Regulated SaaS Companies Need a Different Approach to Growth. What Actually Works?

The conversation happens on nearly every discovery call we have with a leader tasked with optimizing SaaS or software for regulated industries. It starts with optimism about growth potential, then quickly shifts to the reality of their constraints.

Healthcare software companies can’t freely experiment with patient data. Financial technology firms face strict compliance requirements that limit onsite testing capabilities. Government contractors operate under security clearances that restrict user research. Insurance platforms must navigate complex regulatory frameworks. HR and ATS software handle sensitive employee data that requires careful privacy protection.

Experimentation seems nearly impossible under these circumstances, and the product-led growth strategies these teams see working for companies riding exponential growth waves like Linktree or Lovable can’t work for them.

These regulated SaaS companies still need to grow. They have the same fundamental challenges as any SaaS business: converting leads, reducing churn, and improving user experience. But the traditional growth toolkit doesn’t fit their reality, so let’s explore what can work.

The problem with product-led growth in regulated industries

Product-led growth has become the gold standard for SaaS success.

Companies like Canva, Grammarly, and Spotify have proven that letting users experience your product before purchasing leads to higher conversion rates, lower customer acquisition costs, and sustainable growth.

The strategy is to remove obstacles to product adoption, offer free trials or freemium versions, and let the product sell itself. These companies often move quickly and test new features relentlessly as a way to “hack” growth.

The product-led growth playbook includes:

• Free trials and freemium models that give users immediate product access
• Continuous A/B testing on live user experiences
• Extensive user tracking and behavioral analytics to optimize conversion funnels
• Rapid iteration based on user feedback and behavior data
• Self-service onboarding that guides users to their “aha moment“
• Viral growth loop, where users invite others or share content

And it works…for many. But regulated SaaS companies see these success stories and struggle to replicate them.

How do you offer a free trial for an HR tool that has to be rolled out across an entire organization to be useful? How do you minimize sign-up friction for a fintech software that requires bank information to function?

Experimenting with new features is too risky when system failure or emergency calling disruptions in telecommunications could result in massive fines.

Sometimes the stakes are too high for the product-led growth best practices that we see working in less-restrictive industries.

Regulated SaaS challenges are unique, and their growth solutions should be too

The challenges for this subset of SaaS companies are real and varied.

Compliance and privacy restrictions: Healthcare companies can’t freely test with patient data. Financial services face strict data handling requirements. Government contractors operate under security clearances.

Low traffic volume: Many regulated SaaS companies serve niche markets with limited user bases, making traditional A/B testing statistically impossible.

Long testing cycles: By the time regulated companies collect enough data from different regions and customer segments, it can take years to reach statistical significance. Different customers use different features across various geographical locations, making it difficult to design meaningful experiments that won’t disrupt service.

Risk-averse customers: Enterprise clients in regulated industries don’t want to be testing subjects for new features or experiences.

Resource constraints: Many regulated SaaS companies are highly technical but lack dedicated growth or UX teams.

Unique challenges require unique solutions, and that is what The Good can provide.

The alternative: off-site experiment-led growth

The solution isn’t to abandon growth optimization. It’s to use different methods that work within regulatory constraints.

This is where off-site experiment-led growth becomes the game-changer.

Experiment-led growth is a strategic approach that relies on continuous research, experimentation, and data-driven decision-making to drive business improvements. It allows teams to rapidly iterate on ideas that improve UX, marketing, and more.

Regulated SaaS can add an extra layer to experiment-led growth by taking things off-site or out of the product experience. Moving the growth tactics and experimentation away from the regulated environment and live user base gives teams the chance to make changes freely and quickly, gauge user reaction to those changes, and either launch with confidence or kill the ideas.

While product-led growth relies on in-product experimentation with real users, off-site experiment-led growth validates hypotheses and optimizes experiences before they ever touch your production environment. Instead of letting users test drive your product to discover value, you test drive your assumptions about users to deliver value immediately.

This approach flips the model to accommodate some of the restraints that regulated SaaS companies face. It’s no longer required to iterate on live systems with real customer data. There is an option to conduct experiments in controlled environments that don’t compromise compliance or risk customer relationships. You gather similar insights that drive product-led growth success, but through methods that work within constraints.

The result is a growth strategy that’s both data-driven and compliant, giving regulated SaaS companies access to the same optimization advantages that unrestricted companies enjoy, just through different means.

Off-site experiment-led growth tactics

Here are a few of the methods we use to deliver optimization outcomes for companies with the challenges and constraints outlined earlier in the article.

User testing

Because of the difficulty in getting customer data, there can be a disconnect between product teams and users.

Lookalike user testing solves this by bringing external participants who match the ideal customer profiles through your live experience. They complete tasks while thinking out loud, revealing friction points and confusion without exposing any sensitive data or requiring system changes.

This helps understand user behavior patterns, identify conversion barriers, and validate solutions, all without touching your production environment or compromising compliance.

AI-powered heatmaps and analytics

AI-generated heatmaps can predict user behavior with 92% accuracy without requiring any actual user data. These tools can analyze your interface and predict where users will look, what they’ll miss, and how long they’ll engage with different elements.

This is particularly valuable for regulated companies because you can understand user attention patterns and optimize layouts before the system is used.

Rapid testing

Experimentation is a proven way to get essential feedback on new features or website changes. And with A/B testing off the table in many regulated industries, rapid testing can fill in the gaps.

Unlike traditional A/B testing, rapid testing doesn’t require code changes, live traffic, or long research cycles. Instead, it uses a combination of techniques to validate hypotheses and inform decisions before anything goes live.

Rapid experimentation is not a one-size-fits-all process. Different scenarios call for different types of tests. Here are some common methods:

• First-click tests: First-click tests evaluate whether users can intuitively find the primary action or information on a page.
• Tree tests: Tree testing is a usability technique that helps you understand how users navigate through your website or app’s structure.
• 5-second tests: 5-second tests assess a user’s immediate impression of a design or message.
• Design surveys: Design surveys collect qualitative feedback on wireframes or mockups.
• Preference tests: This test involves showing users two or more design variations and asking which they prefer and why. It’s perfect for narrowing down visual or messaging options before launching a formal test.
• Card sorting: Card sorting is a research technique used to understand how users organize and categorize information.

These are just six of the many types of rapid experimentation.

While none deliver a 1:1 result when compared to A/B or multivariate testing, rapid experimentation offers a way for regulated SaaS companies to focus their development resources on work that has already shown positive signals from users.

For a tangible example, imagine a company struggling with positioning (a common challenge in technical, regulated industries). Five-second testing provides immediate feedback on messaging effectiveness. Users see your page for five seconds, then recall what they remember.

Competitive intelligence and market research

Structured competitive analysis and market research don’t require access to your own user base.

Understanding how competitors position themselves, what messaging resonates in your industry, and what user expectations exist can inform optimization decisions.

Also, gathering growth strategies from businesses in a similar industry with compliance or other restraints will offer a starting point to come up with new ideas that you can rapid test later on.

Getting started with optimization

Optimization can be intimidating and complex for regulated SaaS companies. Based on experiences working with teams like yours, here’s how to get started implementing growth optimization within your constraints.

1. Start with an audit or assessment of your current situation

Before making any changes, conduct a comprehensive audit of your current digital experience. This includes:

• Technical tracking setup to understand what data you can legally collect
• User journey mapping to identify critical conversion points
• Competitive analysis to understand industry standards and opportunities
• Stakeholder interviews to align on growth priorities and compliance requirements

2. Implement the methodologies we covered

Focus on techniques that provide insights without requiring on-site or in-product experimentation:

• User testing with 5-7 participants per user type (you’ll get 80% of insights from this small sample)
• Message testing to validate positioning and value propositions
• Prototype testing for new features or flows before development
• Heat mapping to understand attention patterns and interaction likelihood

3. Prioritize based on impact and compliance

Create a roadmap that balances growth potential with regulatory requirements. Focus on:

• High-impact, low-risk optimizations that don’t require system changes
• Messaging and positioning improvements that can be implemented quickly
• User experience enhancements that reduce friction without compromising security
• Qualification improvements to ensure you’re attracting the right prospects

4. Build your internal capabilities and outsource what you can’t

Many regulated SaaS companies lack dedicated growth resources. Consider:

• Training technical teams on user experience principles
• Establishing research processes that work within compliance frameworks
• Creating feedback loops between customer-facing teams and product development
• Implementing regular optimization cycles that don’t disrupt core operations
• Outsourcing what you just can’t manage internally

Growth within constraints isn’t impossible

Regulated SaaS companies don’t need to accept mediocre growth because of their constraints. They need different approaches that work within their reality.

The key is recognizing that optimization isn’t restricted to product-led strategies or A/B testing. Understanding your users, validating your assumptions, and making data-driven decisions can deliver outcomes that are just as impactful.

Whether you’re in healthcare, financial services, government, or any other regulated industry, growth optimization is possible. It just requires the right toolkit and a willingness to think beyond traditional approaches.

Making off-site experiment-led growth work within your regulatory constraints starts with a conversation. Learn what’s actually possible when you have the right methodology and expertise guiding your optimization efforts by getting in touch with our team.