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Good news seems to be a rare commodity for most SaaS companies these days. Publicly traded stalwarts have seen their share prices drop significantly from where they were a year ago. The tech-heavy Nasdaq is already down more than 30% this year. High-growth startups are seeing their funding and valuations fall as profitability replaces growth as a key driver of value. Early-stage startups are being forced to slash costs, rethink financing strategies, and take on high-risk debt as survival becomes the #1 goal. And I haven’t even mentioned layoffs yet.
As a result, SaaS companies that, until recently, followed a grow-at-any-cost playbook are now striving to become profitable before your cash runs out or draconian covenants are activated.
But what if I told you there is a silver lining? Yeah, seriously: an opportunity for everyone in tech to take a deep look at the businesses we’re running and, dare I say, come up with something that’s going to be better and more durable for everyone in the long run. Well, that opportunity is here. It is real. And it’s spectacular.
Related: 5 Growth Hacks For Your SaaS Businesses
Building your lasting growth engine
While more mature SaaS companies are likely to have enough market value or private equity backing to weather the current downturn, many growth-stage companies only have one option in a climate where capital injections are no longer available. cheap or plentiful. They need to build efficient, long-lasting engines of growth, and they need to do it now.
Through my conversations with clients, as well as a recent Gainsight survey of top SaaS investors and CEOs, I’ve learned that their top priorities are closely aligned with strategies to drive lean growth: growth driven by customer-led strategies. customers, products and communities. . This includes increased focus on retention and expansion, cross-selling, product adoption, automation, and digital strategies. This makes sense. After all, when it comes to efficiency, the least expensive revenue to acquire comes from your existing customers. And if you have existing customers, the least expensive way to grow is to retain them, sell to them, and sell to them.
But today’s economic climate requires more than just strategy. It requires you to do more with less. Requires you to use your limited resources more efficiently to scale simultaneously Y increase net retention. How can you do more with less as your customers take a closer look at their software spend and scrutinize every ounce of results, experiences and value you deliver? How do you optimize growth at a time when valuations are increasingly tied to metrics like net retention (NRR) and customer acquisition cost (CAC) rather than pure logo and booking growth? Given the likelihood that you will purchase fewer logos in the coming months, what can you do to encourage existing customers to not only renew their contracts, but also to increase your spending?
Related: 3 Tips to Maximize Software-as-a-Service Growth
Building the “bionic” CSM
One of the most cost-effective solutions for growing SaaS companies is a Digital Customer Success program. By implementing the right digital tools and workflows at the right time with the right messaging, you can efficiently scale your retention and expansion efforts, transforming existing Customer Success Managers (CSMs) into “Bionic” CSMs. Yes, we’re talking about “Six Things About a Million Dollar Man” (or Woman) here.
By leveraging product adoption data, digital communication channels, in-app interactions and surveys, automated email sequences, workflow-based playbooks, and a dynamic user community, you can make each CSM better, stronger, and faster, freeing them up to spend more time on high-value activities instead of repetitive low-value tasks.
Embedding digital tools is not about replacing CSMs with a fully automated customer success (CS) program. It’s about equipping them with tools that serve as force multipliers, increasing 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 scaling CS, you can’t just hire more bodies and hope for the best. You need a digitally enabled program that gives customers more personalized experiences without requiring more staff. Digitally-led moves will help you do that, whether you’re investing in customer health scoring tools, in-app engagements, or community platforms.
(An additional body you should seriously consider hiring is a CS Operations Manager, a critical role that drives efficiencies. It’s worth the investment to bring just one Operations Manager to develop and lead your digital strategy, contributing to all that goodness. digital).
Related: A Tech Point of View on Building and Growing a SaaS Business
Making growth sustainable
In addition to scaling through digital, several other CS moves can help ensure your growth is more efficient and sustainable:
A risk management program. which helps prevent turnover and other distressing surprises. The heart of such a program should be a client health scoring model that serves as a “canary in a coal mine.” Your customer health scoring framework should provide you with early warning data on product deployment, adoption, and user engagement (among other things) to help you identify what’s working, what’s not, and what you can do to increase the odds. retention.
Organization-wide strategies for acquiring customers, managing them, and leading them to verifiable success and again. This requires honest discussions with your clients, 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 empower customers to find answers from others with proven success. Peer-to-peer networks add ongoing value for new and existing customers.
A focus on offense over defense. In uncertain times, your instincts may tell you to only make safe bets (eg, retention/renewal), but creating lasting growth requires you to unlock the potential for expansion of your installed base. To make the most of this potential, look to increase adoption of the underemployed parts of your technology and use built-in account management to help your post-sales teams identify and acquire more qualified expansion leads.
Grow through your product. Product development, marketing, sales, customer success, and customer service must collaborate closely to make the customer the #1 priority. To facilitate collaborations, consider creating a “Product-CS Interlock” to identify Key initiatives that you want the sales and post-sales teams to partner on in the short and long term.
A human approach first. This is especially important for SaaS companies facing declining sales, downsizing, cost constraints, and other challenges. By coming across as humans who show empathy and care, you’ll put pennies in the “relationship bank,” which will add up to stronger, longer-lasting relationships in the future.
It can be hard (Really difficult) to look on the bright side at a time when many SaaS companies are implementing hiring freezes, cutting costs and laying off staff. But dig hard enough, learn to trust your data, and before you know it, you’ll discover and appreciate that it’s still very possible to grow a healthy, long-lasting business by investing in efficient strategies like Digital Customer Success—strategies that might even mean the difference between life and death.