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HomeEntrepreneurHow to Create Healthy, Sustainable Growth for Your Early-Stage SaaS Businesses

How to Create Healthy, Sustainable Growth for Your Early-Stage SaaS Businesses


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Good news seems to be a scarce commodity for most SaaS companies these days. Publicly traded stalwarts have seen their share prices plummet significantly from where they were a year ago. The tech-heavy Nasdaq is down more than 30% already this year. High-growth startups are seeing their funding and valuations dip as profitability replaces growth as a key value driver. Early-stage startups are being forced to drastically cut costs, rethink funding strategies and take-on high-risk debt as survival becomes goal #1. And I haven’t even mentioned the layoffs yet.

As a result, SaaS companies that, until recently, were following a growth-at-any-cost playbook are now scrambling to become profitable before their cash runs out or draconian covenants are triggered.

But what if I told you there’s a silver lining? Yes, really — an opportunity for everyone in tech to take a deep look into the businesses we’re running and, dare I say, come away with something that’s going to be better and more durable for everyone in the long run. Well, that opportunity is here. It’s real. And it’s spectacular.

Related: 5 Growth Hacks for Your SaaS Businesses

Building your durable growth engine

While the most mature SaaS companies likely have enough market value or backing to weather the current downturn, many growth-stage firms have only one option in a climate where capital infusions are no longer cheap and plentiful. They need to build efficient, durable growth engines — and they need to do it now.

Through my conversations with customers, as well as a recent Gainsight survey of leading SaaS investors and CEOs, I’ve learned that their top priorities are all tightly aligned on strategies to drive efficient growth — growth driven by customer, product and community-led strategies. This includes an increased focus on retention and expansion, cross-sell, product adoption, and digital-led strategies. This makes sense. After all, when it comes to efficiency, the least expensive revenue to acquire is from your existing customers. And if you have existing customers, the least expensive way to grow is by retaining, selling and upselling to them.

But today’s economic climate requires more than just strategy. It requires you to do more with less. It requires you to leverage your limited resources more efficiently in order to simultaneously scale and boost net retention. How can you do more with less at the very moment when your customers are taking a harder look at their software spend and scrutinizing every ounce of outcomes, experiences and value that you deliver? How do you optimize growth at a time when valuations are increasingly tied to metrics such as Net Retention (NRR) and Customer Acquisition Cost (CAC) instead of pure logo and bookings growth? Given the likelihood that you’ll acquire fewer logos in the months ahead, what can you do to encourage existing customers to not only renew their contracts but actually increase their spend?

Related: 3 Tips for Maximizing Software-as-a-Service Growth

Building the “bionic” CSM

One of the most cost-effective solutions for growing SaaS firms is a Digital program. By deploying 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 “Six Million Dollar Man” (or Woman) stuff here.

By leveraging product adoption data, digital communication channels, in-app engagements and surveys, automated email sequences, workflow-driven playbooks and a vibrant user community, you can make every CSM better, stronger, and faster — freeing them to devote more time to high-value activities rather than repetitive low-value tasks.

Incorporating digital tools isn’t about replacing CSMs with a fully automated Customer Success (CS) program. It’s about equipping them with tools that serve as force multipliers, augmenting their abilities and giving them more time to focus on strategic initiatives instead of sending the same emails again and again.

When it comes to scaling CS, you can’t simply hire more bodies and hope for the best. You need a digitally-enabled program that provides customers with more personalized experiences without requiring more personnel. Digital-led motions will help you do that, whether you’re investing in customer health scoring tools, in-app engagements or community platforms.

(One additional body to seriously consider hiring is a CS Ops Manager — a critical role that drives efficiency. Bringing in just one Ops Manager to develop and direct your digital strategy, contributing to all that digital goodness, is worth the investment).

Related: A Tech Viewpoint On How To Create And Grow a SaaS Business

Making growth sustainable

In addition to scaling through digital, several other CS motions can help ensure that your growth is more efficient and sustainable:

A risk management program that helps prevent churn and other distressing surprises. The heart of such a program should be a customer health-scoring model that serves as a “canary in a coal mine.” The customer health-scoring framework should provide you with early-warning data around product deployment, user adoption and engagement (among other things) to help you identify what’s working, what’s not and what you can do to increase the retention odds.

Organization-wide strategies for acquiring customers, managing them and driving them to verifiable success again and again. This requires honest discussions with your customers, a thorough grasp of your strategies and reliable metrics to gauge 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 networking adds continuous value for new and existing customers.

A focus on offense over defense. In uncertain times, your instincts may tell you to place only the safe bets (e.g., retention/renewal), but creating durable growth requires you to unlock the expansion potential of your install base. To fully exploit this potential, look to increase adoption of the underemployed parts of your technology, and utilize integrated account management to help your post- teams identify and acquire more qualified expansion leads.

Grow through your product. Product development, marketing, sales, customer success and must closely collaborate to make the customer priority #1. To facilitate the collaborations, consider creating a “Product-CS Interlock” to identify key initiatives on which you want the sales and post-sales teams to partner in the short term and long term.

A human-first approach. This is especially important for SaaS companies confronting declining sales, downsizing, cost constraints and other challenges. By showing up as humans who display empathy and care, you’ll put pennies in the “relationship bank,” which will add up to stronger, more enduring relationships down the road.

It can be hard (really hard) to look on the bright side at a time when many SaaS businesses are implementing hiring freezes, cutting costs and laying people off. But look hard enough, learn to trust your data, and before you know it, you’ll find and appreciate that it is still very possible to grow a healthy, durable-growth business by investing in efficient strategies such as Digital Customer Success — strategies that might even spell the difference between life and death.



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