5 Examples of User Growth for SaaS Products

This compiled article mainly introduces the low-cost growth method of SaaS products that are quick to use and quick to register. It is not applicable to SaaS products with long product preparation processes and long business processes. The profit model of these SaaS products that are used and removed quickly is low average order value * customer retention base. The growth method introduced in the article is a way to force customers to leave.

Think about the first time someone sent you a Zoom link.

Once the meeting is over, you'll be directed to sign up for a Zoom account so you can start scheduling your own meetings.

The people you invited to those meetings were introduced to Zoom — and then, like you, they signed up and started scheduling meetings of their own.

We saw them go from an average of 10 million meeting participants per day to over 200 million meeting participants per day. Zoom is a household name.

Zoom is one of the five examples of viral products I show you in this post. You’ll see how these companies built virality into their marketing strategies (and their products) and used it to drive growth.

What makes a SaaS product go viral?

A truly viral product is not designed for a single user. Instead, it is designed for two or more people to use it simultaneously.

Just like Zoom.

The video conferencing tool is viral in nature because it allows up to 100 participants to meet, share, learn, and stay connected.

It also allows people to experience the product before deciding to sign up. So, it’s more of a “show, don’t just tell” situation.

Often, virality is fueled by customer emotion (in this case, excitement). Users are excited about the product’s effects, so they recommend it on their social networks.

To understand how virality works, let’s look at five examples of viral products from some of the biggest brands.

Calendly

Calendly is a great example of a truly viral product.

Calendly founder Tope Awotona struggled to book sales meetings while working at IBM and decided to build a product to solve the back-and-forth of meeting scheduling.

Together with his team, he adopted a product-led growth strategy, building virality into the concept of conference scheduling. They built a great product that was targeted at regular people — not just business or salespeople.

Although this meeting scheduling tool was not the first, it has created 4 million users and earned $30 million in ARR.

One factor that made Calendly go viral was its collaborative nature. One person cannot use the product alone — it requires two people (the inviter and the invitee), just like a typical one-on-one meeting.

Every time someone sends a Calendly invite, they are using and promoting the product, which creates a viral loop. Through this viral loop, Calendly acquired new users without any additional effort.

Let's see this effect with an example:

A single user, Margaret, sent a Calendly invite to her business partner, Aaron, who had never heard of the product.

Aaron accepted her invitation to experience the product firsthand. He saw how meetings could be scheduled without stress by completely eliminating the pesky back-and-forth between people.

If he likes the product, he’ll sign up and start using it to schedule meetings, perhaps with people in his network — some of whom may have never heard of the product before.

People in Aaron’s network may also decide to sign up, further continuing Calendly’s viral value loop and driving Calendly’s growth even further.

No wonder Calendly has grown to 4 million users and $30 million in ARR in less than 10 years.

Slack

Slack is a micro social tool for teams within an organization. With 12 million daily active users, Slack simplifies communication within organizations.

Instead of endless meetings, lengthy emails, and long phone calls, communication between team members (and within an organization) can be done through a single channel: Slack!

Some business tools, such as Google Drive, Salesforce, Trello, etc. are well integrated into Slack, making cross-platform collaboration easier.

Every step of this process has helped Slack’s annual reported revenue increase from $12 million in 2014 to $630 million in 2020.

Much of Slack’s initial growth was a product of word-of-mouth, and that remains their top priority.

By launching a beta product in 2013, Slack gained awareness and received valuable feedback, which helped them iron out existing issues before the official launch.

By 2014, testimonials from high-profile organizations like Medium solidified their credibility, and more and more organizations adopted Slack as their primary communication tool.

In addition to the virality built into the product (because communications naturally involve two or more people), Slack also has powerful network effects.

The more people in an organization sign up and experience a product, the more likely others in the organization are to sign up.

Let’s look at Slack in action with an example.

Let’s say Julie, the head of marketing, downloads Slack and asks the rest of her team to do the same so they can work on projects together. With each new user onboarded, Julie can collaborate more effectively with her team and track their online activity within the organization.

They can easily share files and collaborate with each other on the platform by using third-party applications such as Google Drive and Trello.

For example, one person in an organization may recommend a product to people from other organizations.

If that person signs up and likes the experience, they can use Slack as the primary communication channel for all teams within their organization.

As a result, Slack doesn’t have to do anything to acquire many new users but to maintain visibility and value of the product.

Zoom

Zoom has become popular all over the world. This cloud-based video conferencing tool helps businesses, schools, churches, friends, and families stay connected.

How did Zoom rapidly grow from an average of 10 million meeting participants per day to over 200 million meeting participants per day (both free and paid) in just three months (December 2019 to March 2020)?

Zoom uses a freemium model, which allows potential customers to use Zoom (with limited but amazing features) until they are ready to upgrade.

The free version of Zoom allows up to 100 participants, with a 40-minute time limit for group meetings of three to 100 participants. New users do not need to register or log in to join a meeting unless the user is the host.

Zoom also capitalized on the viral loop that occurs when existing product users send meeting invites to non-users. Non-users start experiencing the product the moment they click on the invitation link.

So, the next time these non-users want to host a virtual meeting (depending on how their experience turns out), Zoom will surely be their platform of choice.

As of April 2020, Zoom had 300 million daily Zoom meeting participants, a 30-fold increase in four months. Total revenue for the first quarter of 2020 was $328.2 million, up 169% year-over-year.

SurveyMonkey

SurveyMonkey is one of the oldest SaaS companies (21 years old) and is an industry leader and authority in web-based surveys. The brand adopted a product-driven strategy, embedding virality into the product.

Let's see this effect with an example:

Tasha runs a fashion startup.

To better understand her customers’ needs, she turned to SurveyMonkey to create a survey and generate a link so people could participate.

She prepares the survey, enters the appropriate email, and clicks the Send button to forward the survey link to everyone on her mailing list.

Some of them may have heard of or used Survey Monkey before, while others may not be familiar with it. When they open the survey and see that it is “Powered by SurveyMonkey,” they are first exposed to the company.

After taking the survey, they may become users of SurveyMonkey and use it to create their own surveys.

Then a viral loop is created.

This snowball effect of customer acquisition is one of the key advantages of a product-led growth model. That's probably why SurveyMonkey's total revenue was $95.4 million, up 20% year over year, and its number of paying subscribers was about 803,000, an increase of about 22,000 paying subscribers from the second quarter of 2020. That’s amazing.

How did SurveyMonkey get all of these users? They created a high-quality product with virality at its core.

Mailchimp

In an interview with The New York Times, Mailchimp co-founder Ben Chestnut shared that his company was able to succeed because they were close to their customers, something their competitors didn’t have.

Their customer-centric approach has resulted in over 12 million active users and $700 million in gross revenue (as of 2019), with an average of 10,000 users signing up for an account every day.

This is all because they adopted a product-led strategy that combined a freemium model with bold, fun branding and strong customer support.

Like SurveyMonkey, when a person receives an email, their first exposure to the company is when they see “Powered by Mailchimp.”

After reading the email, they might decide to learn more about the product and eventually try it out. They can even use it to automate their emails and schedule them to be sent.

Then a viral loop is created. Those interested can try out the tool themselves and become product users (for free).

Create your own viral loop

You might be reading this and thinking: Where does this leave me? How can I create a viral loop for my own SaaS product?

It starts with understanding why people convert. What makes a potential customer become a user? What converts them into paying customers? Trying to see things from your customer’s perspective can help you improve your chances of converting potential customers.

Of course, creating a great product is one way. However, you could consider adopting a freemium model like Zoom.

Alternatively, you could change your product in some way to incentivize existing users to invite others to use it with them. The viral loop accelerates as users benefit by building a large network.

Additionally, it’s key to have a great customer support team so that potential customers and users feel valued.

With this knowledge, you can change the way you present your product so they can see the perceived value before they experience it.

Finally: Don’t try to pursue various efforts simultaneously to gain more exposure and build virality. Instead, focus on the core of your product and the value it provides to your prospects and customers.

This is your greatest asset.

Author: Li Kuan

Source: Li Kuan