Growing a SaaS business doesn’t mean doing everything—it means focusing on what matters most.

The 80/20 rule (Pareto Principle) states that 80% of results come from 20% of efforts. In SaaS, this means that a small number of actions drive the majority of growth.

This blog breaks down the key areas where SaaS owners should focus their time and resources to scale faster and avoid distractions.

1. Focus on Activation, Not Just Acquisition

Most SaaS owners spend time on getting more signups, but the real key to growth is getting users to activate.

• If users sign up but don’t take action, they won’t stay long-term.
• Activation has a bigger impact on retention and revenue than acquisition.
  
  

What moves the needle:

• Optimize the onboarding process for quick wins
• Track the activation rate (users who complete a key action)
• Send personalized email/SMS follow-ups to inactive users

   

A small improvement in activation reduces churn and increases retention, leading to long-term growth.

2. Increase Expansion Revenue Instead of Relying on New Sales

Acquiring a new customer is 5-7x more expensive than upselling an existing one.

Most SaaS businesses focus too much on new signups and not enough on upgrading existing users.

What moves the needle:

• Add higher-tier plans with premium features
• Introduce add-ons and upsells to increase monthly revenue
• Offer annual billing to lock in long-term commitments

   

Growth doesn’t just come from more customers—it comes from making each customer more valuable over time.

3. Fix Churn Before Scaling Marketing

If you are spending money on ads while your churn rate is high, you are pouring water into a leaking bucket.

• A 5% increase in retention can increase profits by 25-95%
• Reducing churn makes every marketing dollar more effective
  
  

What moves the needle:

• Offer white-glove onboarding for high-ticket clients
• Create an in-app tutorial or guided setup checklist
• Track why clients cancel and fix the biggest pain points

   

Fix churn first—then scale marketing.

4. Optimize Pricing for Maximum Profitability

Many SaaS owners undercharge or fail to structure pricing correctly.

What moves the needle:

• Use tiered pricing to encourage upgrades
• Charge based on value, not features
• Offer a money-back guarantee to reduce risk

   

Testing different pricing models can have a bigger impact on revenue than acquiring more users.

5. Focus on the Right Acquisition Channels

Not all traffic sources convert equally. The 80/20 rule applies to lead generation—most clients will come from a few key channels.

What moves the needle:

• Double down on the top 1-2 traffic sources that bring in high-quality leads
• Automate lead nurturing to increase conversions
• Optimize landing pages for conversions instead of just driving traffic

Final Thoughts

The fastest way to grow a SaaS business isn’t doing more things—it’s focusing on what moves the needle.

Where will you apply the 80/20 rule in your SaaS growth strategy?