How to Solve SaaS International Expansion Challenges

Why should your SaaS business expand internationally?

The dynamic characteristic of SaaS lends itself to lucrative international expansion. Here are some of the reasons why firms should consider taking their growth strategy into overseas markets:

Boast a competitive edge

Entering a new market means familiarizing yourself with a new customer base. Developing a thorough understanding of local customers in a new market will allow you to focus on their expectations from your service, giving your firm a competitive edge by meeting their exact needs. Customer success can depend on how well your company leverages any competitive opportunities, so prioritize understanding your own proposition perfectly in a new, international market!

Increase your conversion rates & revenue

International b2c and b2b SaaS expansion can increase your conversion rates and revenue. A conversion-boosting growth strategy requires adapting your SaaS product or service to different languages, cultures, and market nuances, all of which will help you to resonate with local customers in foreign markets. As you expand your customer base, your revenue potential will grow, while simultaneously diversifying your revenue streams - setting the foundations of your global business model. 

Lose less revenue to churn

International expansion can help reduce revenue lost to churn, and this is a key factor that many SaaS companies contend against. By expanding in new markets, you can offset potential customer churn in your domestic market - whereas without expansion, if a significant portion of your revenue comes from a single market, any downturn or loss of customers in that market can have a severe impact on your business. When you diversify geographically, you spread the risk across foreign markets and in turn, this lessens the overall impact of churn. 

This method of diversification also allows you to learn from different markets and implement a progressive growth strategy to improve customer retention across all regions, reducing overall churn rate.

9 common challenges of SaaS international expansion 

To help establish a solid foothold for your SaaS international expansion plans in the early stages, we’ve outlined some of the main challenges your company could face below. Find out how our b2b software can help to solve these issues with smart, built-in capabilities. 

How to go global successfully

When you’ve decided it’s the right time for your SaaS global market pursuit, the next step is to come up with an approach that ensures success. There’s an art to successful global expansion, but crafting an effective strategy can be simplified into a selection of core components - and we’ve shared these below. 

Conduct in- depth market research

When embarking on global expansion, thorough market research is a must. Understanding the target markets' dynamics, customer needs, and competitive landscape is essential.

Approaching a new market without this knowledge could have a long-lasting, negative impact on your brand, and you risk alienating your service. Instead, opt for a research approach that encompasses factors beyond consumption habits - branch out and explore cultural nuances, regulatory requirements, and local market preferences, then tailor your SaaS offering accordingly.

Don’t underestimate the importance of localization

Localization plays a vital role in global success, as it’s the key to making your service accessible to customers in new markets. By aligning your SaaS offering to suit the local language, cultural context, and user experience expectations of the target market, you will give your audience more natural ways to engage with your service. 

Other elements of a localization growth strategy include: 

• Translating the software interface and support materials - choose a reliable tool or agency to ensure seamless translation into the native language.
• Offer regional pricing models and payment options - use your research into local market conventions to inform these decisions.
• Form strategic partnerships with local providers - opting to work with local technology companies who have existing market knowledge and customer networks will help to accelerate market penetration

Invest in native salesforce & support colleagues

Investing in multilingual customer support teams is a key aspect of building strong customer relationships. Providing localized customer support, training, and onboarding experiences in multiple time zones and in the native language will enhance customer satisfaction and loyalty - boosting your reputation in the market you’ve entered. 

Don’t be afraid to refine your operations

To maintain product or service relevance, SaaS tech companies should be open to learning from each unique dynamics of international markets’. Being responsive to customer feedback, staying ahead of industry trends, and continuously refining the product or service based on market demands are essential pillars for sustainable growth in global markets.

How Kaleido increased monthly customer growth by 20%

Want a real-life example of how our platform has supported SaaS international expansion efforts? Paddle helped to make subscriptions the fastest-growing revenue segment for visual AI market leader, Kaleido. After millions of users accessed the initial free release, the Kaleido team put plans in motion to monetize the product – but with paying global audiences in Europe, Germany, Japan and beyond came tax compliance considerations, and the business needed a streamlined, hassle-free solution. 

Choosing Paddle to manage this aspect of operations triggered a monthly customer growth uptake of 20%, and within 18 months the business has secured 43,000 paying customers from 181 countries. Our team worked closely with Kaleido to adapt and grow its revenue strategy, and each new tactic only served to strengthen its global company presence.

Begin your SaaS international expansion journey with Paddle

Ready to embark upon new markets? To enable you to focus on growing your international strategy, we’ve built an ultra-capable SaaS platform to streamline everything from payment collection to tax reporting and returns. We’re here to help you to focus on what matters, while we take care of the practicalities that come with success in foreign markets. Ready to take your services to new markets? You can get started in a few simple steps online now.

SaaS international expansion FAQs

Can all SaaS businesses scale internationally? 

While it is technically possible for all SaaS businesses to scale internationally, not all be able to access the same growth opportunities. The nature of the SaaS service and its suitability for different markets tends to be the deciding factor, as the product appeal may be limited to a specific niche. Geography can also infringe on the success of SaaS international expansion plans, as the service provided may not be compatible with certain regions.

Additionally, the resources, capabilities, and readiness of the SaaS business itself, including factors like financial stability, scalability of infrastructure, and availability of talent, play a crucial role. 

What are the benefits of expanding business internationally for SaaS companies?

A considered approach to SaaS global expansion presents a wide range of benefits for tech companies. US companies can tailor an impactful global presence by partnering with local firms, hiring native support teams, and respecting cultural conventions, all showcasing its commitment to overseas customers. Alongside these benefits, companies are also able to reduce their reliance on a single revenue stream, making them more adaptable to economic shifts. Finally, firms have the opportunity to service key market gaps, providing their product in an area where demand is high.