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Twenty years ago, 99% of business owners would stare blankly into space if you mentioned the acronym SaaS.
These days it’s almost impossible to run a business without using at least one of the many SaaS products available on the market.
In 2019, companies with 0-50 employees used, on average, 40 SaaS products. That’s almost as many as many SaaS subscriptions as employees.
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Average number of SaaS products per company
And this isn’t a bad thing. If you’re stuck using only a few, your company probably isn’t running at full efficiency.
In this post, we do a deep dive into what SaaS is and how it can help your business. We will also deep dive into 40+ SaaS products we use to grow our own company.
Ready to start? Let’s rock!
SaaS Definition: What Is SaaS?
The acronym SaaS stands for software as a service. It is a software distribution method that typically involves paying on a subscription model for a product, tool, or service.
(Suggested reading: make sure to read our in-depth guide on SaaS marketing).
In most cases, SaaS products are now hosted in the cloud and are accessible from anywhere via your web browser or mobile device.
In the past, software companies relied on a licensing model to sell their digital products and make money.
The difference between a licensed software product and SaaS is that you install and run traditional software on your own computer or server. With SaaS, the company typically hosts and manages the software solution for you.
So instead of just buying the code, you pay for the service of hosting, updating, and maintaining the software, servers, and databases as well.
SaaS Diagram (Image source: atlantic.net)
SaaS vs PaaS vs IaaS
You might be confused about what all the different acronyms in the SaaS industry stand for.
In this section, we will quickly cover the differences between SaaS, PaaS, and IaaS.
improve their productivity.
What Are Some Examples of SaaS?
SaaS products are typically software solutions that help businesses or individuals solve specific problems. Salesforce helps companies keep track of customers and prospects and understand them better.
Dropbox helps businesses and individuals keep files safely in the cloud and share them.
More Examples: BigCommerce, G Suite, HubSpot, Microsoft Office 360, Shopify, Slack, Zendesk, Zoom.
Platform as a Service (PaaS)
PaaS is short for platform as a service. Rather than software that directly solves business problems, PaaS solutions focus on offering a development platform for their service. These tools help businesses instance, test, and deploy original code and forks of their software.
Examples: AWS Elastic Beanstalk, Heroku, OpenShift, Magento Commerce Cloud.
Infrastructure as a Service (IaaS)
Infrastructure as a service or IaaS is almost synonymous with cloud computing platforms. These solutions allow businesses to deploy, host, and scale web-based applications. Virtual machines enable almost limitless scaling of server capacity.
Rather than a set monthly fee, the pricing model is often pay-as-you-go.
Examples: Amazon Web Services (AWS), Google Cloud, Microsoft Azure, Rackspace.
B2B vs B2C SaaS Products
The final differentiator between these cloud services is their intended target audience. The functionality, design, and even pricing model is vastly different between B2B and B2C products.
What Is a B2B SaaS Product?
B2B or business-to-business SaaS products are hosted software solutions designed to solve business problems.
Think software solutions like CRM, ecommerce platforms, analytics, and more.
What Is a B2C SaaS Product?
B2C or business-to-consumer SaaS products are cloud-based software solutions designed to solve individual problems.
Think online editors, file sharing, website builders, streaming services, and even social media networks.
For an in-depth look at the differences, make sure to read our B2B vs B2C marketing guide.
Horizontal SaaS vs Vertical Saas
SaaS applications don’t just fall into categories based on whether or not their target market is consumers or businesses.
There are also categories based on how companies design their products and what needs they serve.
The Horizontal SaaS model includes SaaS solutions that serve the business needs of a wide variety of companies.
Instead of focusing on solving the specific business problems of one particular industry, they offer a broader range of tools that serve companies across industries and borders.
Vendors that succeed in this SaaS market are typically more mature companies. It’s almost a necessity to start a strong foothold in multiple industries and verticals.
- Salesforce offers CRM and workflow automation tools suitable for virtually any industry.
- QuickBooks offers accounting, bookkeeping, and invoicing tools mostly to online professionals but not exclusively. We also use their service here at Kinsta (more on that below).
Most successful horizontal SaaS vendors have “crossed the chasm” and managed to win a significant portion of the mass market.
Vertical SaaS refers to software solutions specifically designed for a specific industry need.
Instead of general solutions that companies need to integrate and customize, users can plug-and-play with little up-front effort. That’s possible because the software doesn’t have to be general enough for mass-market use.
- Opentable is a table booking system tailored to restaurants.
- Guidewire is an insurance platform designed explicitly for property insurance companies.
Some SaaS companies start by providing a vertical solution and expand to become horizontal at a later stage or launch new related products/services as cross-sells and upsells.
Now that you know a bit more about SaaS products, how would you like to know which ones we’re using to power up our company?
Here they are…
40+ of Our Favorite SaaS Products
If you are a brand new startup, we don’t recommend going out and immediately subscribing to all the tools below. We are merely highlighting SaaS products that help us be more effective as a company.
A lot of entrepreneurs have had great success bootstrapping their companies from the ground up and adding additional tools as they grow their revenue.
That is what we did here at Kinsta. Tools and services like these can add up fast, so do your research, be smart, and determine which ones you might need first to help you accomplish your priority goals more quickly.
Stripe because it is very developer-friendly, has low credit card processing transaction fees, and was easy to integrate into our backend dashboard.
Those of you who have followed us for a while know that our Stripe relationship had a rocky start back in 2014. But all companies make mistakes at some point, and Stripe did everything in its power to resolve the situation we encountered.
Fast forward two years, and we can say we still love Stripe! We think it is the best thing that has happened to online payments since PayPal, and are happy to call them a business partner. The takeaway is that customer support is more important than ever!
Recommended for further reading: How to Prevent and Reduce Credit Card Fraud by 98% Using Stripe Radar
Paypal is another leading tool for handling, sending, and accepting payments online for businesses and individuals.
You can transfer money, create and send invoices, create recurring payment subscriptions, and more.
At Kinsta, we mainly use Paypal for handling affiliate payouts, not for handling recurring customer payments or invoices.
Suggested reading: PayPal vs Stripe, which payment gateway should you use?
Other than Stripe’s internal tools, these are the SaaS products we use to stay on top of our revenue.
Baremetrics is just like its brand name says: it is all about the metrics! It offers analytics and insights for payment processors such as Braintree, Stripe, and Recurly.
When it comes to choosing some SaaS products for your business, this is a must-have.
Why do you need Baremetrics? Well, it simplifies the process of understanding your business’s revenue income stream and helps you make data-driven decisions.
You can instantly see juicy bits of information such as monthly recurring revenue, average revenue per user, refunds, upgrades, lifetime customer values, user churn, and probably the two most important ones: your net income and revenue growth rate.
You could calculate all this information yourself in a spreadsheet, but then immediately, you should be weighing the cost of your time for doing this.
Check out its dashboard demo (seen below). We love using Baremetrics at Kinsta, along with the Stripe integration. It gives us an instant overview of our business performance.
Baremetrics dashboard analytics
These are the tools we use to handle customer requests and inquiries at Kinsta.
Intercom is a customer platform with a suite of products for live chat, marketing, feedback, and support. Remember, support is key to any successful company. So if you want our advice, make sure you have a sound support system in place, whether this is chat, tickets, etc.
We have used Intercom since day one here at Kinsta, and it has worked very well for us. We pride ourselves on providing support from team members who are professional developers, and work with WordPress every day, contribute to WordPress Core, and other open source projects.
As a result, the expertise of our support department is second to none. Nothing is worse than launching a chat session and feeling like you know more than the person on the other end. That will never happen at Kinsta!
Intercom has provided an easy way for us to integrate chat and support tickets (see below) it into our dashboard, so customers know we are always one click away, 24/7. Our median support ticket response time in 2019 was 1 minute and 27 seconds!
It is one of our favorite SaaS products.
Collaboration and Internal Communication
We use a range of SaaS products to help improve our collaboration and internal communication.
You have probably heard of Slack by now! If not, you should immediately give it a try.
Slack is a messaging app for teams designed to make communicating with your colleagues fast and easy, no matter what platform they are on.
Every member of the team at Kinsta uses Slack on a daily, or probably hourly basis. It helps us do everything from chat about industry news, collaborate on team projects, and of course, share an occasional Giphy.
Giphy preview in Slack
We use the paid version, but the free version works great as well if the few limitations do not bother you. Slack is excellent for any company just starting, especially for remote teams.
Kinsta’s team is spread across multiple continents, so we depend on Slack for communication across timezones and platforms. When it comes to SaaS products, this is a must-have.
Make sure to check out our guide on how to use Slack effectively.
Trello is an online collaborative tool that allows you to easily create boards, lists, and cards to organize your projects. Trello is used by businesses all over the world, some of which include Adobe, Pixar, Google, PayPal, and National Geographic.
We love Trello here at Kinsta!
Trello allows us to easily create tasks and keep track of who is working on what. Even for our blog and inbound marketing activities, we have a Trello board to keep track of new topics, ideas, and setting deadlines.
Sharing a board is as simple as one click. We use the free plan, which makes this another must-have tool for startups!
Btw, Asana is another great project management tool worth to take a look. To compare the features, make sure you check out our detailed Trello vs Asana guide.
7. G Suite (Email + Collaboration Tools)
In 2019, nobody likes getting emails, and it seems that everyone is continually striving and failing to reach that inbox zero goal (is it though? ).
But every company needs a way to communicate through email. When it comes to email hosting, there are a lot of options to choose from, such as Zoho, Office 365, Rack Space, and G Suite.
The Google Cloud Platform powers Kinsta’s managed WordPress hosting, so obviously, we’re big fans of its infrastructure and apps.
We use G Suite for email hosting, which allows every employee to have a unique @kinsta.com email address and access it via Gmail or their favorite email client.
And when it comes to Gmail (and its add-ons and extensions), you hardly can go wrong. According to Email Market Share, as of December 2019, Gmail accounts for 25% of email clients usage based on the number of opens.
The basic G Suite plan, which is the one we use at Kinsta, is priced reasonably at $5 per user per month. It also gives everyone 30 GB of online storage for Google drive and access to Google Docs, which we use a lot here at Kinsta.
For more tips on how and why we use it, please check our detailed guide: The Benefits of G Suite for Your Business.
500 million people around the globe, along with over 200,000 businesses, use Dropbox on a regular basis to access and share documents and files on the go.
We use Dropbox at Kinsta to share large files and enable them to be more easily accessible by remote team members from anywhere, no matter what platform they are working on.
Zeplin is a collaboration tool specifically designed for developers and designers. It makes it easy to create, collaborate on, and share design and style guides complete with assets, specs, and code snippets.
Our developer teams use them to ensure that everyone follows the same standards, and stay on the same page during complicated projects.
Zoom is a next-level video conferencing tool. It works great on all devices, from smartphones to tablets to desktop.
At Kinsta, we use Zoom to enable close-knit collaboration between team members that are on all different corners of the globe. Plus we run monthly AMAs where team members share more details about their role within the company and personal hobbies.
11. Atlassian: Jira + Confluence
For software development, deployment, and documentation we use a combination of Atlassian’s Jira Software and Confluence.
This helps our team maintain a modern and efficient workflow and minimizes errors in the long run. On top of this, we have an internal resource where all procedures are documented so new employees can conveniently browse through right after their onboarding.
Airtable is a unique tool for task management that enables your teams to organize their work the way they want to.
Our teams mostly use Airtable to collaborate, manage projects and tasks related to customer relationships and lead generation and nurturing as a pretty advanced spreadsheet, which might recall a database some times.
Marketing and Sales
Below, we cover the suite of tools we use to improve our marketing and sales processes.
Keeping up with monitoring your brand on social media is a never-ending process and can sometimes be overwhelming and time-consuming. Mention scans billions of sources in over 40 languages so you won’t miss anything anyone says about your brand.
We use Mention to keep track of social mentions of Kinsta around the web. One great feature they have is their integration with Slack.
It allows us to quickly see Tweets and mentions from right within a private Slack Channel, along with an influencer score.
This way, we never have to waste time logging into a separate dashboard or get yet another email.
Close is a SaaS product created by salespeople for salespeople.
Nobody likes manual entry and Close tries to automate as much as possible. From calls, emails, and activity, so you can spend more time closing deals instead of entering data.
Our sales team at Kinsta uses Close for lead management, along with the powerful Zapier integrations, to automate it even more. And of course, some of these automation’s include Slack integrations.
Hunter is the most reliable solution for finding email addresses for leads and prospects, without having to call up and ask every time manually. With Hunter.io, email outreach becomes a much more valuable and efficient sales tool.
Our sales team uses it to help them connect with potential leads and start the sales process.
Mailchimp is used by over 20 million businesses and individuals to send emails to and newsletters.
As they say, “The money is in the list.” Building and maintaining a high-quality email list can be an excellent way for a company to generate more sales and keep its current customers informed.
MailChimp makes this process silly easy and has been perfecting its software for many years.
We use MailChimp here at Kinsta, and we are on a paid plan, but there is also a free one, which allows you up to 2,000 subscribers.
We are creating a lot of content and MailChimp is a great way to allow us to share it with subscribers each week. Make sure to subscribe to our newsletter!
All in all, MailChimp’s free plan is a great solution to get up and going while you start to build your email list.
Buffer is an integrated, all-in-one solution for managing and driving more engagement from multiple social media accounts.
We use it to help build our brand across Twitter, Facebook, and more channels. It helps us automate mundane tasks, as well as gives us further insights about which of our content works best on social channels.
SEO and Content Marketing
Content marketing and SEO are our main focus at Kinsta when it comes to building our platform. As a result, we use a number of SaaS tools to help improve our processes and help rank our content.
If you do any inbound marketing or SEO on your website, you must keep track of your keyword rankings. SEO is still alive and well in 2020 and keywords are still essential.
Even though things have shifted focus more to “topic” writing, keywords will always exist as Google’s algorithm is, after all, a computer algorithm.
We use AccuRanker at Kinsta to keep track of essential keywords we are focusing on ranking. It tells us whether or not we need to give an article a little more love.
AccuRanker allows us to track the keywords around a blog post, add a note of what we optimized, and then later return to see how our rankings were affected by the changes.
SEMrush is an all-in-one competitive data and analytics tool for digital marketing professionals. Keyword research for one is crucial if you are doing inbound marketing for your company, as well as getting a feel for where your competitors stand.
We use SEMrush at Kinsta to research new blog post ideas and strategically make data-driven decisions for our inbound marketing. This tool allows us to quickly see things such as search volume for a keyword or topic as well as how competitive that keyword is.
When it comes to keyword research, never assume people are searching for it. Always test that and see if it’s worth investing time and resources on it.
SEMRush keyword research
BuzzSumo is a fantastic tool for content marketing research. It can help you identify trends and find valuable influencers to recruit to your brand.
With unique content insights, you can quickly generate new ideas for your content strategy.
Here at Kinsta, we use BuzzSumo to make sure we are on the right page when it comes to our content marketing efforts.
Instead of just relying blindly on keywords and search data, we use it to find trends we can take advantage of with blog posts and articles.
Their web content research tool is the perfect fit for our content strategy.
BuzzSumo web content research
It helps us remain on the cutting edge in our industry, without spending all day worrying about content.
MarketMuse is an AI-based content planning and optimization solution. It analyzes the top content for search terms and keywords on Google.
Through this in-depth analysis, it can highlight essential topics, keywords, and questions that you should cover in your content.
At Kinsta, we use MarketMuse to ensure that we cover all relevant topics and questions when we write a post.
Our forte is long-form content, so it’s a match made in heaven for us. It helps us dot the Is and cross our Ts, both SEO-wise and content-wise.
Ahrefs is an all-in-one SEO solution that can help you with plenty of activities such as keyword research, competitor research, SERP, and keyword monitoring just to name a few.
We use it to help us identify high-value, low competition keywords to target with content from our blog and other pages. Ahrefs has played a key role in growing our organic traffic and making content marketing one of our best channels for customer acquisition.
Crowdin is a localization management tool that helps distributed companies manage their multilingual content.
We use Crowdin to make sure we speak the language of our customers, no matter where they are located. It helps us provide a better experience to our global customers.
24. Quuu Promote
Quuu Promote is a social media promotion solution that helps you get shares and reach new audiences with each new post. It gives you access to real people on Facebook, Twitter, and LinkedIn.
At Kinsta, we use Quuu Promote as part of our social media marketing strategy. It helps us reach a larger audience with every post and establish our brand in new areas.
Analyzing Web Traffic
At Kinsta, we believe in taking a data-driven approach in all that we do. That’s why we rely on an analytics SaaS products to help us stay on top of things.
25. Crazy Egg
Crazy Egg is a heat map and website data analysis tool that helps you dive into how people are interacting with your website.
One of the main features we use at Kinsta from Crazy Egg is the excellent heatmap feature! You can just set up an experiment, let it run, and come back to see exactly where people are clicking on your website.
See how many people scroll down the page, where they stop, and what sources of traffic are clicking on what. Crazy Egg is great for improving your CRO and testing out new landing pages.
26. Google Analytics
In 2020, every company with a website has heard of Google Analytics. But very few use the website analytics tool to its full potential.
From detailed channel breakdowns that show pageviews, bounce rates, and conversion rates by source, to flow charts that show how users interact with your website, Google Analytics has it all.
Here at Kinsta, we use Google Analytics to help us better understand our readers and users.
The detailed reports give us a better understanding of what content works and what content doesn’t.
We can also identify problems with navigation and specific weak points by examining our user flow reports.
Check our in-depth guide on how to add Google Analytics to your WordPress site.
Hotjar is an advanced analytics and user experience mapping tool that helps you improve your UX, design, and web apps/websites in general. You can track your visitors’ journey in videos that your design/development teams can dive into and dissect.
You can also view heatmaps and other visual breakdowns of how users interact with your website or app.
We use Hotjar to improve the experience for all our users, to make sure we are providing the easiest and most intuitive UI and UX available in a managed WordPress hosting solution.
Server and Hosting
To make sure that our managed WordPress hosting solution is cutting-edge, we rely on a number of specific SaaS products such as:
28. New Relic
New Relic offers all sorts of services, from application performance monitoring, server monitoring, mobile monitoring, and real-time user insights.
SaaS products: New Relic
We use two of New Relic’s products here at Kinsta, and that is application monitoring and synthetics.
We use New Relic on all WordPress sites hosted with Kinsta to monitor uptime and also performance (btw, with a unique license key, you can set up monitoring as well).
If your website starts to slow down, we can easily see this on our end and then take action to see what might be causing the issue. New Relic has been an excellent tool for us to ensure we provide the best support for our WordPress customers.
New Relic – APM tool for SaaS products
Check out our in-depth post on how we use New Relic at Kinsta to troubleshoot performance issues on client’s sites.
Cloudflare is a free global CDN (or rather fully proxy service), DNS, DDoS protection and web security provider that can speed up and protect your website.
Kinsta uses CloudFlare for customers who are looking for a free and or premium solution to speed up their websites around the globe while also offering DDoS protection. Another advantage our customers get is that they can save a lot of bandwidth.
Typically a CDN will handle the delivery of 60-70% of a website’s traffic load. So by offloading assets to a CDN, this can ensure you don’t go over your bandwidth limit with Kinsta. Make sure to check out our CloudFlare integration guide, as well as our KeyCDN integration guide.
As many of you probably know, Github is a free open source repository that is used by people, companies, and developers to help build software. GitHub allows teams to contribute and fork to over 38 million projects, including WordPress itself.
We don’t do anything publicly available to people on GitHub, but the team at Kinsta uses GitHub to manage our internal development for our website and other projects.
If you work in a group setting with any code, then GitHub is incredible because it offers a version control system that allows multiple developers to contribute and commit updates easily.
Want to know more about version control? Check our git vs GitHub guide.
31. Amazon Route 53
Amazon Route 53 is a highly available and scalable cloud DNS service. It is designed to give developers and businesses an extremely reliable and cost-effective way to route end users to Internet applications.
Amazon Route 53
Here at Kinsta, we don’t settle for mediocre when it comes to web performance and reliability. DNS is just one area that we take very seriously. We include Amazon Route 53 premium DNS services for every customer that hosts their WordPress website with us.
Amazon has an enormous infrastructure and a long history of providing additional DNS features such as latency-based routing, Geo DNS, traffic flow, and, most important, DNS failover. Kinsta customers can even modify their DNS records right from their MyKinsta dashboard.
Statuspage is a tool that helps you communicate the real-time status of your servers, app, and service to your customers. Major platforms like Dropbox use this to make sure their user base is always up to date.
And that’s exactly what we use it for here at Kinsta as well. It helps us automate communication during incidents, so our technical team can focus solely on fixing the issue ASAP.
Wistia is a high-end video hosting and analytics platform. We like to think of Wistia as the Roll’s Royce of video hosting used by companies such as Moz, MailChimp, and HubSpot.
We use Wistia at Kinsta to showcase our customer testimonial videos. While there are other similar platforms we could use, such as YouTube and Vimeo, we chose Wistia because of the seamless integration it provides with our website.
If you want an elegant looking HTML5 video player integration, then Wistia is one you should check out. And if you are OK with Wistia branding on your player, they offer up to 5 videos hosted for free. It can be a great alternative to YouTube for newer startups.
Billing and Accounting
Billing and accounting isn’t the most fun aspect of running a business. But with the right tools, it becomes a lot easier.
SendGrid is another email marketing platform and service which focuses on transactional emails. Some of its clients include Uber, Spotify, Airbnb, and Yelp.
While MailChimp works great for our inbound and content marketing, we use SendGrid at Kinsta for the transactional side of things. For example, emails between servers and applications.
Like many other companies, we previously used Mandrill (owned by MailChimp) until it was shut down.
For transactional based emails, SendGrid is a much more cost-effective solution. If you send a lot of emails from your software or applications, SendGrid does an excellent job. If you would like to get started, take a look at this complete Sendgrid setup guide.
However, we don’t necessarily recommend them for typical marketers. There are little things such as the UTM parameters having to be manually updated for each campaign, which can be a bit frustrating. Its WYSIWYG builder has improved tremendously over the past years, though, and the Sendgrid team is working hard to provide similar functionality as services such as MailChimp. But remember, Sendgrid’s focus is on transactional emails, not marketing.
Unfortunately, the not so fun part of any business is having to run the books, payroll, and accounting. But it is one of those things every business owner must do.
ClearBooks is an online accounting software that tries to simplify the process both for startups, small businesses, and even accountants.
We use ClearBooks at Kinsta partially because they are a UK company, but also because they have a lot of experience with simplifying the online accounting process.
None of us here at Kinsta are accountants after all. Having launched in 2008, they are not new to the financial market and are accredited by ICB, ICAEW, and ACCA. If you are in the UK, ClearBooks might be one you want to check out.
Quickbooks is a simple accounting solution that helps you organize your payments, expenses, and total revenue. It’s easy to use and provides you access to reports that visualize the exact financial situation of your business.
At Kinsta, we’ve transitioned to using QuickBooks for invoicing, as it supports batch invoicing, and it’s been easier to integrate via APIs.
37. When I Work
When I Work
When I Work is an online employee scheduling software and time clock. It allows employers with remote workers in multiple states/countries to easily keep track of when everybody is working.
At Kinsta, we use it to help our customer support and emergency engineer teams collaborate on covering the necessary time slots. It simplifies our shift management process and cuts down on a lot of excess communication that we had in the past.
Finally, we use a couple of SaaS products to design our content.
Every good website needs good visuals, and that is where Iconfinder thrives. It currently has a database of over 3.9 million icons, consisting of over 60,000 sets.
We use Iconfinder for icons on both our website and the Kinsta blog. We source most of the featured images you see here on the blog and in our Knowledge Base articles from Iconfinder.
One of the best features of Iconfinder is that they provide you with all four formats, SVG, PNG, AI, and CSH. We typically prefer working with SVG because they are scalable to any resolution without losing any image quality.
Canva is a web app that promises to help you “Design anything and publish anywhere.”
With a drag-and-drop interface, and much fewer options and tools than Photoshop, it’s easy to learn and use.
Even people who think they have no creative ability can use the existing templates to create blog graphics and social media ads that look great in just a few minutes.
At Kinsta, we use Canva to sketch graphics for our team of designers to finalize later. It helps speed up the process of visual design for content since there is less room for miscommunication.
Since we handle copious amounts of data in providing our service, and in our marketing efforts, it can be hard to gain valuable insights by just looking at tables and numbers.
That’s why we use SaaS products for data visualization as well.
Kibana is a data visualization tool for Elastic Stack that enables your team to visualize your ElasticSearch data.
In short, you can create and explore visual tables and reports that will give you unique insights. You can also deploy machine learning to figure out patterns that the human eye can’t spot.
At Kinsta, we use Kibana to make sense of the data in an easy-to-understand format.
Worried about keeping track of the passwords for 40+ different SaaS products? You won’t have to with a password management solution.
With 1Password, you can log in to all your company social media profiles and SaaS tools with just a single password. It really is that simple. No more costly minutes wasted resetting passwords by email every week.
At Kinsta, we use 1Password to ensure that everyone always has the access they need to the tools they use. It eliminates downtime and improves all our team’s efficiency.
Finally, we use a tool to handle digital signatures.
Digisigner is a free tool for receiving and leaving signatures on digital documents, like contracts in a PDF format sent by email.
At Kinsta, we use Digisigner to handle employee and freelancer contracts, considerably speeding up the hiring process. It also makes it easy to keep digital records of all our important documents.
As you can see, we use quite a few different SaaS products here at Kinsta, in all sorts of different areas. Each one of them serves a specific purpose and helps us be more productive and focus on what matters. And that is providing you with the best WordPress hosting experience possible!
Do you have any innovative SaaS products you currently use that you think we might like? If so, feel free to share them below.
The post 40+ SaaS Products We Use to Grow Our Web Hosting Company appeared first on Kinsta Managed WordPress Hosting.
Software-as-a-service startups have become a staple of the new cloud-based economy. There are an estimated 10,000 private SaaS companies, and 50 publicly traded giants with a total market cap of over $225 billion.
10 Largest SaaS Companies
And what do these companies have in common? They leveraged what is usually referred to as SaaS marketing.
But what’s SaaS marketing it? What do you need to measure to succeed and what channels perform better than others to sell your SaaS product?
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Let’s try to answer these (and more questions) with this blog post. Ready? Let’s dive in!
sell subscription-based products to new customers.
You can think of SaaS marketing as the art of making sure that your SaaS product is relevant and able to address your target customer’s needs in a way that makes prospects want to know more about your product, try it, and eventually subscribe to, over the multitude of competitors.
We’ll see later how SaaS companies get their customers, but first let’s clear an important aspect when it comes to SaaS marketing: terminology.
Like any specific category of marketing, even with SaaS marketing, there are some technical terms you should get more familiar with like CAC, LTV, Churn, and NPS to better understand the concept behind this type of marketing.
SaaS Marketing Terminology Explained
There are a couple of terms that are mostly used when discussing SaaS marketing. We’ve compiled a list of them here, and explained each one.
Customer Acquisition Cost (CAC)
Simply put, the customer acquisition cost is the dollar amount it costs you to gain a new paying customer on any given marketing channel. For example, if you spend $1,000 dollars on Google ads, and get 10 paying customers, your CAC is $100.
Formula: All expenses on marketing channel / Number of paying customers it results in.
With organic channels like content marketing, organic search, or organic social it can be complicated to accurately measure CAC.
Customer Lifetime Value (CLV, CLTV or LTV)
Customer lifetime value is basically how much a single paying customer is worth to your business on average. If you only sell one subscription at one price for $30/month, and your customer stays on for an average of 6 months, your CLV is $180.
If you have multiple subscription prices, the calculation becomes a little bit more complicated.
Formula: Average Subscription Price * Average Customer Lifetime (Length of Subscription) / Number of Customers.
The CLV:CAC ratio is simply the ratio of which the customer lifetime value is greater than your customer acquisition cost. If it costs you 60$ to generate a customer, and each customer is worth on average $180, your CLV:CAC ratio is 3.
Formula: CAC / CLTV
Customer Churn Rate
Customer churn rate is the percentage of paying customers that cancel their subscription during any period of time. For example, a weekly churn rate will be vastly different from a quarterly churn rate.
To calculate your churn rate, you simply decide on a set period of time and calculate the percentage of total users who left. If 100 out of 10,000 customers left in a month, your monthly churn rate is 1%.
If you want to calculate churn separately from growth, you need to exclude newly acquired customers from the totals when you calculate.
Formula: Users That Left in X Period / Total Existing Users X 100
Net Promoter Score
The Net Promoter survey is a widely adopted survey that many startups and SaaS businesses use to gauge how likely a user is to promote their product.
It is a simple one-question survey that asks the customer to rate how likely they are to recommend your product.
Net Promoter Score (Image source: Getfeedback.com)
Any customer that leaves a score of 9 or 10 is considered a promoter. Users like these are likely to share positive information about your product or service.
Any customer that leaves a score of 1-6 is considered a detractor. A detractor is someone likely to share negative information about your company.
Anyone who chooses a 7 or 8 is considered neutral. These customers are okay with your product but are unlikely to share information about your service, negative or positive.
Calculating Your Net Promoter Score (NPS)
Let’s look at an example. You prompt 100 customers with the survey and all 100 customers answer the survey. 15 customers, answer from 1-6, 30 people answer from 7-8, and 55 people respond 9-10.
These results mean you have 55 promoters that you add, 15 detractors that you subtract, and have 30 neutral, that you don’t count.
55-15 = 40, which means the NPS, in this case, is 40.
Formula: %Promoters – %Detractors
Customer onboarding refers to the process of getting users who signed up for a free trial to start using your service and eventually become a paying customer. The more someone is using your service, the more likely they become a paying customer when the trial ends.
And the more a paying customer relies on your product, the more likely they will stay a paying customer for the foreseeable future.
Monthly Recurring Revenue (MRR)
Monthly recurring revenue is simply the total amount of fees paid by your total number of paying customers each month. Make sure you don’t include flat sums for annual/quarterly subscriptions during that month. You should also make sure to exclude any one-time payments.
How to Define Metrics in SaaS Marketing
When you are marketing a SaaS product as opposed to a one-time sale, you are investing in the future of every customer relationship. That is the difference between SaaS marketing and consumer product marketing.
The potential revenue typically means that you use customer lifetime value, rather than the value of first interaction when you are calculating marketing ROI. These metrics help you when budgeting for channels to spend on.
For a typical ecommerce store, it would be enough to have ecommerce conversions that track the value of each sale.
Then all you need to do is check the campaign breakdown in Google Analytics to see how your campaigns are faring.
Google Analytics Dashboard
But with a SaaS business, there are a few more hoops to jump through. If you use a freemium strategy, you need to know the trial user to paying customer conversion rate. And you need to know the average customer lifetime value.
Then you need to set up different conversion points for free trials and actual paying customer signups.
How To Measure/Project Marketing Spend Effectiveness for SaaS Companies
If your average customer value is $180, and 20% convert to paying customers, on average, a new trial user is worth $36.
Formula: Average Customer Lifetime Value X * 0.% of trial users that convert to customers = Average value of trial user signup.
Based on the example here, you can afford to invest up to $35.99 for each trial user to convince them of becoming a paying customer and still turn a profit. So at that point, you can set up a Google conversion goal for trial users with a value of $36.
Google Analytics Goals setup
This metric will allow you some insight into whether or not a campaign is likely to be profitable long term, or not.
But that theory doesn’t always play out as CLV and trial user conversion rates can vary from channel to channel.
Measure Channel-Specific Metrics
While it’s essential to have a grasp of the average CLV and trial user conversion rates from all channels, you also need to measure each channel individually.
If you use a CRM like Salesforce, you can automatically tag your customers with the medium or channel they visited from. You can, for example, achieve this with UTM parameters.
You can also create separate landing pages with hidden fields in the signup forms that indicate the channel that sent them.
Why is this important? Because you could end up wasting tens of thousands of dollars on channels that don’t convert trial users into paying customers.
Dean McPherson, co-founder of Paperform.co, found this out the hard way. They were running Google Search Ads and were converting clicks into trial users for only $4 each. When they calculated the ROI based on the average rate of trial users to paying customers, it made perfect sense to keep going.
But then he did a channel-specific review and looked at how many of the Google Ads generated trial users had converted.
The answer was shocking. A big fat zero trial users the SaaS gained through paid Google Ads ended up converting.
They immediately turned off their Google Ads campaigns following that discovery.
Paperform turned off AdWords
This SaaS horror story is the perfect example of why you need to measure the CLTV and trial user conversion rates for every individual channel.
Otherwise, you don’t know the real impact each channel has on your bottom line.
The Role Of Free Trials in SaaS Marketing
You can’t talk about SaaS marketing without touching upon the role of the freemium or free trial model.
Almost every major SaaS company offers a free trial of their product.
Salesforce offers free trials
The fact of the matter is that it’s a lot easier to convert cold traffic on a free offer. Any SaaS company that offers a free trial is betting that it’s worth the extra overhead of dud signups. Or, they’ve split-tested and know for sure they make more money with free trials.
The best selling tool/argument for a growing SaaS needs to be the product itself. That’s why free trials can be so useful.
It’s one thing to hear a sales rep say: “Our product is way better than option A, you will no longer have problems like XYZ if you make the switch.” It’s another thing altogether to use the software and feel the difference yourself.
But that doesn’t mean that free trials have to be the basis of your go-to-market strategy. Other successful SaaS businesses run paid weekly/monthly trials at a discounted rate. Ahrefs, one of the most successful SEO SaaS businesses on the web, offers a one-week trial for $7.
So free trials aren’t necessarily the only business model you can settle on and win with SaaS marketing tactics.
Figuring out what will work best for your business is only possible through experimentation and testing.
Top Channels For SaaS Marketing
The key to a successful SaaS marketing campaign isn’t to copy the channels/platforms and social media posts of your competitors. You have to develop a culture of measurement, ideation, and experimentation. Which channels will work for your business depends on your target market and the skill-set of the founding team.
Below we’ve included a list of channels that are scalable for up and coming startups. We haven’t focused on paid acquisition/SEM because the channels typically aren’t scalable for early-stage SaaS companies.
As an example, at the time of writing, the general keyword “CRM” costs up to $12.72 for a single click. That means you need to generate more than $13 of value from every visit to your landing page.
Google Ads Bids on CRM keywords
For most new businesses, this isn’t feasible. You would need an impossible conversion rate, an outrageous trial to customer ratio, and very high LTV even to try turning a profit. Big tech companies are using their big budgets to buy out smaller competitors.
That’s why you need to think out of the box and target platforms that reward small companies for creativity and originality.
SEO stands for search engine optimization. In essence, the spirit of SEO is to create content tailored to people’s search terms. You also have to optimize your pages and website for SEO to get organic traffic from Google and other search engines.
93% of all online experiences start with a search. As of August 2019, Google maintains a global 92.37% market share on all search traffic. And 57% of B2B marketers single out SEO as their biggest lead generating channel.
If your SaaS is primarily B2B, this means that SEO should likely be the priority to test.
These are the basics of search engine optimization:
- Use SEO tools to identify keywords that your potential customers are likely to search for.
- Find low competition opportunities among those keywords.
- Create pages and articles targeting relevant keywords.
- Optimize these pages for both your target audience and search engines like Google and its alternatives.
- Build relevant links from high authority websites.
- Analyze and keep tabs on what’s working for your site, and what isn’t.
It might sound complicated when summed up like this, but with the right tools, most SaaS companies will learn in no time.
Let’s dive into an example to see just how powerful SEO can be for a SaaS product.
Success Story: Zapier
Zapier has exploded and become the number one integration tool by implementing a simple SEO strategy at scale.
SimilarWeb report on Zapier.com
According to SimilarWeb, zapier.com gets over 5 million visits per month. And the majority of this traffic comes from organic SEO.
SimilarWeb Search report on Zapier.com
More than 56% comes from search, with +10% of branded queries. Even if we remove the branded searches and paid traffic, Zapier gets lots of visits from organic search every month.
And let’s have a look at Zapier.com with another tool we love here at Kinsta, Ahrefs:
Ahrefs report on Zapier.com
Although visits don’t match as different tools use different ways to track and forecast these metrics, you can still see how organic traffic has grown in the past years up to 1M+ monthly visits.
Now, why their strategy is powerful? Because it’s straightforward!
Zapier’s marketing team targets keywords that have to do with integrations that are possible with Zapier. For example, “Slack Trello integration”.
Google SERPs for “slack trello integration”
One by one, the keywords are relatively low volume, but when you target thousands of different ones, it adds up to a lot.
They also create unique landing pages targeting “SaaS tool” + “integration” search terms.
One of the many Zapier LPs
SEO Basics: Keyword Research
The foundation of any good SEO strategy is keyword research. Keyword research is where you figure out which specific words people use when they search for content related to your business.
Though not ideal, to start, you can do basic keyword research with free tools such as the Google Ads keyword planner tool. For example, if you search for “data visualization,” it will display a list of relevant keywords.
Google Keyword Planner
It also includes metrics that can point you in the right direction. The search volume shows you how many people search for the term per month. Competition indicates how many other people are advertising on Google. Finally, top of page bids shows how much a company is willing to pay for the keyword.
High competition and top of page bids are generally an indicator of high commercial intent. Commercial intent means that the searcher has an intention to purchase a solution.
So ideally, you want to target keywords with decent volume and high perceived commercial value. But you have no way of knowing which of these keywords are feasible to rank for in Google.
The competitive metrics in the keyword planner only show how many companies are bidding for each keyword. For further SEO-related insights, you need to use a more advanced keyword research tool.
To learn more about Keyword Research, and advanced keyword research tools like SEMRush, Ahrefs, and the like, read our guide to keyword research.
SEO Basics: On-Page SEO
It’s in the best interest of Google to provide a user with the highest quality result for every search. That way, they ensure that users come back to Google when they are searching for something.
So Google tries to provide high-quality, fresh content from safe, well-organized, and fast-loading websites. That is the essence of on-page SEO.
Google has a tool to help you out: Google Search Console.
Check for errors in Coverage and Sitemaps.
Google Search Console
That covers the absolute basics of making sure that you have no glaring SEO errors on your pages.
Again, third-party tools can come in very useful here. But if we tried to cover all the basics of on-page SEO, it would become a post of its own.
Luckily, we’ve already covered a 45-step checklist for WordPress SEO that helped us grow our organic traffic by 517%.
On average, customers engage with 11.4 pieces of content before converting. And 70% of customers prefer getting to know a company via articles over ads.
Content marketing is an approach where you focus on creating and distributing high-quality content through a variety of channels. We’re huge fans of it here at Kinsta and we’ve been implementing it since our early days.
Content marketing works best when you develop a strategy that includes multiple formats:
- Blog posts.
- White papers.
By building a reliable resource for your target audience, you can build a following. Each content piece can be the start of a relationship with prospects and potential customers.
To succeed with content marketing, you need a strategy for distributing your content, and a voice that your target audience will relate to. Make sure to check out our in-depth guide on Content Marketing.
The Kinsta blog
This article and our very own Kinsta Blog is an example of a SaaS company investing in content marketing. We focus on providing high-quality content that is immediately useful to our target market.
As the most important acquisition channel, we rely heavily on SEO, and the writing process for each new article always starts with keyword research.
For the promotion aspect, we focus on building our email list, to which we send our weekly newsletter, and social media accounts to distribute our content.
Content Marketing Strategy
Difference between content strategy and content marketing
Many people confuse content strategy with content marketing. As Moz explains:
Content strategy concerns itself with the vision—the ins and outs of how and why your content will be created, managed, and eventually archived or updated
Content marketing focuses on the tactics and execution—the actual creation, curation, and editing of content that’s specifically created for the purposes of marketing.
The general strategy will include target audience, distribution, positioning, tone, and more.
For example, let’s imagine that your target audience is senior developers in their mid-40s. You might consider distribution channels like Stack Overflow, development-focused niche Facebook groups, and SEO. You could position yourself as a “fellow expert,” tackling complex topics that interest them and using jargon and developer memes.
All of this will change if you are targeting junior salespeople in their 20s or stay-at-home moms.
Content Marketing Tactics
Then there are the specific tactics of exactly which content you should produce. The majority of marketers deal mostly with blogging, visual content (infographics, etc.), and videos.
Commonly used types of content (Image source: Social Media Examiner)
Which medium you should choose for your business depends on your target audience, and your available talent/budget.
Even if high-quality explainer videos are the preference for your ideal customers, it just might not be within your budget.
Other tactical decisions include where and how to promote your content, and how to segment and diversify.
It’s cheaper to communicate with and build relationships with people who are already interested in your product than converting strangers. That’s why email marketing can record ROI as high $42 per dollar spent. That’s utterly unheard of for paid acquisition of any kind.
As a result, 59% of B2B marketers single out email marketing as their most effective channel.
The essence of email marketing is to:
- Create a landing page or signup form to collect leads with a “lead magnet” or newsletter.
- Develop a strategy to drive traffic to this landing page or signup form.
- Write and send emails that help build trust and position you as an expert in the eyes of your subscribers.
- Advanced: Send automated, personalized emails based on user interaction with your site.
The great thing about email is that it’s the most effective channel for lead generation, but it’s not too complicated or difficult to get started.
You can use a simple approach like a weekly newsletter or an automated email drip campaign to convert leads to customers.
Once you’ve built an audience, you can tap into marketing automation tools to segment your list and send automated personalized emails.
It Doesn’t Have to Be Complicated: Newsletters Still Work
Landing page of the Kinsta Newsletter
Email marketing has great synergy with other marketing channels. It helps you stay in touch with people who visit your site from Google or social media, who aren’t ready to buy. But don’t think you have to write a 20-piece long email series on a topic.
Newsletters still work.
By providing genuine value up-front, and over time, we build a relationship with blog readers. Every subscriber gets our detailed ebook on how to speed up their WordPress site.
Since they are interested in WordPress tips and speeding up their site, we already know they are in our target market. By subscribing, they self-identified as WordPress site owners who care about performance.
As a result, we treat every potential customer with respect and try to offer value first instead of bombarding them with automated sales emails.
If you want further proof that newsletters still work, take a look at The Hustle, a tech-focused email newsletter that recently broke 1 million subscribers.
Autoresponders or automation tools are cloud-based SaaS apps that help you automate your emails to your customers and prospects. Imagine if every time someone signed up for your newsletter, you had to send them their welcome ebook manually.
That would eat up hundreds of working hours every year. Not exactly an effective use of your time.
That’s where autoresponders come in.
For example, whenever anyone signs up for our newsletter, the form automatically sends the data to the autoresponder. Then within seconds, they receive a welcome email like this.
Kinsta Autoresponder Message
You can use autoresponders to send automatic emails in response to different user behavior on your site.
Perhaps the most important one is automatically following up on people who left halfway through the checkout process.
If you want to learn how to master autoresponders, read our guide on how to use Mailchimp to get started.
Email List Segmentation
If you use email list segmentation, your automated emails will be personalized and relevant. This way, your potential customers see messages that matter to them at that moment. This approach will get you 26% higher open rates than mass emailing.
You can easily create separate lists for subscribers that have visited your blog in the last week, or who have signed up for a free trial. You can further create specific lists for different categories of paid users, keeping them out of all promotional mailings that would be irrelevant to them.
Email Segmentation Example
The above is an example of what such a flow might look like on paper.
Through a varied approach of organic posts and paid ads, many SaaS companies are seeing success through marketing on social media platforms.
With social media marketing, you use a mix of organic posting and paid ads to build a following on one of the following social media platforms:
There are more than 3.48 billion social media users in the world. That makes social media one of the most scalable channels.
Also, there are no inherent platform costs with getting started. You can set up a business Instagram page today for an investment of zero dollars.
That’s what makes social media marketing one of the first things new SaaS companies experiment with.
But it takes time, effort, and investment to succeed.
Squarespace Instagram account
Squarespace, a website builder SaaS, has over 201,000 followers on Instagram (further reading: Squarespace vs WordPress).
They have managed to get there through a combination of ads, influencer marketing, and non-stop, high-quality output.
In their latest campaign, they partnered with photographers and featured a few beautiful shots, before showcasing the photographer’s website. A website made with Squarespace, of course.
Squarespace Instagram Campaign
It’s not enough to just post what’s on your mind and hope to attract an audience.
Learn from Successful Competitors
The biggest “cheat code” when it comes to social media marketing is to dive under the hood of what successful competitors are doing.
If you are already aware of such direct competitors, you’re in luck. Just head to their social media pages and analyze the content.
Try to answer the following questions:
- Which post types have the most engagements?
- Which tone of voice seems to resonate the most?
- How are they positioning themselves?
As a social media strategy is often included as part of a broader content marketing strategy and deserves its own post, we’re not going to cover it in detail here.
But if you want to dive in and learn the specifics of SMM, you can refer to this guide from Hubspot.
Influencer Marketing (Focus On Micro-Influencers)
To be seen on social media, it’s not enough to create a page and post some images. Organic reach from company pages dropped 52% in 2016 alone and has steadily declined ever since.
You need to reach an audience. That’s where influencer marketing comes in.
Influencer marketing is a concept where you reach out to influencers and enlist them to promote your products. Typically, companies run influencer campaigns where they identify relevant influencers and pay them to feature a particular product.
How much a single placement costs depends on the size of their following, and how engaged their audience is. A single Instagram post from Selena Gomez will set you back millions of dollars.
That’s not a viable strategy for most up and coming SaaS companies. The audience of big influencers is too broad, so you end up paying for a lot of uninterested eyeballs.
Micro-influencers are the most effective way to do this on a tight budget. Engagement rates for micro-influencer campaigns are 60% higher than for traditional ones.
So forget The Rocks, Christiano Ronaldos, and Ariana Grandes of the world. Focus on small bloggers, developers who run local development groups or meetups, etc.
Micro influencer brand impact
Here’s a quick example: Wix sponsors Andy J. Pizza, a Podcaster with 13.8k followers on Twitch. Simply because the listeners identify so strongly with the host, some of them end up choosing Wix
These are the sort of bonds smaller influencers can have with their audience.
To find your influencers, you can either try your best at searching using the platform’s search function or use a third-party tool. One influencer tool you can use for free is Buzzsumo’s Twitter Influencer search.
BuzzSumo Twitter Search
Let’s say your main goal is to run an Instagram campaign. Just add a filter for that in your search by selecting “Has Instagram Profile.”
This filter only Twitter users that are also active on Instagram:
Buzzsumo Activity Filter
When you search, use a phrase that relates to your target market. It doesn’t need to be an exact match keyword, it can be a related concept or even a product.
For example, if your SaaS is a data visualization plugin that integrates with Google Analytics, you can search for the phrase “Google Analytics”.
Buzzsumo Twitter Influencers sorted by Reply Ratio
Once you have the results, you’d want to sort them by “Reply ratio” to see who’s more likely to respond to your outreach email or DM.
Popular Influencer Marketing Tools
The following is a list of popular influencer marketing tools you can use to both find influencers and measure their effectiveness.
- Sprout Social
Niching Down Before Targeting the Mass Market
As a technology company, it might be in your best interest to niche down and specialize your product to serve a particular vertical. With a specialized service, you set your product apart from horizontal SaaS competitors and gain a marketing and sales edge.
Instead of a disadvantage, it can make it easier to get a foothold in a certain industry and grow through endorsements and word of mouth.
Once you’ve established yourself in one small market, you can use the credibility and cash flow to drive marketing efforts targeting bigger markets.
You can read the book “Crossing the Chasm” by Geoffrey Moore to explore this approach further.
Kinsta has been able to thrive as a company by focusing on the “narrow niche” of managed WordPress hosting. Salesforce, now the top CRM in the world, initially focused all of its energy on salespeople.
Your company might also face better odds if you become the big fish in a smaller pond.
Always Track Conversions and Measure ROI
There can’t be any successful business if you don’t know what’s working and what is not. SaaS companies are no exception to this.
That’s why you should set up conversion tracking right from the beginning to see which channels perform better. If you have no idea, maybe because you just started, make a judgment call on which channels to target with your available budget and resources and move from there.
Make sure that long-term organic strategies like SEO or Content Marketing get a longer time-frame than micro-influencer marketing or paid acquisition.
As long as you keep track of the costs required and revenue generated by each channel, you can calculate your ROI. Google Analytics’ default acquisition report can help you stay on top of the early results.
Google Analytics Channel Breakdown
If you’re running any micro-influencer campaigns, you can also measure the results by creating custom landing pages or by using UTM parameters.
While CAC is a staple metric for SaaS, organic acquisition channels make things more complicated. For content marketing, you need to consider things like writer and designer wages, time spent by marketing manager on strategy, and other overhead costs.
If you are focusing on SEO, you also have to consider that the lifetime value of each article will probably far exceed any customers generated in the first few months.
Grow and Convert offer a ready-to-use spreadsheet model to help you calculate this.
Model to calculate CAC from Content Marketing
If you have a handle on all the required data, and you can calculate the CAC for each channel, you will know where you should focus.
This guide is far from being exhaustive as the world of SaaS is pretty complex. What it does, though, it’s helping you move your first steps towards understanding the foundations, highlighting the importance of finding the right acquisition channels, and which key metrics to measure.
You don’t need the budget of Salesforce to kickstart the growth of your SaaS (and Kinsta is living proof of this). You need to have the right product, find the right channels, and the right message (your market positioning).
Overall, SaaS marketing is not that different from traditional marketing. This means, if you’ve discovered a tangible need/pain point in a single niche for your SaaS product, you’re off to a great start already. Why? Because marketing a product that isn’t solving any “real” issues, is simply the hardest thing to pull off.
The post 7 Key Principles of SaaS Marketing (With Formulas, Examples, and Tools) appeared first on Kinsta Managed WordPress Hosting.
A year after my first post on bootstrapping a startup, I’m writing another one about the challenges and lessons we’ve learned while growing our SaaS company. As well as how to go from your first customer to your first 1,000 customers.
The reason I decided to write a second part is not just because I have a lot more to say but the feedback our team received was incredible! You guys really loved that post, you left a bunch of comments, and shared your own stories. Many of them were the same everyday challenges we are facing and it encouraged me to start writing again so you can see what has worked for us.
In case you missed the first part you can take a look here: 16 lessons learned bootstrapping Kinsta from $0 to 7-figures revenue.
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Bootstrapping a startup
Deep down I was hoping that the post would be popular and generate some buzz, but the results surpassed my expectations!
The same moment it was submitted to Hacker News it started getting clicks, upvotes, and comments. Two hours later it was #1 and the post had 300-400 concurrent visitors! Since we provide managed WordPress hosting and our tech guys know their job, we didn’t have any technical difficulties keeping the site up and running. Phew
Hundreds of concurrent visitors
Tens of thousands of visits, 315 upvotes, and 105 comments later I was convinced that transparent posts on growing a company are the type of content that you as founders are interested in and something we all can learn from. So here we are again!
In the first post, I covered 16 important lessons which helped us to not only grow the business and increase ARR (Annual Recurring Revenue), but also how we did it without any outside investments. We got traction in an industry which is dominated by billion dollar companies.
When we decided to give Kinsta a try back in 2013 we couldn’t imagine that we would ever have 1,000 paying customers. It’s now early 2019 and we’ve already way surpassed this first, but very important milestone.
I wanted to stick to this number and add it to the title of the post, as it’s kind of a magical number, isn’t it? It feels good to say “Hey, I have one thousand customers!” And if you can achieve 1,000 you get to 10,000, 50,000 and so on.
There is nothing more fulfilling as a company than starting from the very beginning and watching your customer base continually grow over time. But once you reach this magical 1,000 customers you can’t just sit back and relax. In many ways, it’s just as challenging as the early days of the business. You just have to deal with different kinds of challenges like constantly hiring, managing your growing team, handling finances, and a more complicated product development cycle.
Hopefully, the following lessons and insights can help you fast track growing your business to 1,000 customers and beyond. Some of the following ideas might sound like a cliche, but I’ll add context to each to help you better understand and validate my points. Let’s begin!
The Single and Most Important Point: Solve a Problem
What a cliche right? I know but still, can you imagine the number of startups failing every single day because they don’t solve a problem? If they have a fancy and cool looking product or tool, it doesn’t mean the market will reward it or even needs it. And when I say reward I mean by becoming paying customers. Folks who open their wallets and enter their credit card details.
Take my money (Image source: Imgur)
How can you convince someone to pay for a service? Easy, find and solve their pain point.
OK, but what does that mean exactly? A pain point you solve helps them do one or more of the following things:
- Save money
- Save time
- Help them make money
If you found a solution for any of those above now you have a business idea! If you solve two of them you’ve got an ace in the deck. All three? You might have hit the jackpot.
I promised more context so here is an example. At Kinsta we provide managed WordPress hosting services. This is a premium solution with a lot of benefits.
1. We save our clients money. How? They don’t need to hire an expensive and skilled system administrator to manage their websites and servers. We take care of this for them.
2. We save our clients time. Lot’s of it! How? If they face any technical issues on their website they are just one click away from help. Within a minute, one of our support engineers will get in touch with them to take a look. They don’t need to Google the answer, go to Stack Overflow, or call a tech-savvy friend. We are available 24×7, 365 days a year.
Everyone who’s ever programmed something that was too complicated for them can relate to the feeling of being lost, very very frustrated, and hours can be wasted by trying everything in your knowledge to make that something work.
Customers also don’t have to update software versions, optimize servers for WordPress, make backups, block a DDoS attack, set up WordPress caching, or monitor the site for malware. We take care of all of this. The more sites they host with us the more time we save them. And this is something they are happy to pay for!
3. We help our clients make money. We work with a lot of web development, website maintenance (WP Buffs, SkyrocketWP), and design agencies. By outsourcing web hosting they can focus on their core business and are not distracted by these additional but necessary tasks like managing servers for their clients. We handle this part of their business and they can then take on new clients and projects. At the end of the month they are making more money. Not to mention if they take advantage of our affiliate program they can earn monthly recurring revenue!
So as you can see, we solve problems. Web hosting is a boring industry (at least from the user’s perspective) but we solve the problems most website owners are facing every single day. That is why they are willing to subscribe on a monthly basis.
This should be the goal of your business. To get people to pay for your service or product every month because it provides value. Monthly recurring revenue is the fundamental of all SaaS companies. MRR is one of my favorite words.
Differentiate Your Offering and Stand out from the Crowd, or Shut down the Business
Most businesses will remain in mediocrity. But being mediocre is not enough anymore, especially in 2019.
You want to grow your business, increase your recurring revenue, and get a piece of the pie, right? You already solve a problem with your product (or you should) and are hungry for new customers.
Those potential customers are out there you just have to find and convince them. How do you convince them if you are just another company doing the same thing as the competition? No one is interested in another small business CRM, photo editing software, or social sharing tool unless it provides something new or unique.
You have to be different and you have to make it clear that you are not just another Basecamp clone. Tell and show them how you stand out from the crowd and how your product can give them something they can’t get at their current provider.
Charging $10 less than the competition is not a differentiating factor you should aim for.
If a lower price is your best differentiator you should rethink your business. A race to the bottom is not a good tactic and rarely works. I will talk more about this later.
Many companies like to talk about numbers and facts, but in reality, these don’t really matter as much as you might think. Headlines and marketing buzzwords like:
We were the first and we created this billion dollar industry. That’s why you should work with us.
We work with the biggest brands.
Do people care about this? In some cases, yes, but you can only coast so long on this type of mentality. Don’t sell yourself with your past achievements.
We got tens of millions of dollars in funding, so we are the best to work with!
A bunch of money doesn’t equal good service. A lot of VC funded companies provide terrible service because they care only about growth and forget about serving the customers. Investors are really the ones making all the decisions behind the scenes.
We have a team of 500 people while the others in the industry have only a small team!
Never use this to convince leads. This makes you sound desperate and it has nothing to do with the quality of your service. Trust me, the vast majority of leads and customers don’t care about any of the things mentioned above. These aren’t the differentiators they’re looking for.
Differentiators (Image source: Imgflip)
What makes a real difference?
- Your technology stack.
- Your innovations and unique features that only you have.
- Your outstanding customer service.
- Your knowledge and expertise which makes you a leader in the industry.
- The adoption of new trends and product improvements based on customer feedback.
And of course, a combination of all of these.
Create Great Content
Another way to stand out is with your website copy. However, this isn’t always the easiest thing to do. In fact, in some cases, it can be one of the hardest depending on your skillset.
It doesn’t just take time but it almost always requires customer research on your part. On your website, you have to use your customer’s language. You might find it strange or think you have to use complicated terms and expressions, but believe me, the language of your customers is what converts best.
At Kinsta, we do not sell servers. We do not sell disk space in the cloud and we do not sell 99.9% uptime. So what do we do? We are selling an experience. Peace of mind that our team takes care of this complicated and boring thing called web hosting; even on Sundays or New Year’s Eve.
The good thing is that leads and customers can help you a lot with your website copy. They provide an infinite source of sales/technical questions. Here’s an example from our own business. On a daily basis, we were getting the same questions from leads:
How are you different, why should I choose you over X, what makes your service better and how will it solve my existing problem?
Because of that, we felt that it was the right time to put together some new landing pages!
We have a custom page telling you the most important things you should know about us. You can take a look at it here: Why us – how Kinsta is different.
How Kinsta is Different
And to make our leads’ life easier we create dedicated landing pages where we compare Kinsta to the competition. These are not 200 words, biased, or thin sales pages. If you take a look any of these you will get the idea. A lot of time and research went into each of them.
- Kinsta vs WPEngine
- Kinsta vs Flywheel
- Kinsta vs SiteGround
They are based on facts and data. No more no less. A comparison page like that helps potential leads to answer many of their pre-sales questions and it allows us to show what makes us unique and better compared to our competitors.
During the years we learned the importance of website copy and how it contributes to your overall success. If you aren’t comfortable writing copy don’t worry, there are a lot of amazing copywriter experts out there who can help you out with this. Every dollar you invest into it can easily have a 10x return!
Should You Care About Competition?
Competition is beneficial and necessary. It forces you to keep innovating, to think differently, and act smarter.
Of course, we won’t be best friends but we respect and learn from each other. A healthy industry encourages healthy rivalry which results in a higher rate of innovation. You should also learn to separate feelings from business. Hating on your competition is nothing but wasted energy and does nothing to help you accomplish your business goals.
Some say that you shouldn’t care about them at all, and focus only on your product, team, roadmap, and next feature. To not even acknowledge they exist.
I agree to some extent, that if you’re doing your job you shouldn’t obsess over your competition. It’s of course very important that you focus on pushing out the latest and highly requested features, grow your team, and continue to close lead after lead.
But you can’t live in a bubble. You will miss out on a lot of opportunities!
In 2018, three of our competitors announced that they were increasing prices. If my assumptions are correct, sooner than later, another one will do the same or announce another round of funding as their business model is not self-sustainable. And here’s what happened:
Until recently we have been happy using XXXXX as our preferred hosting partner and believe them to provide the best WordPress hosting. Unfortunately, in May of this year XXXXX notified us that they were increasing the cost of our servers by 400%. We were very disappointed to be faced with this as we have been very happy with the XXXXX service, but unfortunately we were no longer fit for XXXXX’s business model.
Faced with an unacceptable price hike and change in account management approach from XXXXX, we felt we had no option but to look for an alternative host to provide a viable solution for our clients.
Don’t get me wrong, I absolutely support higher prices. But if you ask 400% more for the same service and you punish your loyal customers, guess what? They won’t stay loyal anymore. That is one of the biggest drawbacks of taking any outside investment. If you don’t own your own business one day you’ll probably notice you’re just following orders and you have to do what your investors are telling you.
If it’s a 400% price increase which destroys your years of hard work building a reputation, what can you do? I guess you can toss it up to nothing but following orders.
The first leads started coming on the same day our competitor sent out their price hike announcement email. These submissions were plain and simple:
Hey XXXXX will be 4x my typical monthly hosting bill while providing less, as they removed basic features. I want to switch now, please help!
We quickly realized this was not a joke and the influx of new customers began.
New customers (Image source: Imgur)
How can you take advantage of this and target these users ready to switch? You can:
- Create new landing pages.
- Update and optimize your website copy.
- Start new ad campaigns on Twitter, Facebook, LinkedIn, and target these customers.
- Check social media (mainly Twitter) conversations and jump in if they’re asking for a solution. Here are a few Twitter marketing strategies to beef up your social game.
You have to keep your eyes open and take advantage of all the opportunities. That’s the good part.
But sometimes you just scratch your head when it comes to the competition.
In November 2017, we launched our new brand and redesigned website. Months of hard work and research went into it. We hired a team of talented guys to manage and complete this project. The feedback we received from our customers and from random people on Twitter or on Dribbble was simply awesome.
Eight months later, what you do you know… Cloudways (sorry guys, no link), another company in the industry basically copied our whole website verbatim. They even sent us a message and asked for our feedback regarding what we thought about it. I’m not even kidding.
I know that our design is not 100% unique but copying someone else’s design in the same industry is not the best move.
On the left is Kinsta (November 2017), on the right is Cloudways (June 2018). You can’t miss the similarity. But it’s fine, no problem. It’s better to lead, not follow.
Kinsta vs Cloudways
In another example, our main competitor created a comparison page where they theoretically reviewed our and their offerings. But they did the opposite.
It turns out that they forgot to check their facts and ended up with a page that contains more misinformation and outright false statements than truth. Example: “Average days to go live on our platform is 24 days” which in reality would be a couple of minutes.
I reached out to them but they never got back to me.
Really? (Image source: Pinterest)
I guess someone from the top gave the order to their marketing department to create this page and instead of comparing things that truly matter, they discredited us in all ways possible. I’m not surprised. Their entire marketing is based on gimmicks and their sales agents are incredibly creative when they have to answer the question of why someone should choose them over us. But people are not stupid and they can smell a lie from a mile away. Nevermind, these guys deserve a cookie.
Am I angry or upset? Absolutely not. This is a good sign and actually, it’s impressive that they dedicate so much attention to us.
While keeping your eyes open is important, it’s better to focus on your own company and customers. In the long run, this strategy pays off. Don’t watch your competition’s every move like a hawk. Keep your eyes on them, but don’t be obsessed with it.
Raise Your Prices, Scaling a $1 Service Is Hard
Developing and supporting a good product, along with hiring talented people requires money. Lots of it. As I mentioned earlier, charging less for your service is not the best long-term strategy. You should charge what you’re worth.
Do you want to go into a price war? Sounds like fun and a sustainable move. Let me show you what this looks like:
You will then find yourself in the following position pretty quickly. Spoiler alert: almost everyone dies at the end. Some faster than others.
You’ll wish you never started the war. A race to the bottom and going into a price war is a dumb idea. Unless you’re Amazon or Google, you should avoid that at all cost.
Don’t forget you’re running a business and you don’t have a fortune in your bank account. You have to find a sustainable business model and need a steady flow of cash. You need cash to:
- Pay salaries
- Pay infrastructure bills
- Spend on marketing (PPC, content)
- Hire new team members
- Invest back into your business in every way that you can
Instead of lowering your price to beat the cheapest product on the market, find ways you can charge more for your service.
Don’t worry if some companies on the market are charging $9.95/mo but you want to do the same for $25/month (the amount you need to sustain the business). Believe me, a higher price is not a dealbreaker for serious customers. Actually, it can be a good sign, as they are tired of cheap offers where they get the bare minimum for their money. They will be happy to spend more if you can justify the value you provide with the higher price.
The web hosting industry is famous for its $0.99 and $3.99 offerings. You get a small piece of a big shared server where your site is housed among 2,500+ other customers and you hope for the best.
I don’t blame them. For such a small amount, they can’t give you a higher level of service. You can try to ask for help, but nobody will reply to your support ticket. If for some reason they get back to you days or weeks later, the answer is usually “sorry, the issue is not on our end.”
You always get what you pay for. It’s simply impossible to provide you with a good server environment, maintain the performance of the sites, and provide high-quality customer service if clients pay just a few dollars a month.
What happens if you aren’t satisfied? They don’t care because they don’t have time to care about your case. You’re just a number. If you move away, they will simply replace you with another $3.99 customer and do this over and over again. Learn more about the truth of the web hosting industry.
So what did we do at Kinsta? We chose not to become just another cheap hosting company providing low-quality services for a few dollars per month. There are already thousands of companies doing that. Instead, we went with a minimum price of $30/mo. It sounds expensive if you compare it to a $3.95 Hostgator plan right? At first glance, yes. But if you take a second look (and if you ever dealt with Hostgator or any EIG owned web host) you will quickly realize that it’s well worth the money.
Why? Here are just a few reasons:
- You get crazy fast load times.
- Professional support from WordPress experts just a click away.
- Features you need to manage and maintain your site.
- You can rest at ease, knowing your site is in good hands at all times.
If your business relies on an online presence and your income depends on your website, you’ll be happy to pay this extra amount each month. And if you do the math, it’s really like two cups of Starbucks coffee.
I know what I’m talking about. Thanks to all of the low-quality providers, customers are aware of our added value and we are growing faster than ever. Check out our 2018 year in review.
It’s a lot easier to bring in 1,000 customers at $30 than 10,000 at $2.99. It’s better for your business and for your health.
Make Customer Support Your Top Priority
At Kinsta, we use a lot of SaaS products to grow our business. We wrote a blog post about it. However, it’s a bit outdated as the number of these services has now grown to more than 40.
Many of these businesses provide excellent customer service. They reply to our questions within hours and they are always helpful.
But some businesses aren’t great when it comes to customer service. For some, it takes 5-7 days to get back to you and usually, the answer is not very helpful. Just a few sentences and a link to their knowledge base which doesn’t answer the original question. These types of interactions create a bad impression, especially considering how much we pay them on a monthly basis (hundreds or thousands of dollars).
Before we started Kinsta we worked with a lot of other web hosts. Every time we had to deal with customer support the experience was simply terrible. They were slow, agents lacked the proper technical knowledge, and we couldn’t find any sign of them being proactive.
The sad thing is that this mentality is especially true for the web hosting industry. We decided not to jump on the bandwagon and made customer support our top priority. And it paid off, because thanks to this strategy, our customers spread the word about us everywhere. We provide them with something they’ve never experienced before in the web hosting industry.
I could keep going on forever, as they are never-ending. You can read more reviews about our customer support here, here, or basically anywhere on the internet.
And your next question probably is “What do you guys do to make sure customer service doesn’t suck?”
First of all, excellent customer support is not cheap. Remember what I suggested just a few lines above. Yep, raise your prices. Everything is connected. If you want to have a team made up of real experts, you need the money to pay higher salaries.
When you have a product that requires technical knowledge and expertise (such as ours), you can’t just go asking your Mom or girlfriend to help you solve support tickets.
At Kinsta, we always have a few open support engineer positions. We are always looking for new talent and the next team member who can deliver unparalleled customer service.
Here’s a quick summary of our hiring process:
Whenever we are about to hire a new team member, we always craft a very detailed job description, post it to several portals, online groups, and forums. We then wait to receive 50, 100, or even more applications. Make sure you have a big pool of candidates because that’s how you’ll find your next dream employee.
After that, we start narrowing down the list to the top five or 10 candidates. We have multiple rounds of job interviews, usually two or three. Thanks to this we are able to narrow down our list to the top three candidates and make the final decision.
Hiring customer support (Image source: Giphy)
One year later we are still following this method and we have more talented people on board than ever. All of them are skilled WordPress users and developers and thanks to this we don’t have Level 1 or Level 2 support like our competitors. There is no forwarding your case to the next level. Every Kinsta client gets to chat with the same team members that support our large enterprise and Fortune 500 companies.
Customer Support Is Probably More Important Than You Think
Many founders think that customer support is not the most important part of the business and average performance should be enough. I think they are making a huge mistake. People pay for your products or services with their hard earned money. They want to trust your business and expect excellent customer service in return. It’s much easier and significantly cheaper to keep clients than it is to acquire new ones.
There is another way to also help customers. Creating an extensive knowledge base can significantly reduce the number of support requests, as users will be able to find answers and solutions on their own. Educating your customers is important. At the time of writing this, the Kinsta knowledge base contains 234 tutorials and we add new ones on a weekly basis.
Customer support is most likely the area where your competitors don’t perform as well and or pay enough attention. This provides an excellent opportunity where you can beat them. Or as we discussed earlier, it can be a very important differentiator.
Our infrastructure is powered by Google Cloud Platform. The platform is scalable and we have the fastest load times in the industry. We also provide a lot of tools for developers. But I can tell you that customer support is the most important part of Kinsta, and this drives more business each month then everything else combined.
Sometimes You Have to Fire Clients, Yes, You Read That Right
You might find this ironic that after I just told you to make customer support the core of your business, now I’m suggesting you fire your clients. And yes, I just said that. But here’s what I mean.
Without any bias, I can tell you that we are one of the most customer-focused companies on the market. We have seen this first-hand from the feedback we receive from customers and their developers. We also get a lot of feedback from returning customers who decided to switch to a cheaper alternative but come back a few weeks or months later as they realize that saving a few dollars actually cost them more.
In business, you have to be flexible and be ready to solve any type of problem that comes up. When our clients need help we are always available to:
- Solve the problem if it’s on our end.
- Make a recommendation or suggest a solution.
Websites can become complex and server setups can also experience a lot of issues. If something has to be fixed on our end we’ll do it. But in many cases, that particular issue is out of our control and is something the customer will need to sort out. For this, we wrote a scope of support document which tells clients to whom the responsibility belongs.
Clients often have to hire a developer as we don’t write or edit their code. We suggest to them a few skilled guys we work with and trust and clients are happy that they don’t have to find someone they’ve never worked with.
If you’ve worked with clients before, you know that a few have a hard time accepting that something is beyond the scope of what we can help with. Unfortunately, these types of situations put pressure on your team and that’s not good. However, we do our best to stick to our published scope of support; deviating from it sets a bad precedent and just causes more headaches in the future.
If you’re dealing with clients, I highly recommend creating a document that outlines the scope of your services and then make sure that your team follows those guidelines. If you don’t, a small percentage of clients will spot this weakness and it only takes that small percentage to turn customer support into an unsustainable part of your business.
Over the years we’ve had a few interesting cases where a customers’ wishes simply could not be brought into alignment with what we are able to offer and support. In these cases, the best thing to do is to fire the customer as kindly, diplomatically, and quickly as possible.
What do you do? You let them know that it would be best to find another provider and stop using your service as you can’t fulfill their requirements. You can remain polite, professional, and wish them good luck on their future projects.
Over the years we’ve had to fire several customers. But the good news is that they represent ~0.1% of our customer base. And you know what? This works. You can and you have to fire bad clients to be able to support the other 99.9%.
This is an important thing you can and must do to grow your business and keep your team happy. Don’t be afraid to say no. You don’t need “toxic” dollars. There is no such world in which you can please everyone.
Being First Doesn’t Guarantee a Lifelong Advantage
Running a business is not a sprint, it’s a marathon. The first one doesn’t often win the race.
Of course, now you are asking me what do I mean when I say win? You can still be successful and feel like a winner if your business survived the first 10 years. It’s also a win if you serve a lot of customers and your annual recurring revenue is 7 or 8 figures.
It’s a marathon (Image source: smashbytraining)
There were at least seven search engines before Google even existed. Do you remember AltaVista or Dogpile? Not really. But despite not being first, Google is still here, dominating huge parts of the internet and they are valued at over $739 billion.
Was Facebook the first social media site? Of course not. Friendster was launched in 2002 and MySpace already existed in 2003. Do they still exist? Nope. All of them could have been “Facebook” but for various reasons, they failed while Facebook is still alive. In 2017 they had a 40.7 billion in revenue.
So as you can see, being first on the market doesn’t guarantee success, and not being first doesn’t mean you can’t succeed.
Everything depends on your attitude, your team, and your willingness to achieve your desired goal.
Many of the first companies in the web hosting industry are still around. Some became giants, while others are also successful and have a large (not sure if growing) user base. Many of them show the signs of being a dinosaur company. These companies fail to innovate, fail to keep up with the new trends, and they fail to serve their customers as they should or used to be.
I’m not saying they aren’t improving or innovating at all. They just aren’t doing it fast enough, and others, usually smaller players are way ahead of them despite having fewer resources. Of course, I’m aware that making changes at big corporations takes way more time. But this is more about the willingness for innovation and constant improvement of the business.
Kinsta wasn’t the first managed WordPress host on the market. Around 2014, a few other companies also launched a managed hosting service and many of these are now struggling or aren’t even around anymore. Thanks to our talented team, we have caught up really fast and I can say that we are going head to head with the big players in the industry.
Many competitors also gave up when it comes to innovation and they fail to keep up with the growing customer needs. On the surface, they look good but the reality is different and the future for them is not bright. I think these companies have three options:
- Change their attitude and get back on track. But why would they do this now, they’ve had years to do it.
- Get acquired by someone and then no one will remember they existed.
- Slowly go out of business. This is what will most likely happen.
What I wanted to say is that you shouldn’t be afraid if the market is saturated and you think your business won’t be able to get traction amongst all the noise. With a clear strategy and consistency, you can go fish for sharks!
General Saas Metrics Are Great but Don’t Take Them Too Seriously (Take with a Grain of Salt)
Running a SaaS company or any kind of business is about data. You need proper data about your revenue, spending, growth rate, churn rate, and so on. You are making business decisions every single day and many of these should be based on data. Decisions like hiring new team members, spending more on marketing, or giving a raise are all things that shouldn’t be done without some research.
The most important business metrics that all founders probably are aware of are the MRR, ARR, number of paying customers, and active users. Thankfully we can use free or premium tools to easily track these metrics and take a look at these charts whenever we want.
Annual run rate from Baremetrics
My personal opinion though is that sometimes we can get too obsessed by these numbers and could feel bad without a good reason. However, the reverse could also be true. They can mislead you into a false sense of security.
Investors, serial entrepreneurs, and SaaS business experts like to mention these growth metrics. Sometimes they call them healthy SaaS metrics or growth numbers that your business should produce. I know many of them are based on data and research or personal experience while they were investing in different companies or acquiring them.
But every single company and business model is different. One metric might be easily achieved with a freemium based model while even 1/3 of the same numbers is hard for another company operating on a totally different market. Metrics like:
- Your monthly revenue growth should be 10%.
- 20% of monthly revenue should be coming from annual signups.
- A weekly active users growth rate of 8%.
- Net promoter score 9 or higher.
- Expansion revenue every month 30% of new MRR
Should you feel bad that your MMR growth is only 5% or your revenue expansion is not that high but your churn is less than 2%? Should you feel bad that your monthly active user’s growth is only 10%? Or last year you were able to achieve 100% ARR growth while others are reporting 250% or higher growth? I don’t think so.
Others might have taken VC money and spent way more to attract new customers while not caring about customer acquisition cost (CAC) or churn, but you were focusing on profitability instead of growth at all cost.
Every single market and company is different and most of the time it’s not an apples to apples comparison. Take these “health business growth metrics” with a grain of salt and don’t feel bad if your growth is only linear.
Bonus Lesson: Forget Growth Hacks, Quick Wins, and Overnight Success
Becoming successful quickly and getting rich fast is the dream right? We all want to drive a Lambo and enjoy the four hour work week!
Sorry guys I’m always realistic and have to disappoint you. I’m only 31. I’m not a business expert or any kind of guru but since age 12, I was always doing something to make some money. But whatever I did I’ve had to work hard to see results. In the last 5-7 years (especially during the years at Kinsta), I was able to connect with a lot of entrepreneurs and self-made businessman and you know what? I’ve never seen an overnight success. These guys are working hard every day of the year to take their business to the next level.
Growth hacking has become a popular buzzword in the last few years and the pursuit of growth hacks is just crazy. Who could ignore a growth hack which would double SEO traffic? Or a growth hack to 3x MRR in the next 4 months? Or 10x the user base with a single tactic? It would be awesome. Everyone could be an overnight millionaire!
Growth hacking is not a myth. It works great at Kinsta but we’d rather call it consistency.
We’ve been publishing two or three 3000+ word posts a week in the last 2 years. We are promoting them all ways possible. We are pushing out new features all the time, looking for new partnerships, and reaching out to new affiliates, who can help us to spread the word.
This is our ARR growth:
Kinsta ARR growth
This is our client growth rate:
Client growth rate
This is our website traffic growth:
Website traffic growth
Building a business takes three, five, or even 10 years. There are smart techniques and small/quick wins which help to speed it up, but we are still talking about years. Never pay for an ebook, course, or consultant, where they will show you how to achieve this stage 5x faster. All they want is your money.
The real growth hack is if you can hack yourself and not giving up after a few months or years. Consistency, strategy, and patience are the keys to success.
All right, folks, I think that’s it for now. While I could have added a few more things (I’ll leave them for another post), I think I touched on the most important topics I wanted to discuss. All of these above helped Kinsta to get off the ground and create a name for itself in the industry. We have a lot of ideas on how we will take the company to the next level in the upcoming years. If you want, I would be happy to share our journey, as well as ups and downs.
And some shameless self-promotion, if you have a WordPress site and you are looking for a new host please consider Kinsta. Don’t be afraid to give us a try as we have a 30-money-back guarantee with no long-term contracts.
I’d love to hear your bootstrapping story, lessons learned, successes, and failures. Please use the comment section below! Also feel free to connect with me on Twitter @tomzur.
The post Growing a SaaS Company – How We Reached the Magical First 1,000 Customers appeared first on Kinsta Managed WordPress Hosting.