in today’s newsletter article, I will share with you the framework I use to create, analyze and optimize the growth strategy of SaaS startups.
I hope it helps you to create a powerful SaaS Growth Strategy for your SaaS business.
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Use the free Worksheet and easily create, analyze and optimize your own powerful SaaS growth strategy. If you have questions on any of the topics, feel free to reply to this email - I will try to reply to your email asap.
Joel York defines the growth of a SaaS company the following:
<aside> 📈 SaaS Growth = Acquisition Rate x Average Customer Lifetime Value
That means you can influence/optimize your SaaS growth by optimizing at least one of the following parts:
Net Growth New Customers:
… Adding more new customers (new customer growth)
… Reduce churn of customers (churn rate)
Average Revenue per Account (ARPA)
… Upselling & Cross-selling
Customer Lifetime (Churn Rate)
… or simply said by a) adding new customers, b) reducing the loose of existing customers (churn), and c) increasing the revenue per customer.
When you’re launching your business, it’s recommended to start with the market (knowing the problems), then define your ideal customer profile (who has the problem) and decide on how you want to position yourself in the market (Positioning). Based on the segment of the market (and your positioning) you decide how you’re hunting the ICP (Sales strategy) and how you solve the problem (Product Strategy) and what’s in for them (Value Proposition). Based on that you decide what you actually say to your audience (Brand Message, Sales Messaging). Last but not least you test and master different ways to get in touch with your potential customers (Growth Channels).
TK Kader describes in his 5-Point SaaS Growth Strategy Guide the success of SaaS companies is based on 3 core elements: