How to Grow a SaaS Business: 7 Strategies To Help You Bring In Paying Customers

Thom Crowe
Apr 10, 2024
Are you struggling to grow your SaaS business? This guide will cover everything you need to know about how to grow a SaaS business and what mistakes to avoid.

Over the years, we’ve seen early-stage SaaS founders make mistakes that really hurt their ability to grow and generate their first couple of users. These mistakes stem from several issues. Specifically:

  • Founders try to build a full-scale product that isn’t niche enough: Instead of building a micro SaaS that targets a very specific user, founders try to compete with the big players in their space.
  • Founders burn through capital by giving away their product for free for too long: While giving your product away for free is a good way to get customer feedback, you want to use platforms like Product Hunt to get paying customers.
  • Founders don’t prioritize continuous development and instead chase short-term growth: Paid ads, cold emails, and SEO are good ways to generate customers, but organic, long-term growth comes from building a product so good that users recommend it to their friends, colleagues, and everyone else in their circle.
  • Founders are too afraid to hire staff and give away control of certain parts of their company: This ties the founder to the company’s day-to-day operations, limiting growth.
  • Founders try to raise money too soon: Although outside investment is necessary in many cases, founders will spend more time building their slide deck than they do building their SaaS product.

In an effort to shed some light on these issues, we’ll discuss seven strategies that we see the most successful SaaS founders implement and how it helps them bring in their first few users.

1. Get specific with your value proposition

The most fundamental mistake we’re seeing SaaS founders make that hurts their ability to scale is trying to build a product that solves all the problems related to a certain industry.

For example, if they are developing a CRM, instead of targeting a small niche of professionals using CRMs (accountants, lawyers, investors etc.) and building a product around their needs, they try to build an all-purpose CRM that competes with the likes of Salesforce.

This makes it difficult to grow because they are essentially competing with the big players in their space who have access to millions of dollars in investment.

So, we recommend using a micro SaaS approach. Instead of creating a full-scale SaaS product, focus on a very specific niche that these big players aren't targeting.

When you’re doing market research, you might learn that Salesforce doesn’t allow accountants to host transactional data, for example. Accountants have to connect with third-party accounting software, which is expensive. With this information, you could create a micro SaaS CRM that allows accountants to securely host transactional data and manage client information under one digital roof.

This way, your CRM isn't competing directly with Salesforce, but rather, you're focusing on fixing a single weakness of theirs and selling to a subset of Salesforce customers.

Once you've gotten specific with your value proposition and target audience, growing your SaaS is much easier because you aren't competing with businesses with massive budget.

2. Educate the market on your value proposition

With your value proposition and differentiators in place, it’s time to come up with something known as a differentiated message. This is the marketing copy you’ll use to communicate your product’s value to your target audience and convince them why they need to buy from you.

This differentiated messaging could be in the form of e-books, how-to blog posts, YouTube videos, paid ads, social media posts, or any other resource you use to communicate with your audience.

Using the example above, you can write articles and social media posts discussing how your CRM securely houses transactional data without users having to connect to an outside accounting application.

As you probably have noticed, tips one and two go hand in hand. If you are very specific with your value proposition and you’re solving a problem that your target audience is facing, then educating them on why they need to buy your product should be straightforward.

3. Find platforms that are already selling to your target customer

Instead of trying to build an audience from scratch, we found that the fastest-scaling SaaS businesses typically sell their products on existing marketplaces that their target customers are using.

This allows SaaS businesses to get in front of their target customers quickly and use their differentiated messaging to educate them on their value proposition.

Sticking with the CRM example, if you’re selling a CRM to accountants, you can host your product on the Salesforce marketplace. Thousands of professionals, including accountants, visit this marketplace to find Salesforce alternatives that’s more specific to their vertical.

You can also promote your product on r/Salesforce, Salesforce Facebook groups, and Quora, for example, by replying to posts of people complaining about the limitations of Salesforce.

Again, we’re just using CRM software as an example, but this strategy works for most SaaS products, whether it’s AI applications, developer tooling, or marketing software.

4. Launch your product on Product Hunt

Another common mistake we see SaaS founders make that stunts their growth is giving their product away for free for too long. 

Founders will be in year two or three and still give their software away for free to beta testers. Giving your SaaS away in exchange for feedback can help with initial development, but you want to ask customers to buy as soon as possible, preferably within the first six months of launch.

Platforms like ProductHunt allow you to offer your new product to users at massive discounts. It isn’t uncommon for new SaaS companies to offer beta testers 80% or 90% off lifetime deals in an effort to get these individuals to financially commit to their product.

This helps avoid the pitfall that many SaaS founders find themselves in: they interview beta testers, these beta testers say they would definitely buy the founder’s product (in order to be nice), but when it’s actually time to buy, they have hesitations.

By asking customers to buy early on, you’ll quickly find out if they are just trying to be nice or if they are really interested in buying your SaaS product.

5. Continuously interview your customers

Once you have a solid base of paying customers, continuously interview them to find out what problems they are having with your product and how you can fix them. This feedback drives product development in the right direction and ultimately reduces customer churn because you're constantly weeding out potential issues.

As you develop your product according to your target audiences' preferences, you should start gaining organic popularity since users will begin recommending it to their colleagues, friends, and followers. You should start seeing your product being mentioned in forums, social media comment sections, and review guides.

This organic growth is the primary benefit of conducting customer interviews and continuously improving your product. 

Sure, paid ads, SEO, cold email, and video marketing are great and proven methods of generating leads. However, it's one thing for customers to discover your product through an ad. It's another when customers are recommended your product by all of their colleagues, and your product is the only one they are considering buying.

6. Don't wait too long to hire

Another common mistake we see SaaS founders make is waiting too long to hire staff and trying to do everything themselves. 

They are scared of giving up control over their business and think that nobody else can do a particular job as well as they can. This might be true; however, if you as a founder are doing everything inside your business, it can stunt business growth because you’re strapped to day-to-day operations.

This leads founders to get burned out because they are working too much. Put simply, it's more enjoyable to grow your business with a team. Nobody wants to handle support tickets and customer complaints while running ads, tracking marketing analytics, and programming new product features.

7. Don't fundraise too soon

There's a saying that goes: "Build your business, not your slide deck."

Too often, early-stage founders spend all their time preparing presentations for angel investors and venture capital firms, and they don't actually achieve product-market fit; all they have is an idea and an MVP sketch, and they're trying to raise funds. In this scenario, even if they do raise funds, they’ll probably give away most of their company and burn through investment funds within months.

In reality, the most convincing slide desk you can show investors is your SaaS product's MRR and user base growth. Instead of fundraising, bootstrap your business as long as you can. Use your own money to conduct market research, learn about customer pain points, build a product that solves these pain points and put your product out there for people to buy. This is what's going to grow your SaaS business in the beginning, not venture capital.

If you build your base steadily enough, you may be able to forego investors and retain ownership and control of your company.

Next steps

One of the best ways to start getting customers and grow your business it to start getting customers. With Dome’s SaaS templates, you have all of the integrations and tooling you need to launch your SaaS business in just a few minutes instead of spending months on the MVP. With promo code SAAS100 you get 1 year of Dome’s Growth Plan for free with the purchase of your template, giving an easy way to launch and host your SaaS company.

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