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How to scale product growth sustainably
Every product lifecycle includes a growth phase. But speedy growth also comes with challenges—and one of the biggest challenges is how to keep growing your product at a sustainable rate.
Last updated19 Aug 2022
Sustainable product growth is all about the growth that can be kept stable without using additional resources in the future. It usually involves specific steps and stages designed to ensure that your growth product management (GPM) activity stays feasible—and profitable—in the long run.
This chapter of our GPM guide dives into the ways product teams can grow their products and users sustainably. We look at how to balance product growth needs with sustainability, and provide seven tips for companies that want to find that balance.
By the end, you’ll have the insights you need to scale product growth in a sustainable way.
Use Hotjar to guide sustainable user-driven product growth
Hotjar gives product teams an unbiased understanding of what users think and feel, so you can make user-informed decisions to sustainably grow your product.
The importance of sustainable growth
We generally think of growth in linear terms: a company adds new resources (capital, people, or technology), and its revenue increases.
When SaaS companies grow, they do so by scaling their product to increase revenue without a substantial increase in resources. Products that scale successfully achieve lasting growth in sales turnover, while enhancing capability and cost-effectiveness.
Growth is great, but when it happens really fast, it can be hard to keep customers and employees happy. Rapid growth today may exhaust your addressable market and make it impossible to sustain your product over a longer period.
For example, if your product grows too quickly and new users are churning in large numbers, you may never get the chance to make them active users again. As customers get lost and initiatives struggle to have an impact, you can end up growing your costs faster than your revenue.
If your product grows slowly but retains a large percentage of users, it will likely grow more sustainably and deliver on tangible business benefits:
A greater market share
Diversified income streams
Better customer retention
For companies that don’t consider sustainable growth, the pitfall of a ‘growth at all costs’ mindset only becomes visible when the business is already struggling under the weight of too many accounts, orders, or customers.
While your customer acquisition continues at a fast pace, sustainable product growth enables you to support your existing and new customers.
What makes product growth sustainable?
Scaling a business is important—it allows companies to grow revenue, reduce costs, and maintain customer satisfaction.
For a SaaS business, the emphasis is on agility, rapid innovation, and shorter time to value. This means getting to market quickly with a minimum viable product (MVP) and then refining the product roadmap based on customer usage patterns and evolving market dynamics to grow the business.
However, the goal is to increase revenue, not costs—and simply increasing sales isn't enough for SaaS companies to grow. If you're adding staff as quickly as you're adding new customers, you're expanding costs as quickly as revenue. Improving and standardizing processes, however, allows the same number of staff to bring in more customers, while investment in infrastructure allows them to maintain an excellent customer and product experience.
SaaS businesses that achieve sustainable product growth have the foresight to consider two critical aspects:
Building a product that addresses real market needs
Implementing scalable processes and technology, right from the beginning
Pro tip: take a scientific approach to growth.
There are no shortcuts in achieving sustainable product growth—no silver bullet, viral video, or guerilla marketing campaign that will put you on the inevitable path to success.
Top-performing SaaS companies rely on processes and take a scientific approach to growth, rather than relying on unpredictable wins. Sustainable growth involves:
A Hotjar heatmap on an A/B test variation
Who is responsible for sustainable product growth?
Growth should be sustainable at every level of the company, but implementing sustainable best practices often begins at the top.
Managing a growing product can be as rewarding as it can be challenging: involving more people and teams and scaling up is hardly ever easy. Whether you're a growth product manager, a product owner, or a human resources professional, it's important to know how to grow a SaaS business slowly and surely for the long term.
For a growth PM in particular, achieving long-term growth is a never-ending loop—the more sustainable it is, the better the job they’re doing.
7 tips for teams to scale for sustainable product growth
Product growth should be part of a bigger, more detailed growth strategy. By implementing a suitable, sustainable growth strategy that includes product growth as a vital element, you can rest assured that your business can expect better long-term results.
So, how do you focus on scaling, and approach each business decision with your sights firmly set on the future state of your operations?
Use these tips to create a resilient, agile approach that will help your company accelerate product growth, while still laying the foundation for a sustainable SaaS business.
1. Know when to scale—and when not to
There is no ‘one way’ to scale a product. The growth of each product depends on its market, competitors, timing, maturity, and so many other aspects.
You might think that reaching hyper-growth status as soon as possible puts you on the inevitable path to success. In reality, two-thirds of the fastest-growing companies fail, and other macro studies have shown that slow-growing companies tend to do better in the long run than their fast-growing counterparts.
This is not to suggest that you shouldn't want to grow your product—but you need to do it smartly. Remember: effectiveness is more important than efficiency. It pays to learn to be very good at something before you try to scale or automate it.
Rather than scaling prematurely, stay as small as possible until you reach product-market fit. This allows you to quickly respond to market feedback, experiment with new initiatives, and make any ops, dev, and technology changes that may be required to move into the growth stage.
Pro tip: achieving product-market fit doesn’t have to be complicated.
Hotjar gives you tools to better understand your customers' needs so you can build a product they'll truly love:
Use Heatmaps to analyze aggregate user behavior and data about your product’s most popular and unpopular elements
Watch Session Recordings to get a play-by-play of how individual users interact with your product by analyzing mouse movements, scrolls, and navigation
Capturing this quantitative and qualitative user data will help you better address customer needs, which will make it easier to achieve product-market fit.
An example session recording captured with Hotjar
2. Be aware of how your product strategy objectives change as the product grows and matures
The ability of a SaaS company to achieve a higher growth rate largely depends on its ability to accelerate at optimal times during key stages. To do that, high-performing teams continuously revisit and adapt their product strategy.
A good product strategy balances a clear product development direction with the need to make timely adjustments based on meaningful data and insights from experiments, customers, and the market. That said, the function of product strategy and its objectives will change throughout its lifecycle.
Most SaaS businesses start small and are fueled by passion. When they reach the growth phase, it’s usually because they’ve found product-market fit, and the product itself has become accepted and sought out by customers. A few things start to happen at this phase:
A new primary objective: the main focus has shifted from acquiring customers to increasing the product’s market share, while building towards sustainable operations and development
Product development focus shifts: the objective expands to include more emphasis on scaling, so software development, maintenance, and other operations can continue to support the growing demand and usage of the product
Marketing efforts transition: as the product is aimed at a broader audience, the company starts communicating expanded value propositions to address new target customer segments
A balance between existing and new features: an increase in sales will often lead companies to begin racing to release new product features
Bigger and better: some companies may also look to increase external investments to accelerate growth plans
Without continual updates to the product strategy, you run the risks of product dilution, falling short on promised value, and deviating from core value propositions.
A relevant and adaptive product strategy drives focused delivery throughout the entire product lifecycle. It allows managers and their teams to ensure alignment throughout the product growth phase by:
Deciding on the priority of strategic goals
Formulating indicators and metrics to understand progress
Choosing which feature experiments to develop based on these metrics
Knowing what to say no to, to avoid being distracted from the main strategic goals
3. Use customer feedback and data collection to your advantage
A SaaS product that offers little to no value to customers and grows purely through inorganic means is unlikely to sustain itself over the long term. Because SaaS emphasizes a customer-centric approach, the ability to deliver personalized experiences based on user preferences and product usage patterns is a critical success factor.
Customer feedback is an essential tool to develop an excellent scaling strategy that can adapt to the product lifecycle.
Product teams use feedback to identify which new features should be developed first, make changes to the product, and retest. This strategy ensures the product will succeed in the long run on the market, and that it will continue to develop while maintaining the necessary flexibility.
Growth strategies based on anything less than a deep understanding of customers are inefficient: a recipe for high customer acquisition costs, low customer retention, and even damage to your brand.
Effective growth requires a repeatable process for extracting customer insights. A product experience insights platform like Hotjar (hi there! 👋) helps you keep track of user behavior, interactions, and drop-offs at each touchpoint to find features that may be improved, added, or removed.
Each tool can help generate unique, actionable product experience insights:
Session recordings help you see where users get stuck on their pages and find bugs you would have missed
Surveys help you optimize product messaging and functionality to maximize adoption
Feedback helps you understand how customers feel about certain parts of the product experience
Heatmaps help you optimize the self-service purchase experience.
This type of consistency helps you prioritize product development, maximize customer success, and ensure recurring revenue.
Pro tip: mature your product strategy processes to leverage accumulated data.
More users = more data about what your users do, what they need, what their struggles are when using your product, and what they’re looking to achieve.
Track this data, and analyze and present it in a convenient way to all relevant stakeholders, so your decision-making process will be taken in a more accurate, data-based direction.
Use Hotjar Highlights to quickly collate an array of priceless user insights in an easily shareable and digestible space. This information will enable product teams to collaborate more easily, and focus more effectively on time, resources, and budget, ultimately helping you efficiently solve genuine user pain points.
4. Align product scaling goals and initiatives to your company’s growth objectives
Building an MVP and growing it to a full-scale solution based on user feedback is not an overnight task. It requires a complete plan, strategy, market knowledge, and clear understanding of the steps to build and grow a full-scale product.
Consider how product growth and scaling will affect your company goals. To do this, set goals for all areas of the business, such as sales growth, cost management, staff recruitment, and training.
Then, build a business plan for growth with clear metrics for success. Set specific but realistic objectives for each area, like new market penetration, new revenue growth, and cost reductions. You want to establish goals that can be met over the long term.
Don't be afraid to say no to some opportunities for growth if your business plan can't accommodate them. Steady, sustainable growth is better than rapid over-expansion followed by missed promises and unhappy customers.
Set realistic and clearly-defined targets with an outcome-driven product roadmap
Sustainable product growth implies that each team in the company should be able to see the role they play, as well as the big picture. To do this, you can use an outcome-driven roadmap. It describes how a product is likely to grow through the lens of achieving the desired outcomes of customers and the business.
This type of roadmap clarifies the ‘why’ behind your development efforts, and keeps customer and business outcomes top of mind for all team members. This reduces the risks of product development work becoming:
Misaligned or scattered
Ineffective or irrelevant in delivering meaningful customer benefits
Disconnected from company strategy
Teams will get the most out of using this roadmap variant when there's already a strong, shared understanding of the strategic goals aligned to the product vision, key success metrics, business objectives, and the product prioritization framework.
It's ultimately meant to communicate the intent of the product's development, align stakeholders on priorities, and provide the team with visibility on their progress towards overarching goals.
Fintech SaaS Wise grows by creating new teams around customer problems
Scaling up a SaaS business is not just about increasing sales or inventory turnover. It’s also about adapting to a different way of doing business altogether.
In just two years, SaaS provider Wise grew from 4 million to 10+ million customers, and from 1,600 employees to over 2,400. Their main takeaway about growing sustainably? Working in autonomous teams, formed around customer problems.
Wise’s VP of Growth, Nilan Peiris, said that this structure “enables them to move independently, without blocking each other. As each tribe is autonomous, they have all the resources and skills they need to get work done.”
The tribe-like teams can then address customer needs quickly and keep retention rates up.
Wise product teams are organized to deliver speed and maintain accountability
5. Transform the functional, technical, and operational aspects of the product
When your product is heading towards growth, you'll have more customers. And more customers means more needs for the company.
For SaaS and other digital companies, sustaining growth means having the infrastructure to handle increased sales volumes while steadily reducing costs. It means having the ability to support growth by planning and preparing systems, staff, and processes for sustainable growth and profitability over the long term.
Plan to transform the functional, technical, and operational aspects of the product to enable efficient scaling and sustainable product growth.
Focus on operational efficiency
Scaling your business doesn’t just mean using your current systems to take on more and more customers. In fact, some aspects of your business that were once assets can become constraints at scale.
Sustainable product growth requires every process you implement to consider operational efficiency. Focusing on operational efficiency removes the roadblocks to expansion by asking a simple question: can this process be scaled to serve customers at every stage of your business?
Think about how the processes you implement now will encourage or hold growth back in the coming years. Reducing inefficiencies eases friction and promotes scalable processes that keep your growing operation healthy and successful.
This will enable efficient scaling of resources to meet the growing user demand. The last thing you want is for your product's greatness to cause it to fail.
Establish structured, repeatable processes
Sustainable product growth requires repeatable and predictable systems. Refining and developing these systems is how companies can go from thousands of customers to millions.
Whether you’re a startup with a product just hitting the market or an established business trying to take your enterprise to the next level, your goal should be to evolve the planning and prioritization processes and methodologies to become more objective, repeatable, and outcome-driven.
Establish structured, repeatable processes for the everyday operations of the business. This includes payroll, accounts receivable, training of new hires, customer onboarding, and dealing with complaints.
Invest in company culture
Most startups spend years carefully building a cohesive company culture, and you need to be sure not to let it slip away. Striving for balance in how your teams are structured and in the culture you create can better position your company to weather growing pains.
A strong sense of organizational identity helps the business scale up to the next level. Get your employees involved in the process of defining what is most important to them, and make sure everyone inside the organization is clear on how the business does business.
Promote a culture and environment where people want to be, and want to excel. Make sure they're properly engaged, motivated, recognized, and rewarded.
Pro tip: help the development team become self-sufficient.
As your product grows and your workload increases, so does the need for your team to understand customer needs and autonomously decide how to best address them.
When you’re working alone, the goal is to maximize your productivity. But when you’re a manager, the game is maximizing your team’s autonomy.
As a manager, you can help the development team learn about the users and understand their needs as early as possible. For example, you can involve team members in user research as part of the product discovery work, and expose them to direct user feedback on early product increments.
This will allow team members to own the solution and make the right customer experience and technology decisions, increase people’s motivation, and lay the foundations for adding more teams.
Invest in scalable technology
Technology can transform the way SaaS companies do business, but these tools should also help your business adapt to growth, making it sustainable. The goal is to invest in technology that is flexible enough to support changing operations seamlessly.
This generally involves addressing tech tools that provide value in product experience insights, automation, continuous integrations, and scalable cloud services such as payment APIs and Customer Relationship Management (CRM) in the context of digital product development.
Invest in technology that does the work of today, as well as the jobs you’ll need tomorrow. For instance, your company might not use the artificial intelligence features of a new software to the fullest potential, but investing in this technology means you can apply those capabilities in the future more quickly than your competition.
Consider the role that technology, consolidation, or outsourcing might play in your growth plan:
Update your infrastructure: do your premises, website, IT systems, and general infrastructure meet not just your current needs, but also your future ones?
Center on the end-to-end user experience (UX) during scaling efforts: take a full-stack development approach, even if scaling efforts are primarily backend-focused
Weigh the cost of automation development and maintenance against potential value gain and effort savings; not everything needs to be automated
6. Balance continuous improvement and new feature development
Scaling a product involves walking a fine line between creating and delivering new features, and improving existing infrastructure and performance.
While growth is certainly a reason to celebrate, you now have to cope with an increasingly large target audience, more diverse needs, more features, and more development teams. This can lead to stakeholders making decisions to:
Accelerate growth over other priorities, pushing product teams to leverage that success in an unfocused manner
Become hyper-focused on a specific feature set defined by a user cohort that doesn't properly represent the customer segments needed to increase market share
Direct product teams to focus more on single features over maintaining coordination across teams, leading to siloed engineering efforts
As the product grows, growth PMs need to work with core PMs to find the right balance between the business and customer’s needs, and the internal needs to support the product scale.
Keep an eye on how new features influence current features and functionalities. The idea is to find the suitable combination and balance between those two, to fit your product and company. This will allow you to address the needs of existing and new target customer segments.
Analyze, test, and experiment
As you grow and evolve, emphasize adaptability and testing to continuously improve the quality of the product. Everything you tracked during the MVP launch—traffic, customer experience, conversions, abandoned carts, social interaction, etc.—must remain on your radar.
Continue to track your product performance and undertake A/B testing to home in on the development or improvement of features that solve problems for customers and have real impact.
Design and choose experiments that are aligned with these insights, then shape a product roadmap that communicates the priority of these experiments and development efforts. As a result, you can continuously improve your customer journey and the product itself, resulting in customer delight.
Remember to always be dynamic—what was true a year ago might not be right for you right now. As time changes, so does the market, technology, people, and expectations. Adjust accordingly, keep updating your strategy, and rebalance as you go.
Pro tip: make strategic decisions about features—new or improved.
When deep-diving into user needs, notice whether it's an independent need, or an addition to an existing functionality.
Rushing to add new features and functionalities can potentially increase the complexity of the product and leave you with unnecessary developments that can become a burden in the future.
You can use Hotjar’s product experience insights to keep your solutions as simple as possible by:
Mapping the customer journey to spot key pain points
Investigating how new features are performing
Troubleshooting issues with reliable user insights to make the right prioritization calls
Find moments of user delight where they would be most likely to champion or recommend your product to someone else
Gaining empathy for users by seeing the experience through their eyes
Identify where users get stuck, struggle, get confused, and leave
Hotjar's tool stack is designed to keep the user’s experience and perspective top of mind
7. Monitor progress and adjust your product growth strategy to keep it sustainable
Scaling a business isn't a one-time event—it’s an ongoing process. Keep comparing your progress to your clearly-defined targets, and make adjustments as necessary.
For a SaaS company, sustainable growth depends on factors like product-market fit and positive net growth. To keep track of success, keep an eye on metrics that reflect how customers actually use your product:
Product-market fit: retention is the best indicator of product-market fit; a great product not only gains new users at a healthy pace, but also keeps those users coming back because they find value in the product
Net growth: the metric that best represents net growth is the quick ratio, or the ratio of the sum of new users and resurrected users to churned users
A successful product must have a high retention rate and a quick ratio of more than one, which indicates positive net growth. This helps work out how much revenue growth you’re actually achieving—regardless of how many new customers you’ve attained—and how satisfied your existing customers are with your product.
Track user growth and retention to keep your product on the right track
It’s important to find the right balance between growing your user base and retaining users for continued product growth. Here’s what that can look like:
If you’re growing but have trouble retaining users: this scenario happens when you’re achieving positive net growth, but low retention. To reach sustainability, start by slowing down acquisition of new users and focusing on retention. The goal is to generate a core audience that loves your product and is deeply engaged with it. Use exploratory analysis to understand what keeps engaged users returning to your product, then figure out how to gain more users like them.
If growth is slow and your users are churning fast: not experiencing growth can also be a result of churn outpacing acquisition and retention. This usually happens when the product doesn't offer enough unique value. Going back to the drawing board and talking to customers about what they actually want from your product can help. You can also consider moving into different markets.
If growth is declining but core users are retained: if you’ve achieved product-market fit with a small group of users, but are losing active users overall, consider investing in marketing and growth campaigns. This way you may be able to capitalize on your ability to retain a core group or number of users who love your product, in order to catalyze growth.
If you’re experiencing positive growth and high user retention: congratulations, you’ve achieved the ultimate goal for every SaaS product! To stay sustainable, use your existing user base to fuel future growth by expanding into a new market.
Renewal is just as important for product growth as acquiring new customers
As your SaaS product grows, focus on more than just acquiring new customers—ensure that existing customers continue to use your solution, too.
By providing a great customer experience, you can encourage users to renew and use more of your services to drive profitability.
SaaS businesses can measure the impact of renewal with metrics like Monthly Recurring Revenue (MRR) and Annualized Return Rate. Tracking these metrics helps you build a much more predictable revenue stream, which makes financial planning, investments, and sustainable growth more achievable.
Grow, scale, succeed: next steps for sustainable growth
A great sustainable growth strategy puts the customer at the heart of your product to enable predictable, sustainable revenue acquisition, and helps you shape a SaaS product your customers love.
No matter what you do to ensure the growth of your business, focusing on sustainable scalability means you can meet the challenge of changing markets and emerge into a brighter, more secure future for your company.
Use Hotjar to guide sustainable user-driven product growth
Hotjar gives product teams an unbiased understanding of what users think and feel, so you can make user-informed decisions to sustainably grow your product.