3 Reasons DocuSign Is One of the Most Sustainable Success Stories in SaaS
Add DocuSign to the list of companies that unlocked new-found growth during the pandemic. With everyone working from home, eSignature become a must-have. But is it poised for continued growth? A deep focus on customer success makes it a sustainable SaaS success story.
DocuSign Inc. experienced explosive growth during the pandemic — its stock surged 200% in 2020 alone. The company, which launched in 2003, has grown largely by word-of-mouth, and the company has been seeing early success in client adoption of its new services. But like other companies that exploded during the pandemic, such as Zoom and Peloton, you have to wonder whether or not the massive success is sustainable.
At DocuSign’s virtual 2021 Financial Analyst Day in March, Chief Executive Officer Dan Springer said the growth the company has experienced in its eSignature product was largely due to demand from the pandemic. “In fiscal year ‘21, our customers came to us and they fundamentally said we need signature and we need it now,” he said. “Because of the pandemic they had so many use cases and business processes they just had to get online and we were, of course, pleased to really ramp up.”
DocuSign doesn’t expect that growth to wane any time soon. In 2022, Springer expects demand for its Agreement Cloud services to increase as well and says the company’s room for growth there is massive. There are many decisions the company’s leadership has made that have led to this point. Here are a few that have been key to creating a strong foundation for DocuSign to grow and solidify its longevity.
1. They Remain Committed to Customer Success
DocuSign reported a net dollar retention rate of 123% for the previous fiscal year during its 2021 Financial Analyst Day, which Springer attributes to company leadership’s attention to customer success.
“If you’re a SaaS company and you’re not heavily focused on customer success, you’re really missing the boat,” he said. “I think what’s special about DocuSign is we’ve not only made it a part of our business driver, we’ve made it a part of our culture. Our employees are so proud to work at a company that is so focused on customer success that we not only don’t get a lot of customer attrition, we don’t get a lot of employee attrition.”
Springer said metrics like net revenue retention rate are a fantastic indicator that the company is getting it right when it comes to customer adoption, and that’s because they invest more into customer success than any other part of the company. Cynthia Gaylor, DocuSign’s chief financial officer, said that while their strategy is digital-first for customers, internally the company has a customer-first culture. It’s that customer support the company is so well known for that helps boost their land-and-expand customer acquisition strategy.
Part of how DocuSign keeps customer success high is by ensuring they see high adoption rates for their initial use case, allowing them to see the product’s benefits on business efficiency. DocuSign then helps customers apply its eSignature services to other areas of their business that can be optimized before finding new opportunities throughout the customer’s organization where other Agreement Cloud products can be implemented.
2. Their Product Creates a Natural Flywheel
Those who sign documents using DocuSign aren’t required to be subscribers of the product and, because of that, almost a billion people throughout the world have used the service. Often this initial exposure to the DocuSign brand is due to a positive experience in someone’s life, such as purchasing a house or signing a job offer.
DocuSign Chief Revenue Officer Loren Alhadeff said it’s this tremendous brand recognition that has helped them reach new customers. He said many of their customers have learned about their services simply through signing a document and then seeking more information about the company’s offerings. This simple exposure results in hundreds of thousands of trials each month that leads to paid digital customers.
“When people think of eSignature, of course they think of DocuSign,” Alhadeff said. “And as they use our products, and send out agreements to be signed, they broaden DocuSign’s exposure to customers and non-customers alike. When those agreements move back and forth around the world, they drive people to our website and digital channel where they can trial the product or immediately buy it.”
Combine this brand recognition with DocuSign’s high level of customer service, and the company’s customers become its advocates. All this free advertising is positive for the company’s customer acquisition costs and adds to the stability of DocuSign’s product and its business.
3. They Create New Opportunities for Growth
The original product-market fit for DocuSign’s eSignature product was great to begin with — it’s a tool that can be used to improve workflows for nearly any business, whether they use it for operations, legal, or sales and marketing. Springer said the company’s focus has been on meeting the needs for its market fit with a fantastic product. With the launch of the Agreement Cloud, DocuSign has a huge opportunity in terms of scalability.
Other products DocuSign added in recent years, like Analyzer, Notary, CLM, Insight, and Monitor, have helped bolster their eSignature product by making it more attractive to potential customers. For example, Analyzer helps users mitigate and reduce risk in their agreements, and Monitor helps prevent fraud. Now, in addition to making business more efficient, DocuSign is also helping increase its customers’ sense of security — figuratively and literally. During an investor presentation, Springer said:
“I don’t think we’re just building a great software company, although I do think we’re doing that, I think we’re building a category. And I think we have an opportunity. When we will look back 5 years from now, we’ll say to ourselves, ‘There’s a category. There’s a software category for the Agreement Cloud.’ It did not exist before our company, and there will be other players in it — it won’t just be us — there will be other players in the space for sure — but they’ll all say they’re Agreement Cloud companies.”
Currently, the company has over 892,000 customers. And although DocuSign is already the market leader in agreement software with its eSignature product, the company’s ability to expand its total addressable market with new products is massive. The company reported that its TAM for its Agreement Cloud is $50 billion during its 2021 Financial Analyst Day, $26 billion of which is for the eSignature product.
A Focus on Customers and Their Needs Helps DocuSign Win
DocuSign’s commitment to providing great service and ensuring its customers’ success has helped the brand become a household name — something the company has learned to use to its advantage to create a robust sales pipeline.
Clients in industries such as real estate became devotees of the product early on, recommending it to others for years. With the addition of new products and features, not only can DocuSign increase revenue among existing clients, but they can also reach new customers whose needs go beyond the eSignature product.
By keeping customer success a foundational tenet for the company, Springer says he believes DocuSign will see fantastic results for years to come.
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