How SaaS businesses can grow during economic uncertainty

Continue to grow your business without adding engineering, finance, or operations headcount.


The world’s most successful platforms and marketplaces, including Shopify and DoorDash, use Stripe Connect to embed payments into their products.

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  1. Introduction
  2. 1. Retain and grow the revenue you already have
  3. 2. Experiment with pricing, and offer incentives to drive acquisition
  4. 3. Tailor the customer experience
  5. 4. Optimize your engineering resources
  6. 5. Automate your back office
  7. Additional resources
  8. How Stripe can help

There is more pressure today than ever before for SaaS businesses to grow, especially in the face of economic headwinds. While there will always be external factors that are out of your control and that may impact your business—such as rising interest rates or supply chain issues—there are a number of ways you can scale despite a slowdown.

From recovering lost revenue to customizing payment methods, this guide highlights how you can grow without adding engineering, finance, or operations headcount.

1. Retain and grow the revenue you already have

Most SaaS and subscription companies face involuntary churn issues, where a customer intends to pay for a product, but their payment attempt fails due to expired cards, insufficient funds, or outdated card details. In fact, involuntary churn accounts for up to 25% of customer churn. With more customers reining in their spending, it’s crucial to retain the revenue you do have.

The easiest way to tackle involuntary churn is to automatically get ahead of any potential payment failures. For example, you can send automated emails whenever a card expires or a payment is declined. Billing systems can also update expired cards and automatically retry failed transactions on a customized schedule—for example, every seven days—to increase the chances of a successful payment. Additionally, you can send automated emails whenever a card expires or a payment is declined.

Postmates, an online delivery marketplace, added more than $70 million in revenue by working with Stripe to reduce involuntary churn. With Stripe’s card account updater, more than two million expired or replaced customer cards were automatically updated on Postmates, which translated to $70 million in revenue. Stripe Billing’s Smart Retries also recovered more than 200,000 payments that originally failed, adding $3 million in additional revenue.

2. Experiment with pricing, and offer incentives to drive acquisition

Online businesses are rarely simple or static. And as economic conditions change unexpectedly, your business needs to be flexible enough to adjust. As customer spending decreases, you may want to experiment with promotional discounts, introduce a free trial, or set a subscription schedule (where you charge customers an introductory rate and then automatically change the price after a set number of billing cycles).

You may also want to experiment with different pricing models to help customers control their spending. You could offer usage-based pricing, where billing changes based on how many gigabytes of storage customers use or how many users are active each month.

Over time, you might even introduce a new tier of your product or service to create an additional revenue stream. On-demand food delivery service Deliveroo did just that. With the help of Stripe, they launched Deliveroo Plus, which offers free delivery for a monthly subscription fee. In addition to increasing recurring revenue, Deliveroo Plus also boosted retention among users who adopted the new service.

3. Tailor the customer experience

Customers expect a relevant, familiar payment experience, and the easier you make the payment process, the more likely you are to generate sales. Considering the current economic climate, look for ways to offer even more payment flexibility to your customers. For example, you could provide ways to help customers better manage their cash flow, like letting them choose their payment terms (e.g., immediately, within seven days, or within 30 days).

It’s also important to customize payment methods based on customer preferences. For example, consider supporting bank transfers so customers can easily and securely make large payments. Or, to expand globally, you can offer local currencies and payment methods, like Noom did. In Germany, the digital health platform discovered that direct debit was a higher priority for customers than credit cards. With Stripe, Noom could easily accept this popular payment method, test different local payment methods, and offer more payment flexibility to its customers around the world.

4. Optimize your engineering resources

Many SaaS businesses initially try to build a billing solution themselves, but underestimate the long-term complexity and costs. A homegrown solution needs to be continuously maintained to support new product launches, business models, pricing experiments, global expansion, changes in regulatory requirements, and a host of other challenges as businesses grow. As resources become constrained, this means that your engineering resources become more focused on maintaining this system than building your core product.

Finding the right billing system can off-load these manual, repetitive tasks and simplify your operations, saving you time and resources. While any billing solution should be customizable, it should also handle the following six basic tasks without adding more overhead:

  1. Accept recurring orders
  2. Set flexible billing logic
  3. Collect recurring payments
  4. Minimize voluntary and involuntary churn
  5. Integrate with internal systems
  6. Monitor key business metrics

5. Automate your back office

The more you grow, the more challenging it is to manage payments logistics such as reconciliation, revenue reporting, and taxes. Scaling these manual processes is error-prone and inefficient, creating extra work for your finance team. To help you save on costs and close your books faster, find a provider that can automate the following tasks:

Invoice reconciliation: Manually reconciling payments can result in hours of work for each transaction. For example, you traditionally need to generate an invoice in your ERP or accounting system (often in paper or PDF form), track the incoming check or ACH payments from customers, and then verify that the amount matches the invoice.

Instead, look for a provider that offers auto-reconciliation that will automatically match outgoing invoices with incoming payments so your accounting and finance teams don’t have to manually match each one.

Accrual accounting: Revenue reporting gets complicated quickly as payment volumes and product lines increase. If you need to manage changes, refunds, disputes, and prorations, revenue reporting can be especially complex, because these subscription updates can complicate the process of recognizing and deferring revenue accurately and compliantly.

The ideal solution helps simplify the process of recognizing revenue for your accounting process without requiring extra engineering resources or lengthy configurations. It should give you a complete picture of your revenue and allow you to access and assess transaction, fulfillment data, and billing terms with just one reporting tool.

Filing taxes: Tax compliance doesn’t go away, even in an economic slowdown. Internet businesses are required to collect taxes in more than 130 countries and in most US states. Staying compliant can be challenging: Tax rules and rates change constantly, and they vary based on what and where you sell. If you ignore these complexities, you risk paying penalties and interest on top of uncollected taxes.

Choose a software provider that can automatically monitor your tax obligations and collect the right amount of tax based on where your customers are located. Rather than manually reconciling thousands of transactions, you should be able to instantly surface all the information you need for each filing location so you can easily file and remit taxes on your own or with your accountant.

How Stripe can help

Stripe is a fully unified solution for SaaS businesses that gives you all the tools to help you make payment collection seamless, grow recurring revenue and reduce churn, and automate finance and streamline data.

Each of our products offers low- or no-code building blocks for you to combine in different ways, depending on what your customers need and what makes sense for your business. All the core payment building blocks—such as revenue recognition and analytics—are readily available and connected.

  • Stripe Billing provides a flexible way to manage subscriptions. You can start collecting one-time or recurring payments right away, and test and roll out changes right in the Dashboard or via our API. Using the same provider to process payments and bill subscribers allows you to deepen subscriber loyalty, increase revenue, and get better insights into your customers and revenue. You can accept cards, ACH payments, and a variety of payment methods to reach customers globally from day one. And when we integrate new payment methods, you can be confident they’ll work with Stripe Billing.
  • Stripe Invoicing is a global invoicing platform built to save you time and help you get paid faster. Create and send a Stripe-hosted invoice in minutes from the Dashboard, or use the Invoicing API and advanced features to automate how you collect and reconcile payments. Invoicing is integrated into the Stripe payments stack, so customers can automatically collect invoice payments with Smart Retries, email reminders, and automatic card updates, and reconcile ACH or wire payments.
  • Stripe Revenue Recognition takes the hassle out of accrual accounting, freeing your team to close the books quickly and more accurately. Automate and configure revenue reports to simplify compliance with ASC 606 and IFRS 15.
  • Stripe Tax reduces the complexity of global tax compliance so you can focus on growing your business. It automatically calculates and collects sales tax, VAT, and GST on more than 450 different product categories in all US states and more than 35 countries. Stripe Tax is built into Stripe, so you can get started faster.

Get in touch with our team to learn more about how Stripe can help you grow your business.

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