A Practical Guide to Growth Strategy for SaaS Companies
by Philip Feldmann, Managing Director
1. Start with Retention, Not Acquisition
Most SaaS companies default to pouring resources into acquisition when growth slows. But the math is clear: improving retention by even a few percentage points has a larger impact on long-term revenue than doubling your acquisition spend.
Before investing in new channels, audit your activation flow. How many users who sign up actually reach the moment where your product delivers value? If that number is below 40%, your acquisition spend is being wasted — not because the leads are bad, but because the onboarding is not converting them into engaged users.
2. Build Acquisition Channels That Compound
Paid acquisition is linear — you spend money, you get users, you stop spending, the users stop coming. The most resilient SaaS businesses build at least one acquisition channel that compounds over time: content that ranks in search, integrations that drive referrals, or a product experience that generates word of mouth.
These channels take longer to build but create a durable competitive advantage. The best growth strategies combine short-term paid channels for immediate results with long-term compounding channels for sustainable growth.
3. Monetization Is a Growth Lever
Pricing is not a one-time decision — it is a growth strategy. Most SaaS companies undercharge, and the ones that revisit their pricing model regularly grow faster than those that set it and forget it.
Expansion revenue — getting existing customers to pay more over time through usage-based pricing, plan upgrades, or add-on features — is the most efficient growth lever available. A healthy SaaS business should generate 20-30% of new revenue from existing customers through expansion alone.
