Since 2024, the SaaS industry has entered a period of economic turbulence, marked by tighter capital and cautious investors. Global venture funding fell dramatically in early 2024 \u2013 Q1 investments are 20% lower YoY and the second-lowest quarterly level since 2018 (source: CEE SaaS Index \u2014 March 2024 update | Vestbee). Mega-rounds have dried up: only 21 private SaaS deals over $100M closed in the past 12 months, versus 147 at the 2021 peak (source: SaaS Startup Funding Falls | Crunchbase).<\/p>\n\n\n\n
High interest rates and inflation further cloud the outlook, leading to economic uncertainty going into 2025. According to SaaS Capital, equity financing is \u201cexpensive and\/or limited\u201d, prompting many companies to seek debt or conserve cash instead (source: 2025 Private SaaS Company Valuations | SaaS Capital).<\/p>\n\n\n\n
In short, raising money has become significantly harder, forcing SaaS founders to extend runways, focus on efficiency and somehow \u201cprioritizing profitability over growth\u201d, as SaaS Capital observes in their 2024 Growth Benchmarks for Private SaaS Companies. In summary, the era of easy capital has ended, and SaaS leaders now face a new reality of capital constraints and investor scrutiny.<\/p>\n\n\n\n
Intensified competition and slower customer acquisition<\/strong><\/p>\n\n\n\n Experts note that \u201cacquiring new customers has become more complex, time-consuming, and expensive\u201d in the post-2022 environment (source :\u00a0The SaaS Retention Report: The New Normal For SaaS | ChartMogul<\/a>). The pandemic-era SaaS boom \u2013 fueled by cheap money and rapid digitization \u2013 gave way to a \u201cgrowth bubble [that] popped\u201d as demand cooled in late 2021. Since then, most SaaS companies have seen sharply slowing new business. In fact, 2022-2023 were dubbed a \u201csoftware recession\u201d for the industry, with net new ARR growth stalling (source: Kellblog Predictions for 2024 | Kellblog). Although 2024 shows signs of stabilization, it\u2019s a \u201cmodest growth\u201d environment rather than a return to hypergrowth\u201d.<\/p>\n\n\n\n Across public SaaS companies, many report \u201clonger sales cycles\u201d, tighter budgets, and \u201cprolonged decision-making processes\u201d from clients (source :\u00a0Sentiments on the SaaS Sales Environment from ~70 Publics | Blossom Street Ventures<\/a>).<\/p>\n\n\n\n The competitive landscape compounds these challenges. With growth harder to come by, SaaS vendors are all vying for the same limited opportunities. Rising digital ad costs and crowded niches mean that Customer Acquisition Cost (CAC) has surged due to intense competition and higher ad bids (source :\u00a0Customer Acquisition Vs Retention Costs: Statistics & Trends You Should Know | Invesp<\/a>).<\/p>\n\n\n\n Retention and Upselling: the new Growth drivers<\/strong><\/p>\n\n\n\n With new sales slowing, SaaS companies are increasingly turning inward to sustain momentum. Existing customers have become the lifeblood of growth in the downturn. Industry veteran Dave Kellogg captures this shift bluntly: \u201cRetain is the new add.\u201d (source: Kellblog Predictions for 2024 | Kellblog<\/a>). In practical terms, this means maximizing the value of the users you already have \u2013 keeping them happy, renewing their subscriptions, and expanding their spend over time.<\/p>\n\n\n\n Data shows that expansion revenue (upsells and cross-sells) now accounts for a much larger share of growth than it did during the boom years. In 2024, SaaS companies around the $20M ARR range are seeing about \u201c40% of their growth driven by expansions with existing customers, up from 30% in early 2021\u201d (source: The SaaS Retention Report: The New Normal For SaaS | ChartMogul<\/a>). As ChartMogul\u2019s research of 2,500 SaaS businesses notes, Net Revenue Retention (NRR) has become the \u201cmost vital metric for sustaining growth in 2024 and beyond<\/a>\u201d. For instance, a recent European SaaS survey reports median NRR holding steady around 110% year-on-year \u2013 meaning the average company slightly grows revenue per customer annually, offsetting churn (source: Rapport SaaS europ\u00e9en 2024 | GP Bullhound<\/a>). In fact, many companies managed to maintain or even improve net retention through the downturn by doubling down on customer success and product value.<\/p>\n\n\n\n Experts widely agree that investing in customer retention is not just a defensive play, but a smart growth strategy. \u201cAccording to Harvard Business Review, acquiring a new customer can cost 5 to 25 times more than keeping an existing customer\u201d (source: Customer Acquisition Vs Retention Costs: Statistics & Trends You Should Know | Invesp<\/a>). \n\nIn lean times, this ROI difference is critical. Retaining and upselling an existing client yields revenue at a fraction of the cost of landing a new logo \u2013 no hefty marketing spend or long sales cycle required. Moreover, satisfied customers often expand their usage organically and refer others, creating low-cost growth. \nLittle wonder that SaaS leaders are shifting resources from pure acquisition to retention programs like customer success teams, loyalty incentives, and usage-based pricing that encourages expansion.<\/p>\n\n\n\n Upsells can prop up growth when new demand is shaky. By deepening engagement with current users \u2013 whether through additional seats, modules, or higher-tier plans \u2013 SaaS firms can achieve \u201cgrowth from within.\u201d Importantly, this strategy also fortifies the customer relationship against competitors. If your product becomes more entrenched in a client\u2019s operations, it\u2019s harder for a rival to displace it, and the client has more incentive to stay through tough times.<\/p>\n\n\n\n Customer retention isn\u2019t just about preventing churn; it\u2019s about maximizing each customer\u2019s long-term value. High retention correlates with strong business health. Companies are now measuring both gross and net retention carefully. Even investors are rewarding this: firms with superior retention metrics and efficient expansion command higher valuations in today\u2019s market.<\/p>\n\n\n\n In a sense, retention has become the new growth currency. SaaS companies that keep churn low and upsells high can sustain respectable net growth rates even if new bookings slow, which is crucial for staying competitive when every dollar\/euro is hard-won.<\/p>\n\n\n\n Resilience through balanced growth<\/strong><\/p>\n\n\n\n The current downturn has been a wake-up call for SaaS businesses to refocus on fundamentals. Uncertain economics and scarce capital have ended the era of growth-at-all-costs, replacing it with disciplined, customer-centric strategies. In 2024\u2019s tough climate, success favors those who can \u201cdo more with less\u201d \u2013 extracting more value from each customer rather than relying solely on big new wins. Companies that nurtured loyalty and product stickiness are weathering the storm with solid recurring revenues, while others scrambling for new sales find themselves in an uphill battle.<\/p>\n\n\n\n The playbook emerging from top experts and data is clear: shore up your base before chasing new frontiers. By prioritizing retention and upselling, SaaS firms can maintain growth trajectories and even strengthen their market position during a downturn. This doesn\u2019t mean giving up on acquisition, but rather balancing it with expansion of existing relationships. And those who execute on this balanced approach will be best positioned to ride out the downturn and accelerate again when the tide turns.<\/p>\n\n\n\n So, to succeed today SaaS companies must focus on capital efficient growth. Best-in-class SaaS companies now focus on retention and expansion, and mature companies are shifting their growth strategies to prioritize existing customers. Contact us<\/a><\/p>\n\n\n\n <\/p>","protected":false},"excerpt":{"rendered":" Depuis 2024, l’industrie du SaaS est entr\u00e9e dans une p\u00e9riode de turbulence \u00e9conomique, marqu\u00e9e par un resserrement du capital et des investisseurs plus prudents. Le financement mondial du capital-risque a chut\u00e9 de mani\u00e8re significative au d\u00e9but de 2024 – les investissements du premier trimestre sont inf\u00e9rieurs de 20 % en glissement annuel et repr\u00e9sentent le… Read More »Retention and Upselling: the new Growth drivers<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":676,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[6],"tags":[12,15,13],"class_list":["post-666","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","tag-conseilstrategie","tag-mentoring","tag-misenoeuvre"],"_links":{"self":[{"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/posts\/666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/comments?post=666"}],"version-history":[{"count":8,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/posts\/666\/revisions"}],"predecessor-version":[{"id":674,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/posts\/666\/revisions\/674"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/media\/676"}],"wp:attachment":[{"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/media?parent=666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/categories?post=666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aceconsulting.info\/en\/wp-json\/wp\/v2\/tags?post=666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}