Software is changing the world for businesses of all types and sizes. As software has become easier for companies to develop and for businesses to purchase and deploy, there has been a proliferation of purpose-built vertical software-as-a-service platforms (vSaaS) grabbing market share within every niche. And because the software is hyper-focused on the unique needs of their customers within that niche, vSaaS platforms are able to quickly gain market share.
This hypergrowth has forced vSaaS companies to confront a challenge that used to come up much later in a company’s life: once you start to gain traction capturing market share in your niche vertical, how do you sustain high ARR growth rates?
We spoke to leaders from top vertical SaaS platforms about how they address this challenge and compiled the 3 best ways to grow existing customer ARR:
1) Add a dedicated ‘expansion’ sales/account team
Software platforms that invest significantly in an expansion team (aka renewals growth, account growth, etc.) tend to have more frequent conversations with their customers. In doing so, they not only educate customers on how to get more value out of their tool, they also learn from them.
Customers are often the best source for ideas on features they want to see you build, adjacent products you could offer to increase revenue, or even blockers customers are having that are preventing them from getting maximum value out of your product.
Start with your best customers. Find ways to strengthen your relationship with them so you can amplify their voices and increase the value they get. Once you figure out what works or what types of accounts are ripe for growth, scale from there.
2) Use in-product cues to increase adoption and reduce churn
More often than not, the best way to advertise your own product is within it. After all, your customers have already shown a high intent to take action just by logging in. In-product cues (aka in-product education, pop-ups, learning modules, etc.) are a great way to direct attention to a specific feature, action, or area of your product that you want to promote. For example, if your product has a user-based pricing model, you might want to point users toward a feature that promotes collaboration within your product. Remember that you can always start by testing in-product cues with a subset of your user base to measure the impact on adoption before rolling it out to all users.
3) Expand product lines with embedded products from partners
To remain competitive, vSaaS platforms are constantly pushing against a limit of how much of their customers’ business needs their small but mighty engineering teams can deliver on. A critical point for a ton of vSaaS providers we talked to came when their customers started asking them to handle additional capabilities, which are often more complex.
One CEO told us that she got a surprisingly big jump in not just average customer value but also customer retention when she built the ability for businesses to text their customers directly into her platform, by embedding Twilio in her product. She would never have diverted her engineers for the years it would take to build the infrastructure and tooling required, but building her own front end on top of Twilio’s API was an 8 week project.
Similar to adding messaging capabilities, adding back office services like payments, payroll, or banking are a huge lift to develop on your own, but getting easier every day with proliferation of the embeddable back-office APIs.
Check is one example of this, and we’ve helped the vSaaS platforms who partner with us launch payroll capabilities in a matter of months, instead of years. This creates an entirely new upsell opportunity by letting you make a historically complex and difficult task, paying employees, a seamless experience.
Regardless of where your SaaS company might be in the life cycle of growing ARR, one thing is for certain, your customers love you and they are eager for you to solve more of their pain. The appetite among business owners is there, and there are companies, like Check, who are ready to help you deliver more value, increasing customer ARR.
To learn more about how to expand your product line with a payroll offering contact us.