Your 9-Step Guide To A Million Dollar SaaS Business
When I was starting my first SaaS business, I found it incredibly difficult to make my first dollar, let alone one million.
With so many things to focus on, it can be difficult to focus your priorities and scale your SaaS startup.
Which is why in this article, I’m going to help you get your priorities straight and give you 9 focusses to help you scale your SaaS company to a million dollar business.
But first, if you’re looking for inspiration on how to scale your business, I’d recommend checking out Rob Walling’s video showing how he built and sold a multi-million dollar SaaS app.
1. Increase Your Prices
When it comes to SaaS pricing, small businesses often set prices that are way too low. This can be caused by a lack of experience with pricing strategy or a fear of driving away potential customers.
However, from my experience, pricing your product too low can actually be harmful to your business as it limits your revenue potential and can also lead to the perception that your product is of lower quality.
To overcome this issue, I’d recommend taking a data-driven approach to your product’s pricing. You can do this by conducting pricing experiments, where you test different price points and monitor customer behaviour to determine the optimal price for your product.
I’ve seen some SaaS entrepreneurs take a really interesting approach to the problem of finding the right price for their startup. In their opening few months, they run a strategy where each time someone buys their product, they increase their prices by $5. When sales start to fall off, they know that their product is now priced too high, so adjust the price accordingly and settle on their new structure.
While I wouldn’t recommend this strategy for a lot of SaaS businesses, it’s interesting how creative you can be with finding your pricing strategy for your business.
2. Encourage Annual Plans At The Right Time
I love annual plans as they generate a more reliable income stream, provide better revenue predictability and lower churn rates.
However, despite the benefits, many customers may not be willing to pay for an annual subscription upfront for a number of reasons, including:
- Financial Constraints: Customers may have limited financial resources at the time of first subscribing
- Uncertainty: Your customers might be uncertain about their long-term needs and need to try the product before commiting to paying for a full year.
- Lack of Trust: New customers may not fully trust your company yet and need a shorter commitment until they know they can rely on your business.
After a few months of using your product, customers may be willing to move to a longer-term contact once they’ve fully understood the benefits of your service to them. The problem is, after months have past since they last looked at your pricing page, they’re likely to have forgotten about your annual plan.
What astonishes me is how many startups don’t actively promote their annual plans after a few months of being subscribed.
Not only would a simple notification within the product or a quick email help to secure a more reliable income from each of your customers, but it would also give you an opportunity to upsell a more expensive plan to them!
It’s just free money waiting for you to claim it.
While all of the tips on this list will help you to scale your startup to 1 million dollars of revenue, I guarantee that this tip will get you most of the way there on its own.
3. Keep a Marketing Changelog
Keeping track of what marketing efforts you’ve employed and when you did them can be vital to analysing the successes and failures of different marketing techniques.
Not only does this promote experimentation within your business, but it also allows your business to double down on the most effective marketing strategies while getting rid of the ones that aren’t working for you.
I’ve found that a simple spreadsheet that details your marketing activities, the date range that you worked on it, a brief description of the change that was made and any relevant result does the trick.
The best thing is that this simple strategy really does work.
I discovered that mentionning my SaaS poster tool, Code Poster, on Reddit threads celebrating the success of other product launches gave a massive boost in conversions compared to the other marketing strategies that I’d tried.
Without my spreadsheet, I wouldn’t have had an quick and easy way to see just how effective this marketing strategy was, meaning that I might not have prioritsed it as much, which would have lost me loads of sales.
4. Setup Keyword Alerts
Monitoring keywords that are relevant to your business is another way to help scale your startup to a multi-million dollar business.
By tracking these keywords, you can identify new customers, monitor your competitors, and stay up to date in your industry. This information can be used to inform your marketing strategy, improve customer engagement, and respond to feedback and criticism in a timely manner.
There’s 2 free tools that I’d recommend you sign up for now to start getting notified about your brand:
- Google Alerts: A free service that monitors the web for your brand specific keywords.
- F5bot: A tool that monitors Reddit, Hacker News and Lobsters for your keywords. Ideal for getting you into social interactions around the areas of your brand, promoting your business’ reputation and getting you some more sales
When selecting your keywords, make sure you spend time thinking of very specific phrases that you want to be notified about.
When I first started using F5bot, I selected very broad keywords so I could respond to anything within my business’ niche. This was a big mistake.
It meant that I received a notification every few minutes before hitting the daily cap. Not only did the constant notifications distracted my from the other jobs I needed to be getting on with, but I also ended up checking the notifications less often, meaning I was missing the posts that I was actually wanting to reply to.
So please, learn this lesson from me. If you market your startup by setting up keyword alerts, make sure you choose very niche phrases.
5. Improve Your Customer Support
As an entrepreneur, it’s important to manage support requests and ensure that customers receive timely and satisfactory responses.
However, spending all of your time addressing these requests can be counterproductive and prevent you from focusing on other parts of your business.
One way I’ve found to address this challenge is to create a dedicated FAQ page on your site. This provides customers with quick and easy access to answers to common questions, reducing the need for them to contact you
To take it a step further, you can use software to automatically redirect customers to the FAQ page if they ask a question that has already been answered there. This approach can save you time and resources while also improving the customer experience, both of which will allow you to scale your business quicker.
6. Ask For Testimonials
Asking your existing customers to provide testimonials for your service can be an incredibly powerful way to build trust with new customers and increase your overall credibility and profits.
By showcasing the positive experiences that your existing customers have had with your product, you can demonstrate your value in a way that resonates with new users and encourages them to pay for a plan.
The most effective way to get testimonials is to ask your current users for them at the end of a support ticket where you have provided an exceptional service.
This has been a natural way for me to engage with my customers and encourage them to share their experiences with others in the past, so it should make for an easy way to increase the trustworthiness of your brand and increase sales.
7. Use HARO
Help a Reporter Out (HARO) is a website that connects journalists and reporters with sources for their stories.
By signing up as a source, you receive daily emails with queries from reporters looking for expert comments on a wide range of topics.
I’ve found that participating in HARO can be an effective way to gain exposure for your business and potentially earn valuable backlinks to your website, which will boost your landing page in Google’s search rankings. If you’d like to learn more about the value of backlinks, check out our guide to link building.
I’ve used HARO a lot, both for this blog and for some of my other businesses. Once you’ve got the nack of replying to journalists in a succinct but quote-worthy way, you’ll find it an easy way to get more trust and traffic to your business.
HARO’s also recently launched a new service specifically for B2B companies called Help a B2B Writer.
If you’ve got data or quotes to share, with the world, Help a B2B writer can make it even easier to promote your brand to the world.
8. Ask Why Users Cancel
Sadly, no matter how great your business is, you’ll always get some customers churning from your business.
Rather than just letting them leave, why not follow up with an automated email asking them why they left. If you don’t get a responce, then no harm done. But if you do, then:
- You’ll get valuable feedback into how to improve, which might stop other customsers leaving in the future
- You might be able to entice the customer back with a special offer or by fixing the issue they’re having with your product
Either way, getting feedback from users can be a remarkably easy way to keep customers paying for your service, helping to keep your earnings up and make you reach the 1 million dollar goal for your startup even quicker.
9. Attend Networking Events
Attending networking events as a business founder is important for a number of reasons.
For starters, it can be an effective way to build relationships with other professionals and potential partners in your industry. By attending networking events, you have the opportunity to connect with like-minded individuals who share your interests and can provide valuable insights and feedback on your business.
Networking events can also be a great way to expand your professional network and generate new leads for your business.
By meeting new people and building relationships with them, you can tap into new sources of information and potential clients. Additionally, attending networking events can help you establish your brand and reputation in your industry. By interacting with others and showcasing your expertise and knowledge, you can build credibility and establish yourself as a thought leader in your field.
Key Takeways
To summarise, in order to grow your company to achieve 1 million dollars in revenue, you should focus on:
- Pricing Strategy: Avoid underpricing your SaaS product, as it can limit revenue potential and create the perception of lower quality. Conduct data-driven pricing experiments to find the optimal price for your product.
- Encourage Annual Plans: While annual plans provide more predictable revenue, some customers may initially hesitate due to financial constraints, uncertainty, or lack of trust. Promote annual plans to existing customers after they’ve had time to experience the value of your service.
- Marketing Changelog: Maintain a record of your marketing efforts to analyze their effectiveness. This helps you focus on the most successful strategies and refine your marketing approach.
- Keyword Alerts: Monitor relevant keywords to identify new customers, track competitors, and stay updated in your industry. Tools like Google Alerts and F5bot can help you stay informed.
- Customer Support Optimization: Create a dedicated FAQ page to reduce support requests. Use automation to redirect customers to the FAQ when their questions have already been answered.
- Collect Testimonials: Request testimonials from satisfied customers, especially after providing exceptional support. Testimonials build trust with new customers and enhance your brand’s credibility.
- HARO Participation: Join Help a Reporter Out (HARO) to connect with journalists and gain exposure for your business. Responding to journalist queries can also earn valuable backlinks and improve your website’s SEO.
- Feedback on Cancellations: Send automated emails to customers who cancel to gather feedback and understand their reasons. Use this feedback to improve your product or service and potentially win back customers.
- Networking Events: Attend networking events to build relationships with industry professionals, generate leads, and establish your brand. Networking can also help you tap into new sources of information and establish credibility in your field
Overview
Now that you’re ready to grow your startup to 1 million dollars of revenue, check out our other guides to setting the right pricing strategy for your business and our tips on marketing your product the right way.
