Breaking down barriers: Strategies for successful SaaS global expansion

This article is based on CMO at Fastspring, David Vogelpohl’s panel discussion at the Future of SaaS Festival 2023. Watch the whole thing here.

It's an exciting time to be in the software industry, but expanding your product and services across borders is no small feat.

As someone who has helped countless SaaS companies navigate the global landscape, I've seen first-hand the challenges and opportunities that come with taking your product global. 🌎

But fear not! In this article, I'll share insights to help you successfully expand your SaaS business internationally. From S curves and market research to localization and customer support, I'll cover everything you need to know about SaaS pricing and packaging strategies to make your global expansion a success.

So buckle up and get ready to take your SaaS company global!

Here’s how I’ll break it down:

Why is global growth so important?
How to optimize pricing and packaging strategies
Final thoughts

Why is global growth so important?

Global growth is maybe the biggest lever for your SaaS business, and when you dive into the numbers you can see just why.

So when looking, for example, at the annual growth rate of SaaS companies between 100 and $500 million annually, and the percentage of their revenue reflected from international revenue, you can see that companies with over a 50% annual growth rate, had, on average, 31% of that coming from non-native countries.

This shows one thing clearly: companies that sell globally have faster growth rates and higher revenue overall.

S curves of business growth

But of course, it’s not quite as easy as that to secure that revenue growth.

We need to start by looking at the innovation S curve.

What the innovation S curve represents is that there's a challenge or problem that needs solving, you then invent a solution that addresses it.

That solution gets slow adoption at first, mass adoption very quickly perhaps, and then levels out. That’s where we get our S from.

Relying on this product innovation S curve to drive value in your business is good, but the added geography going global presents a huge opportunity.

If you’re in more geographies, and launch a new product, you can get more adoptions. These increased adoption and growth rates will in turn amplify other parts of your business.

How to optimize pricing and packaging strategies

It’s in the numbers! The companies that grow fastest have the highest percentage of international revenue.

So how can we optimize global pricing and packaging strategies to secure this growth?

One way to begin thinking about this is by thinking about operational leverage, considering the amount of work invested and its possible return.

You need to look for any opportunities for these material payouts and prioritize these projects within your strategies and roadmap.

In terms of what we’re talking about here today, these opportunities arise in the strategies discussed below. 👇

Localization as key

Localizing currency 💲

One of the first things to consider when expanding globally is how exchange rates and inflation rates can impact your business. When you're selling in different countries, the exchange rates can fluctuate, making it challenging to set a consistent pricing strategy.
One way to mitigate this risk is to price your product in the local currency and adjust the prices periodically based on the exchange rates. This way, your customers will always pay the same amount in their local currency.
Another thing to consider is inflation rates. When inflation rates are high in a particular country, the local currency's value can decrease, making your product more expensive for customers. In this case, you may need to adjust your pricing strategy to ensure that you're not pricing yourself out of the market.

Localizing payment methods 💳

The other part of this is localizing payment methods based on the preferred methods of each country you’re selling in.
For example in North America, everybody seems to make payments using credit cards, whereas, in Europe, most people prefer using debit cards.
So paying attention to what your audience prefers can unlock real value.

Tax and compliance 🧾

This is a crucial part of the process when getting into a new region, you need to file with local taxing authorities, estimate this tax filing, pay it, and deal with the taxing authorities.
But luckily, there are lots of solutions to help with this process, such as automated tax compliance software systems, but there is also the option of using a merchant of record.
A merchant of record sits between your customer and you from a billing and tax compliance perspective. The customer buys from the merchant of record and you get all the proceeds, but the merchant of record does all of the tax work, compiling everything in one place and saving you the stress!

Willingness to pay 👍

An essential factor to consider when expanding globally, willingness to pay is a measure of how people value your product, and it is crucial to research this before expanding into a new market.
Use the data and the value you’re providing and set your prices around this willingness to pay, never make assumptions about what you think a country or region is willing to pay for your platform or service.
If you’re trying to break into a market with less willingness to pay, you can create lower-tier plans to help address that, for example adjusting your pricing strategy to include geo-specific discounts.

Iterative approach 🔄

Focusing on progress over perfection, finding points of leverage, refining your process as you go, and localizing language and customer experience, will help you to build more assets in your business.
If you’re a smaller organization or SaaS startup, you may not have the time or resources to translate every page and resource to each of the countries or regions where you want to be working. So, if you’re a B2B company you can translate the specific key buying materials.
Another interesting option comes in the form of partnering strategies, working with affiliates, partners, or resellers, who will help you get into the localized market, highlight value, work with communities related to your SaaS product, or even simply help you sell your products.
This can help you get a foothold in new markets, and understand each country’s target audience better, benefiting them through the more personalized value you can deliver, and helping your growth in these new markets.

Final thoughts

Taking your SaaS product to a global market can be a daunting task, but with the right strategy and approach, it can also be incredibly rewarding.

By understanding the factors that impact global expansion, including language, support, and pricing, you can develop a strategy that positions your business for success in new markets.

Finding the right opportunities to add multiple S curves of growth in your business, looking for operational leverage to maximize payouts, and localizing currencies, payment methods, languages, and support, will all help you to drive progress and secure global assets.

By following these guidelines and investing the time and resources to do it right, you can effectively take your SaaS product to a global market and drive growth and success for your business.