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Good news seems to be a rare commodity for most SaaS companies these days. Braves who went public saw their stock prices plummet a year ago. The tech-heavy Nasdaq is already down more than 30% this year. High-growth startups are seeing their funding and valuations drop as profitability replaces growth as the primary driver of value. Early-stage startups are being forced to drastically cut costs, rethink funding strategies, and take on high-risk debt, with survival becoming the #1 goal. I didn't even mention the layoffs.
As a result, SaaS companies, which until recently saw all costs go up, are now trying to make a profit without running out of cash or accepting small contracts.
What if I told you there was a silver lining? Yes indeed, this is an opportunity across all technologies to take a deep look at the businesses we run and come away with something that will be better and more sustainable for everyone in the long run. Well, that opportunity is here. It's true. And that's great.
Related: 5 Growth Hacks for Your SaaS Businesses
Build your sustainability engine
While more mature SaaS companies likely have enough market capitalization or private equity to weather the current downturn, many growth-stage companies have only one option in an environment where capital investment is n is cheaper and more plentiful. They must create efficient and sustainable engines of growth, and they must do it now.
In my conversations with customers, as well as a Gainsight survey of top SaaS investors and CEOs, I've learned that their top priorities align closely with strategies to drive effective growth: customer, product-oriented strategy and community-oriented strategy. This includes a greater focus on retention and expansion, cross-selling, product adoption, automation, and digital strategies. It's logic. In terms of efficiency, the cheapest revenue to acquire is your existing customers. If you have existing customers, the cheapest way to grow is to retain, market to, and sell to them.
But today's economic environment requires more than just strategy. It forces you to do more with less. This forces you to use limited resources more efficiently to simultaneously expand and scale network storage. How can you do more with less as your customers take a closer look at their software spend and examine every ounce of results, experience, and value you offer? How can you optimize for growth when rankings are more about metrics like net retention (NRR) and customer acquisition cost (CAC) than net logo and order growth? Given the likelihood that you will receive fewer logos in the coming months, what can you do to encourage existing customers to not only renew their contracts, but also increase their spending?
Related: 3 Tips to Boost Software-as-a-Service Growth
Construction of CSM "Bionic".
One of the most cost-effective solutions for growing SaaS businesses is digital customer success software. By using the right digital tools and workflows at the right time, with the right messaging, you can effectively scale your retention and expansion efforts by transforming current Customer Success Managers (CSMs) into “bionic” CSMs. Yes, we're talking about the six million dollar man (or woman) here.
Using product adoption data, digital communication channels, in-app engagement and surveys, automated email series, workflow-based playbooks, and a vibrant user community, you can make every CSM better, stronger, faster and more. exempt from fees. spend time on high-value activities rather than repetitive low-value tasks.
Deploying digital tools does not mean replacing CSMs with a fully automated Customer Success (CS) program. It's about equipping them with tools that act as force multipliers, honing their skills, and giving them more time to focus on strategic initiatives instead of sending the same emails over and over again.
When it comes to CS expansion, you can't just recruit more troops and hope for the best. You need a digital program that gives customers more personalized experiences without requiring more staff. Whether you're investing in customer health assessment tools, in-app engagement, or community platforms, digital operations can help you do just that.
(Another organization to seriously consider hiring is a CS Operations Manager – a critical role that drives efficiency. The investment costs just one Operations Manager to develop and manage your digital strategy that promotes all the qualities numbers.)
Related to: A Technical Perspective on How to Build and Grow a SaaS Business
Make growth sustainable
Besides digital expansion, some other CS activities can help make your growth more efficient and sustainable;
A risk management program that helps prevent flooding and other unpleasant surprises. The core of such a program should be a client health assessment model that serves as a “canary in the coal mine”. A customer health assessment framework should provide early warning data on product positioning, user adoption, and engagement (among other things) to help you determine what's working, what's not. steps and what you can do to improve retention.
Organization-wide strategies for acquiring, managing and ensuring the success of repeat customers . It requires honest conversations with your customers, a deep understanding of your strategies, and reliable metrics to measure the impact of those strategies. It also means building a strong community around your product. Community members allow customers to find answers among others with proven success. Peer-to-peer networks provide lasting value to new and existing customers.
Focus more on offense than defense. In times of uncertainty, your gut may tell you to make safe bets (like keep/upgrade), but building sustainable growth requires unlocking the potential to expand your install base. To take full advantage of this potential, seek to embrace underserved parts of your technology and use built-in account management to help your after-sales teams identify and acquire additional qualified customers.
Grow with your product. Product development, marketing, sales, customer success, and customer service must work closely together to make the customer the #1 priority. To facilitate collaboration, consider creating a Product-CS Interlock to identify key initiatives you want sales and service teams to collaborate on in the short and long term.
The first approach to man. This is especially important for SaaS companies facing declining sales, downsizing, cost constraints, and other challenges. By coming across as empathetic and caring, you'll put money into the "relationship bank" that will foster stronger, longer-lasting relationships.
With many SaaS companies implementing hiring freezes, cost cuts, and layoffs, it's hard ( really hard) to see the bright side. But take a good look, learn to trust your data, and before you know it, you'll discover and appreciate that it's still very much possible to grow a healthy and sustainable business by investing in effective strategies, even spells like the digital customer success. the difference between life and death.