3 Growth Levers Every SaaS Founder Should Know

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Christian OwensContributor

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Christian Owens is the CEO and co-founder of Paddle, a payment infrastructure provider for SaaS businesses.

Scaling a SaaS company is harder today than it was in the past few years. Whatever stage your company is in, a nearly 70% decline in the value of public SaaS shares, limited access to funding and a shrinking company tech stack all point to a more challenging road ahead for a sector that is almost in default. Used for rapid development.

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By nature, aspiring SaaS founders and operators do not want to give up on their growth ambitions even in the midst of an economic downturn. There is no reason why they should do this. The fact is that VC funding is not a prerequisite for retaining clients and growing rapidly.

However, there is no doubt that traditional growth levers such as digital advertising and large sales teams are likely to prove too costly or unreliable in the current environment. There’s still growth opportunities out there, but founders and operators will need a new strategy if they want to keep growing through the downturn. It is important to focus on scaling up sustainably by tapping into the more overlooked and underrepresented sources of revenue.

If your CX is not geared to international customers, you are leaving significant gaps in your offering and will see potential sales decline through the cracks.

As the founder of a payment infrastructure provider for SaaS businesses, I have helped thousands of software companies over the past 10 years, and we look at the financial metrics of 30,000 membership companies. Based on this experience and our analysis of data, I believe there are three growth levers often overlooked by SaaS leaders that every company should be exploring.

Attention to Detail for Recession-Proof Revenue

Encouraging businesses to acquire new customers may seem counterintuitive, but the truth is that keeping existing customers happy — and generating new sales from them — is far easier and cheaper than acquiring new customers. This is especially true now, as many buyers will be hesitant to spend money trying out new equipment.

So SaaS companies should focus on expansion revenue – the additional revenue generated after a customer’s initial purchase. This basically means that your customers will have to spend more than they did a month ago. Our data shows that the most successful subscription companies worldwide have 20% of their new revenue coming from existing customers, but many businesses have close to zero.

This is a result of what we call the “sales brain”—a flawed mindset that sees sales as the end goal rather than the beginning of a long-term process.

Here are some ideas that SaaS leaders can use to supercharge their expansion revenue:

Add an upsell tier to your pricing, pushing valuable features into more premium tiers. Our research shows that the top 1% growing apps have 16 pricing tiers, so don’t be afraid to charge for your platform’s most popular tools.

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