Expanding customer revenue: 5 key levers to drive business growth

Startup growth is a complex phenomenon with many moving parts working independently and in tandem. Understanding these drivers is essential if you want to grow your user base and revenue over time.

One crucial driver of growth is your customer base. When it comes to driving growth through customer acquisition and retention, most startups don’t have a clear roadmap for success. Some think that simply getting more customers is the solution, but it isn’t that simple. User growth is a function of all your efforts to acquire new customers, retain them profitably, and increase their lifetime value to your business. 

This post will explore 5 key drivers of user growth and provide ways to capitalize on them. These include:

1. New revenue drivers

2. Lead generation

3. Tweaking your pricing

4. Expanding existing accounts

5. Lowering attrition

Let’s dive in!

#1 New revenue drivers

Every startup needs new revenue sources to sustain growth. New revenue can come from 3 avenues:

• New products or features

• New customer segments

• New markets

New products or features

Suppose you’re a SaaS business called ‘SaasApp’ that sells marketing automation software to small business owners. Adding new features to your product could be as simple as offering the ability to collect emails from different websites to add to campaigns (as opposed to bringing your own email lists); or as challenging as offering a landing page builder that connects to your marketing automation platform. You could also develop a companion Chrome extension that users can download and install in their browsers to manage their campaigns on the go. New features that solve a tangible problem for your customers can be a great way to boost revenue for your startup.

New customer segments

Another revenue driver is expanding the customer segments you serve by introducing product features and pricing tiers that are relevant to them. Continuing with our SaasApp example, you might create and sell an enterprise version of your platform for larger organizations looking to ramp up their marketing and lead generation activities. This would require more heavy-duty features (handling email addresses of 100,000 or more, for example), pricing models (going from per-contact pricing to per-email pricing), and customer support channels to handle the increased workload.

New markets

You likely started your startup with a core geographical location to serve. For example, SaasApp might focus on the North American market after you identified a gap in competitor offerings. But as you grow and new competitors enter your market, you might want to expand your service area to different countries and continents where there is less competition and more opportunity for growth. For example, SaasApp might consider serving clients in Asia and Europe with dedicated offices and a localized version of the platform.

#2 Lead generation

Lead generation is another key driver of business growth - especially in the early days. The rate at which you find, engage with, and convert new customers determines much of your ability to expand your product line and grow your team. A solid lead generation strategy involves first crafting an ideal customer profile (or several) and mapping out where each of these ICPs hangs out, what type of content or approach will resonate with them, and how to reach out and engage with them.

Beyond traditional marketing channels like TV, radio, and print, there are 12 lead generation channels you can mine for targeted leads depending on your business. These include:

1. Conferences & trade shows

Best suited for B2B products and services, conferences and trade shows help you connect with leads that want to learn more about topics related to your industry and products. Whether you're there to simply network or actively setting up a booth to display and pitch your services, trade shows can be a powerful way to collect warm leads to engage later.

2. Content marketing

Content marketing involves creating helpful, relevant content that your audience needs to answer pressing questions or learn more about a topic. A subset of inbound marketing, content marketing provides a long-term ROI and can be up to 62% cheaper than other marketing channels. You can use content to generate leads through compelling calls to action and email subscription forms for future nurture campaigns.

3. Direct mail

Traditional lead generation strategies still work, and they can be a powerful way to put your brand in front of targeted prospects. Direct mail lead generation involves newsletters, postcards, brochures, and flyers handed out or delivered to customers who fit a certain customer profile for your business. They're easy to design and print, cost-effective to send out, and easy to track analytics through embedded instructions (ex. "Show this flyer and get a 10% discount!).

4. Email marketing

Email marketing is one of the highest-ROI channels in marketing, returning up to $42 for every dollar spent. You can collect emails from other channels and set up campaigns to nurture them through platforms like Marketo, Mailchimp, GetResponse, ActiveCampaign, or ConvertKit. Learn more about different email marketing platforms in our article on martech tools.

5. Outbound calling

Picking up the phone is one of the oldest - and yet effective - ways to drum up new business. While
cold-calling can be a time-consuming activity, speaking directly to prospects allows you to learn more about their needs and personalize your pitch. Best practices for cold-calling include:

1. Setting up a time to talk beforehand

2. Listening more than you speak 

3. Countering customer objections intelligently

4. Injecting a sense of urgency

5. Leaving each call with a clear way forward

6. Partner marketing

Partner marketing means collaborating with non-competitive brands to cross-promote your products and generate new leads. These relationships are mutually beneficial and can expose your brand to new audiences that would've otherwise taken much longer to reach and engage. For example, SaasApp can partner with a social media management platform to cross-sell its marketing automation product to an audience of marketers and business owners.

7. SEO

Optimizing your landing pages and blog content for search helps you capture customer intent on popular search engines like Google and Bing. You can optimize your landing pages by using the right keywords, headings, and titles, as well as by improving your website's load speed and security. Learn more about SEO in this FMP article on the 3 types of SEO.

8. Paid search/PPC

Typically a companion strategy to SEO, paid search or pay-per-click ads involve creating text ads that display alongside search results on Google, Bing, and other search engines. These ads are shown when specific keywords are searched for to maximize relevance and capture search intent. For example, a user searching for the 'best email marketing tool' might see an ad for SaasApp's marketing automation tool and be induced to click on it and learn more at the SaasApp website.

9. Display ads

You can create and publish display ads across multiple websites such as social media platforms, news websites, and other media outlets. Display ads are an effective way to drum up new leads and can be easily targeted and tracked according to demographic and psychographic behavior. Display ad campaigns require a clear plan, a set budget, relevant KPIs, and a timeline to ensure success.

10. Social media 

Social media provides a granular way to find and advertise to targeted customers across different platforms. As one of the most cost-effective lead generation channels in your toolbox, social media allows you to test different ad campaigns and creatives, advertise to custom and lookalike audiences, and track your results in real-time. Platforms like Facebook and Instagram can expose your brand to billions of users, while others like LinkedIn and Twitter can help you reach B2B clients relevant to your product.

11. Webinars

Webinars are informational videos hosted by brands looking to engage a select audience. Prospects can ask questions and learn more about how your solution can help their businesses. Webinars can be held live or pre-recorded, and are typically preceded by social media posts and emails announcing the event and giving a sneak peek into what will be discussed. You can use tools like Zoom or Airmeet to host your webinars.

12. Word-of-mouth/referrals

Still the best way to generate new leads, word of mouth marketing leverages trusted social proof to bring in new customers. It relies heavily on you having a stellar product or service, delivering great value for money, and offering comprehensive customer support. These are still the best forms of marketing and can help you attract new customers on auto-pilot through referrals.

The above channels are great for lead generation, but how much should you actually charge for your product? Let’s look at how you can optimize your pricing.

#3 Tweak your pricing

Pricing plays a big role in meeting your revenue goals, and tweaking your pricing can have significant effects on your conversion rates, churn, MRR and ARR, and profit margins. A few ways to tweak your pricing include offering annual subscription discounts and exploring different pricing models.

Volume discounts can be a great way to lock in customers for the long term while ensuring steady cash flow. By giving discounts for annual subscriptions (e.g. 20% off if you sign up for 12 months upfront), you provide value for money while reducing churn.

Different pricing models make sense to different customers, and it’s best to test and tweak these models until you find what works for your business. For example, large enterprises might prefer paying for usage rather than the number of seats in their package, while small businesses might prefer an unlimited use pricing model that charges for seat access. You can also offer discounts or freebies for bulk use (e.g. Facebook giving you free ad impressions over a certain spend threshold).

Each change in your pricing might result in churn as existing customers leave for better alternatives, so poll your customers for their thoughts on your pricing, provide plenty of advance notice before making any changes, and track pricing-related attrition to course-correct where necessary.

#4 Expand existing accounts

You’ve heard it time and again: it’s cheaper to retain existing customers than to acquire new ones. Your current users present an opportunity to increase your revenue without spending money on new marketing campaigns. You can achieve this by cross-selling or up-selling new products based on usage and need.

Suppose SaasApp has the following six features:

• Email campaign dashboard with templates, analytics, and list management

• Landing page builder with signup forms and payment processing

• Webinar hosting with screen sharing, CTAs, and polls and surveys

• Marketing automation tool with tagging, website tracking, and automation

• Paid ads capabilities across Facebook, Google, and Instagram

• Web push notifications with custom prompts and analytics

Suppose further that your lowest-level package comes with just an email campaign dashboard and landing page builder. You could upsell these customers on your webinar hosting feature to help them engage their leads more effectively, or sell the paid ads functionality to run ads across social media in tandem with their email campaigns. After building a landing page using your product, you might show them a prompt to add web push notifications to their package to enhance their conversion rate. The key is to show how these extra services augment their existing workflow and drive more growth and results.

#5 Lower attrition

There are key steps you can take to reduce churn and retain your customers. These include:

• Better customer support

• Ongoing product training

• Opportunities to give feedback

Offer better customer support

Customer support is key to long-term customer retention. A poor customer experience can lead to negative word-of-mouth marketing. You can offer customer support via live chat, phone, email, or social media, and provide a dedicated account manager for larger clients or more technical products. Lastly, creating an online forum where users can get answers from other users helps foster a sense of community while providing an audience for any future product announcements or updates.

Provide helpful product training

Your product might be complex and take time to learn, so offering product training allows your customers to feel more confident using it and derive more value from it. You can offer one-on-one or group training sessions, webinars, or online videos. Just be wary of overwhelming your audience with information - focus on a few core features or topics that give them the most bang for their buck.

Enable customers to give feedback and provide suggestions

Feedback feeds the product development process. Offering regular avenues to receive feedback from your customers helps improve your product in the long run. Feedback can be sourced at different points of the user experience, such as:

1. Before the sale ("What products and features do you currently use?")

2. After the sale ("Were you happy with the onboarding process?")

3. After customer support ("Were you fully satisfied with the way we handled your issue?")

4. After churning ("Why did you leave, and what could we have done better?")

Delight your customers to drive business growth

Your users are one of the greatest levers for business growth that you can focus on. Customers who are completely satisfied with your product or service are more likely to recommend it to friends, family, and colleagues.

Beyond expanding your product range to meet their needs or tweaking your pricing to suit their budgets, one of the best ways to improve the customer experience is by listening to their problems and providing stellar support where needed. Use the tips in this post to supercharge your revenue growth from happier customers - and get more tips on startup marketing from the Founder's Marketing Playbook.