How shifting to a team use case boosts LTV and ROI

Ramon Snir
Ramon Snir
March 3, 2023
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Every software-as-a-service (SaaS) company strives for rapid, steady adoption to fuel its revenue and growth strategies. One of the most fundamental ways to accomplish this is to focus on increasing team, departmental, or company-wide usage instead of only capturing single-use customers. Prioritizing product-led growth strategies that have this bigger-picture goal propels the product’s value proposition, increases return on investment for the customer, and increases long-term retention.

An increasingly competitive environment

Since Salesforce released the first SaaS product just before the turn of the millennia, the industry has grown exponentially. According to Exploding Topics, about 30,000 SaaS companies are serving roughly 14 billion customers around the world as of 2023. Industry experts predict the market to reach a valuation of $307 billion by 2026.

The good news is that businesses and professionals in any industry now have a wealth of solutions to choose from to make daily tasks and workflows easier. The bad news is that individual SaaS providers have even more noise to break through to get their products noticed, implemented, and adopted.

Envision the end goal …

Every SaaS company must ultimately be trying to solve a team, department, or company-wide problem to achieve long-term viability. Too many resources are required to obtain and sustain only single-point adoption in today’s market. Businesses must envision the ultimate larger problem that must be solved first and design and improve their SaaS product with that as the end goal. A single use case then becomes the seed that is sowed with company-wide adoption as the mature redwood, strongly rooted with a long lifecycle.

While keeping the goal in mind is one of the fundamental rules of any successful endeavor, it’s interestingly one that is still frequently forgotten in light of exciting new technological capabilities. Businesses that have kept their proverbial eyes on their goals have reaped the most success. For example, Slack was originally developed to improve communication during an online game, and those who invested in its acquisition and development could envision faster, more efficient company-wide communication as an end goal. Calendly grew out of one salesperson’s frustration with scheduling sales calls and pursued a vision of broad scheduling efficiencies that could be gained in the entire business world.

… as the foundation of a successful product-led growth strategy

When businesses have that problem-solving, company-wide goal in mind, it’s much easier to succeed with a product-led growth strategy. According to Gartner, “by 2025, 75 percent of SaaS providers will apply product-led growth techniques to drive existing customer growth and expansion.

The idea of using the product itself as the primary means of marketing and selling a new product will only be successful on a broad scale if that product can drive organization-wide improvement. It’s the corporate equivalent of personal referrals; instead of one person recommending a product or service after a great experience, a professional drives the use of a SaaS product to not only improve a colleague’s experience but to improve an overall workflow that further benefits both parties.

For example, Figma doesn’t just help individual designers by providing better tools, ideas, and resources. Instead, it connects an entire team of professionals who work together, improving collaboration, making faster, better decisions. Figma users get more done, together. This has a substantial impact on the ROI of the software to the decision-makers. 

Emmet and teammates displaying successful collaboration
multiplying the network effect, your product can bring teams together

Focus on network effects within each single adoption

According to Harvard Business Review, it can be five to 25 times more expensive to acquire a new customer than to retain an existing one. That’s why the single-user adoption must be only the first step, the foot in the door. Once an individual user problem is solved, SaaS companies must rapidly focus on multiplying the network effects to that individual’s team, department, overall company, or even industry. When that individual sings the praises of a SaaS product, it must not only solve problems for colleagues but must impact the overall workflow. One plus one must equal three.

The challenging aspects of doing this successfully revolve around the fact that workflows, collaboration, approvals and feedback can be messy and time-consuming. Add corporate policies regarding security, data access, audit requirements, and government regulations in certain industries and achieving company-wide or even team-wide adoption can be difficult.

A sticky situation - engagement is key to success 

Business-to-business SaaS companies that can successfully make the transition from single-use adoption to team, department, or company-wide usage will naturally propel the value of their products, increase ROI for their customers as more employees experience the benefits, and achieve the stickiness for long-term retention and growth.

Perhaps one of the largest challenges of today’s SaaS organizations embracing a product-led growth strategy, this transition may be the differentiator between those companies that eventually go by the wayside and those that become the foundation of the future.

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