The SaaS industry is expected to grow by 15-20% annually in the coming years (Gartner) – a growth curve which few industries can match. The industry has quickly become a favorite for both startups and venture capitalists, largely due to its scalable business model and often global market.
What can media companies learn from how SaaS companies drive growth? Here are five quick thoughts:
1. Focus on KPIs that drive continuous growth. SaaS companies are experts in tracking the right metrics, with MRR, ARR, ARPU, LTV and CAC being some of the favorites. All of these testify to a well-developed “recurring thinking” – the whole business is a continuous cycle (revenue, costs, customer value). Many media companies still look at “revenue during the month”, “circulation” or see their customers as one-time transactions.
2. Obsession with automation. SaaS companies build well-functioning and automated funnels for marketing, conversion, onboarding and engagement. Everything is automatic, and is continuously tested and optimized to drive growth. Many media companies still focus mainly on one-off campaigns, and have not yet automated their digital customer journey enough.
3. One (1) holistic experience. Surely it sometimes feels like many media companies have picked up their customer journey from puzzle pieces that do not really fit together? Different platforms, environments and experiences often await the customer through their customer journey. SaaS companies are good at building a cohesive journey from A to Z.
4. Global platforms and delivery models. Many SaaS companies use global platforms to run their business, as well as source expertise and resources from the global talent market. With the right management, this creates cost efficiency and the right resources to grow. Media companies often use local platforms and talents (partly due to language), which can limit the options for growth.
5. The user pays and it is the product that drives value. SaaS companies focus on continuously solving problems for the users, so that they want to continue paying. Very few SaaS companies work with alternative revenue streams such as e-commerce, affiliate or advertising. It creates a laser focus on always developing the product to increase the value of the end customer.