SaaS is one of the industries with the fastest growth rate in history. Its market size has more than doubled since 2014 and that growth won’t stop any time soon.
Companies use an average 137 SaaS solutions. The SaaS industry reports and statistics point to the same thing: it’s a flourishing industry, with an added boost from the 2020 pandemic when companies needed even more tech solutions.
It looks like the perfect industry to be in right now. Except for one thing: SaaS founders complain that the competition grows at an even faster pace than the industry itself, while cost to acquire a new customer skyrocketed. I’ve spent the past few years helping SaaS founders accelerate their growth and wanted to share an overlooked (not for long) way to fuel your SaaS growth.
That’s building a community.
I’m not talking about a Facebook business page. I’m talking about an active, engaged community — a true asset that sparks sustainable growth.
Whenever I talk about building a community to a SaaS founder, I am met with the same objection: it’s too hard to get hundreds of thousands of members. I love to disprove this one.
Sure, Shopify has a community of 800K members (at press time). This community is one of the biggest draws of Shopify: potential subscribers know that they can get quick answers to their questions.
But Shopify didn’t get to 800K members overnight and you shouldn’t expect this either. Plus, you don’t really need it in the beginning. A small community of 20-30 engaged users is an excellent place to start.
My upcoming book, Community-Led Growth: How to Skyrocket Your Startup by Building a Community, is a roadmap for building SaaS communities that help grow sustainably with a minimal marketing investment. This article is a book “prequel” if you will that outlines the reasons why SaaS founders should focus on community building.
If you think that this is not the right strategy for you or if you feel like building a community takes too long and yields too little in return, keep reading. After more than 10 years growing companies, I am happy to bust some myths surrounding community-led growth.
Let’s dig in.
Benefits of Building an Online Community for Your SaaS Company
Take Your Customer Service to a Whole New Level
Your customers expect fast, almost instantaneous answers. And they expect them on any channel — phone, email, social media, forums, and more.
The omnichannel experience is extremely important for a SaaS brand and online communities can help you make it seamless. Your customer support reps can jump in to answer questions that will benefit not just the original poster, but the entire community. This way, customer support is more efficient, the subscribers are happier, and your reps have a lot fewer queries on their plate.
This brings us to the next point:
Peer Help Boosts Satisfaction and Cuts Support Costs
A solid online community centered around your brand becomes the first place subscribers or potential customers go to in order to ask their questions. Even if you have (and you should!) have a dedicated support rep for this community, the other subscribers will often jump in to answer.
People love to share their expertise online. So they will do so whenever they can help a peer fix an issue or leverage your SaaS solution better. Oftentimes, they will even do a better job at it than your support agents because they have overcome the same issue.
Brand Ambassadors at Your Fingertips
When someone is an active member of a SaaS-centric community they inherently start identifying themselves with that brand. They believe in it. They root for its growth much like a stockbroker roots for its latest investment.
Your customers are invested in your brand and they are not only happy to share their expertise with their peers in an online community.
They are also happy to be your brand evangelists. To let others know about the benefits of subscribing to your SaaS. This is psychology 101: everyone wants to be praised for their decision and they are ready to support it no matter what.
Just take a look at online reviews for restaurants. “Best restaurant in Manhattan” or “best steak in town” are common phrases you see in these reviews. Does this mean that the author tried all the restaurants in Manhattan or all the steaks in town before passing their final judgement?
Not at all! It just means that they are very excited about the place they visited and they want to make it clear that their seal of approval weighs heavily. The same goes for SaaS solutions: die-hard fans are everywhere and the environment where they grow and thrive is the online community.
Fueled by their peers’ energy, online community members are likely to create a ripple effect: they talk about your SaaS outside the community. This brings new members into the community. In turn, the last members will do the same and so on.
Bottom line: yes, you can pay for influencer articles to gain brand awareness. But nothing beats the efficiency and the passion of home-grown brand evangelists.
Online Communities Decrease Churn
Acquiring a new customer costs five times more than retaining an existing one. Online communities boost retention rates and keep existing subscribers happy.
An engaged community member, the kind who takes the time to answer their peers’ questions, is more invested in your brand than a subscriber who simply pays a monthly fee. They will have a harder time leaving your SaaS for a competitor.
Plus, if they ever think about leaving, you might hear about it within the community just in time to take action to retain them and other subscribers who think about jumping ship. Speaking of which:
Online Communities Are Excellent Social Listening Tools
Want to know what can be improved in your SaaS? What are its strong and weak points? How to boost customer satisfaction levels? How do you compare with your competitors (in the eyes of the subscribers)?
Online communities help answer all these questions and more. You no longer have to create polls on third-party apps and send them via email hoping that at least 5% of your subscribers would answer.
You can do this directly within the community platform.
Online communities help build better SaaS products. Simply taking a look at what your subscribers say they wish they could do with your solution will give you a plethora of ideas you can implement in your next big release.
You Can Use Online Communities for Quick and Painless Upsells
Do you know who’s more likely to buy from you? An existing customer!
You have a 70% chance of selling to someone who already bought from you. By comparison, the chance of selling to a new customer is 5-20%.
Thus, upselling and cross-selling are much easier than getting a new customer (and much cheaper — see above). Online communities can make this even easier.
This scenario is extremely prevalent in all the communities built by my SaaS customers: one community member talks about a certain feature in their plan. It doesn’t matter if they love it or if they wish it could be better.
Other members realize they haven’t seen this in their dashboard. Why? As they’ll soon find out, it’s because they are on a lower plan. You don’t even need to swoop in and convince them about the merits of a more expensive plan. The community will do that for you.
Better yet, when you launch new features that are only available on the higher tier plans, you will, undoubtedly, start by promoting them to your community. This is an excellent opportunity to see plan upgrades spike!
Getting Social Proof Becomes a Breeze
91% of millennials trust online reviews as much as they trust recommendations from friends and family. However, getting your subscribers to write reviews isn’t always easy.
Unless you have an online community, of course.
Within a dedicated community, you can easily turn this into a fun game. Ask people to record video testimonials and three of them will receive some kind of a bonus.
Just because you do it on a public forum and because you do it when they are absolutely delighted by what you offer, they are more likely to say yes. In turn, you are more likely to attract brand-new customers with ZERO marketing investment.
Wrapping Things Up
Online communities aren’t a novelty. They have been around for almost as long as the internet has.
What’s relatively new is brands’ ability to build their own communities. In other words: instead of chiming in when someone mentions your brand on Facebook, you can be the conversation starter.
If you build a value-added community, where members get something in return (from exclusive content to a sense of belonging and peer help), you will be able to grow your SaaS exponentially.
Not sure how to build this kind of community on a bootstrapped budget? I got you covered! My upcoming book will reveal all the steps you need to take to turn your online community into a SaaS brand grower. Join me on Publishizer to contribute to its publication and learn when it will be live!