and understand if this person is someone who should buy your product. You are not selling yet, though.
Scaling a SaaS business: Pitch, presentation, and demo
Once you qualify the prospect, your goal is to pitch or present how you solve their problem; what value do you provide.
At this point, you actually start selling. If you have your SaaS product already built, you should show your potential customer how it works, is it easy to use, etc. You also need to talk about pain points you have discovered at the previous stage.
You want to show your potential customer how their pain will be solved by the product you provide. There is no need to describe all the features you have, just the ones that are important for this particular person.
Scaling a SaaS business: Close to the next steps
Typically, when you sell a SaaS product, people will not buy it right ahead, as SaaS products (especially those for enterprises) are complex and costly. In this case, you need multiple people involved in the prospect qualification process before they make a decision. Thus, it all takes time.
So, at this stage, you need to understand what is the next step in the selling process for the prospect. Usually, there is an approval process required. To speed things up, you can suggest organizing a meeting with the key stakeholders to present them your product, tell them about the deals you have, different types of subscriptions, etc.
Scaling a SaaS business: Follow up
When selling a SaaS product, not everything goes according to plan. Sometimes things get delayed, or a company does not have a budget to purchase your product just yet or for any other reason.
So, you should always be following up if things go off track. Imagine that you have presented your product to the key stakeholders, and they are interested in buying. However, they do not have a budget for it now.
You can ask them when they are expecting this budget for new software. Let’s say they need six months. So, you ask them the most convenient way of getting a follow-up (e.g., a call, an email, a meeting) and do it in six months.
So, these are the five significant steps of selling a SaaS product. There are, however, some ways of scaling a SaaS business without direct sales. Let’s view these strategies in more detail.
Many Ways to Scale your SaaS Business
Organic growth, investment, and expanding to new markets are the key drivers that will help you with the SaaS scale.
Organic growth is a way of scaling when you do not attract investors’ money or somehow stimulate processes from the outside. This is just normal business growth, without raising funds, on your own growth rate.
It is critical to find people that believe in your product and use it when it comes to scaling a SaaS business. There are many ways you can choose when investing in a SaaS product, but we will focus just on some of them.
- Investing in the marketing of your SaaS product (Google and social media ads, building a solid marketing team, etc.;
- Fundraising or finding investors to implement new features of your product that will solve more of your users’ pains. It can also include building a strong development and design team;
- Investing in changing a sales strategy (building a strong sales team).
It is also a good idea to cooperate with a professional called a startup advisor if you want to scale your SaaS business with investments. Such experts know where and how to search as well as select investors.
Startup advisors can not only help contact your potential investors but also help negotiate with them successfully for your business to get the funding.
One of the most viable choices for scaling a SaaS business is expanding it to new markets geographically and engaging new users. Let’s view both ways in more detail.
You can attract new users by introducing new features to your product. Thus, you address the pains of a new audience and grow your customer network.
If we speak about expanding to new markets geographically, localization is of prime importance.
Let’s say your SaaS product sells well in Europe, but you feel the urge to conquer the US market.
Expanding to new markets is about two aspects: try and experiment. You have a strategy to market your product in Europe – try it in the US and adjust the things that don’t work that well. Typically, you don’t have to develop a new strategy from scratch; just improve the existing one. However, in this case, preliminary market research becomes of prime importance.
So, you need a strong team of business analysts whom you can find both offshore or on-site. Also, you need experienced developers that know how to adjust a product to a new market in terms of its functioning. For instance, when scaling SaaS by conquering a new market, streamlining a content delivery network (CDN) is vital. In a way, CDN plays the role of a local server in a different country. Let’s say you have your European server in Austria.
All requests from your website are processed there, and the website works fast. However, if your American users try to request the same info from the same server, it will take longer, and you risk losing a potential user. CDN solves this problem by caching the information in the US.
CDN is just one of the nuances your developers should know about expanding your product to a new market. So you should pay close attention to the professionals you choose to work with.
Northell Experience in SaaS Scaling
Northell has long-standing experience assisting our customers at each stage of SaaS scaling. Our team of skilled designers, developers, project managers, business analysts, solution architects, and other professionals will help you make the path of SaaS scaling as smooth and effective as possible.
For instance, we worked with MeetAlfred, an easy and advanced all-in-one sales enablement software for LinkedIn, Email & Twitter. The company helps find the ideal target audience fast, create multiple campaign sequences and optimize campaigns to drive even stronger results.
SaaS scaling issues Northell helps address
Not monitoring the conversion rate
The scaling process typically presupposes boosting the marketing budget. As a result of marketing activities, more and more potential users learn about your project. Thus, the number of leads grows. If the scaling process is successful, the conversion rate should increase proportionally or at least be stable. Remember, when scaling your SaaS business, the conversion rate is one of the essential growth benchmarks.
Here at Northell, we help our clients track the conversion rate and prevent it from decreasing.
Focusing on the main feature
Each SaaS product has its core feature – the one that helps address the pain of its users. For example, Meet Alfred is a LinkedIn and other social media automating platform. One of the main features is defining the target audience in this case.
However, the market evolves and presents new products. Your competitors can develop a similar SaaS that can track the engagement, thus addressing one more pain. As a result, you risk losing a user.
To mitigate the risk, you should work on brand awareness, introducing new features (e.g., convenient payment methods, user analytics, push notifications to communicate with your users, etc.)
In fact, SaaS products can be very similar. So, it is important to focus on the user experience and creating a human contact to grow your user network and scale successfully.
Northell helps our clients analyze the recent trends, perform quality competitor research and implement the changes required for effective performance.
Many users of your SaaS product do not buy the subscription when the free trial ends. There are many reasons for that, but the main one is poor onboarding activities. Users must understand the product and its features clearly. Your task here is to explain well.
It is of prime importance to provide quality tutorials, in-depth articles, pop-up hints, and FAQ sections on your website.
We help our clients analyze the so-called blind spots of their websites, identify users’ issues, and address them. Thus we ensure a smooth user experience.
How To Scale a SaaS? Step-by-Step Guide
SaaS startup scaling is a complex task that requires planning, developing the strategy, and finding your niche.
The scaling process itself comprises many different stages, including project audit, market analysis, goal setting, choosing a scaling strategy, and many others. Let’s view the critical steps in more detail.
Project audit is aimed at understanding whether the product has a future with the current growth strategy. At this stage, you will learn if the market needs your SaaS product, how much money do you need to scale it, what areas (e.g., marketing, sales, development) need investment in the first place, if your existing team is strong enough, and others.
As a result of the project audit, you will identify the weaknesses and develop the right development directions.
Market analysis and opportunities
The most critical question – whether the market needs your product scaled is answered at the stage of product audit. The next stage is the market analysis and opportunities.
You should focus on the needs of your target audience and the market overall. Thus, you need to perform a thorough market analysis before you start scaling your SaaS product.
You should know who your competitors are, what marketing and sales strategies they use, etc. And also, try to implement fresh ideas that will convince more and more audiences to choose your product over others available in the market.
After the market analysis stage, you get the whole picture.
This stage is about setting business goals. What will be achieved through product scaling? What value do you want to bring to your users? What is different from the previous version of your SaaS? Answers to these questions will help you identify the best scaling strategy for your product.
Goals can be very different. But the most critical are income goals, aimed number of users, the number of requests, and others.
To define them correctly, here at Northell, we perform decomposition. We assess the needs of your company. It can be about a number of users you want to reach, what revenue you want, professionals to hire, etc. Thus, we estimate how much it will cost to scale your SaaS business successfully.
Choosing a scaling strategy
As we mentioned above, there are three key ways to scale a SaaS product: dominance play (restyling), growth of net revenue retention (investment), and establishing a presence in new markets. At this stage, you need to understand which of them will help you succeed.
Creating a budget and project plan
If you are on a limited budget, you must predict both how much you need to implement new features to your SaaS product and its pricing strategy.
Estimating your project is critical at this stage. Rates of your team amount to the lion’s share of the project cost. However, the rates differ depending on the location where you hire professionals, services you need (e.g., design or software development) you need, their seniority level, and many different factors.
Design and software changes [onboarding]
The design is critical if you want your product to stand out. So, if you are implementing new features, you should also re-design your product. The design influences all later stages of SaaS product scaling. Your main aim at this stage is to combine your business goals and your customers’ needs.
As far as software changes are concerned, improving the existing features and implementing new ones is critical. Thus, your product can address new pains and attract new users. As a result, it will help broaden your user network.
Developing new features and improving existing ones, however, are no simple tasks. It requires regular audits, ongoing work on updates, etc. So, to scale your SaaS product successfully, you need a trusted provider of design and development services.
Here at Northell, we help our clients scale and grow. For instance, one of our clients – Meet Alfred, a sales enablement software for LinkedIn, Email & Twitter, partnered with us for rebranding and moving to the cloud.
The client came to us with an existing working platform with 30,000 users. First of all, we started working on the redesign. In the redesign process, it was decided that it is possible not only to change the platform’s design but also to expand the functionality and help MeetAlfred get closer to becoming a full-fledged Cloud SaaS platform.
For this purpose, we developed new features and sections, improved UX, and updated UI.
We also decided to create a new marketing site because MeetAlfred would change its target audience, niche and expand its capabilities. Therefore, it was vital that the marketing site could fully convey what their current unique value is.
The testing stage allows bringing the prototype to a perfect state. There are three critical stages of testing: interview the focus groups, assessment research, and usability reports.
Eye-tracking equipment captures how a user acts when interacting with the product. After that, the system displays the information, which allows comparing the data of actual use and analytics. Based on this, the product will be adjusted to boost its usability.
Changes in marketing
Typically, the most important part of SaaS product marketing is showing the level of user confidence in the product. You may show how much existing users trust your product. To do so, you need to work with users’ images and their feedback.
Also, your marketing team should track the traffic, the overall number of users, and the ones that use the free trial.
To scale the SaaS business, you should pay close attention to three main aspects of the marketing:
- how much you spend on marketing;
- professionals that perform marketing activities (their seniority level and performance);
- how efficient is your business model.
Also, the success of your business’ organic growth depends heavily on your content-based marketing. If you do not have a website or the website has no information about your product – here is your sign to start working on that.
If you already have content, you want to go to the Google search console, which shows all the terms you are ranking for. Look for the most popular terms and create keyword sets that you will later use to write articles that will feature information about your product.
As a result of such an approach, more people will learn about your product organically.
Changes in sales strategy
At this stage, you want to plan the sales channels you will use. The whole SaaS sales process is described above. However, you should also pay attention to:
- price policy (increase the subscription price;
- sales team (how effective do they perform);
- additional distribution channels;
- cooperation with the marketing team
All these aspects increase sales and, as a result, help to scale your SaaS business.
El voila! Now you can launch your product with new features to the market. But remember, scaling is a never-ending process, so find skilled professionals to work with.
How much do design and software change cost?
Like any other field, the prices for design and software changes vary among regions and the cost of living there. Also, the price depends on the seniority level of the task performers, workload, the difficulty of a task, and a range of other factors.
Nevertheless, some general trends describe the salary expectation in each market.
North American professionals are at the top of the market with the highest rates.
Rates in Western Europe are slightly lower than those in North America, though they are still high. Also, you should keep in mind that prices may differ drastically among countries in the region. For instance, rates in Spain are much lower than in Switzerland.
The labor market in Eastern Europe presents an optimal price-quality ratio. It boasts a vast talent pool of over 1M experts, agencies, and companies of all sizes that offer versatile expertise. At the same time, the rates here are lower than in the US and Europe, as the cost of living is also lower.
The design and software development market in Asia is presented primarily by experts from India. The country boasts a large talent pool and the lowest prices worldwide. Although the quality of services there is hampered by the low level of digitalization in the country and cultural mismatch.
Average rates per technology:
|Tech stack||Eastern Europe||Western Europe||South America||Asia|
Average rates for design:
|Product discovery||UX design||UI design||Usability testing|
|Price per hour||$25-55/hr.||<$45/hr.||<35/hr.||<30/hr.|
Frequent mistakes in scaling the SaaS product
Failing to scale a SaaS product successfully can be caused by a wide range of factors. Let’s view some of them in more detail.
- The market may not need your SaaS project, as the pain it solves is not that significant just yet;
- The poor market research;
- Lack of skilled experts in your team;
- The poor design of your product;
- The high competition in the market;
- Failing to understand the user needs;
- Wrong marketing and sales strategy.