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Forbes
23-07-2025
- Business
- Forbes
How Digital Trust And Safety Became A Growth Strategy
Terry Chen, COO & CIO @ Modulate, Board Member of Marketplace Risk & ECPAT International. A decade ago, content moderation was viewed as a housekeeping chore that followed product launches and marketing pushes. Today, it is a board-level priority that directly influences customer lifetime value, regulatory exposure and investor confidence. Across gaming, healthcare, fintech, e-commerce and social media, robust trust and safety programs are being treated not as expense lines but as engines of growth. The Business Case Widens Users now spend more time online than watching television, and their expectations have matured. They expect private data to stay private, transactions to complete without fraud and conversations to proceed without harassment—particularly from bad actors using hate speech, threats, cyberbullying and toxic behavior that can include everything from verbal abuse to coordinated harassment campaigns. When those expectations are met, revenue follows. Research by Everest Group identifies trust and safety (T&S) services as a fast-growing business process services market segment, projecting the industry will accelerate to 60% to 68% growth this year and beyond. Avasant's research (registration required) shows the current market demonstrates significant growth potential, with more than 5.4 billion internet users, significantly augmented and enhanced by generative artificial intelligence (AI) and various content automation tools. An ecosystem has emerged to meet that demand. For example, Resolver's trust intelligence platform, recently augmented by the acquisition of Crisp, gives brand-protection teams real-time alerts when counterfeit goods, extremist propaganda or insider data leaks appear. ActiveFence provides multilingual threat detection that detects livestreamed violence or hate speech before it reaches audiences. Nonprofits such as the Family Online Safety Institute convene companies and policymakers to refine best practices, while the Trust and Safety Professional Association (TSPA) offers certification programs for a growing cadre of professionals. (Full disclosure: I am a member of TSPA.) Proactive Measures That Pay Leading companies have moved beyond reactive takedowns toward prevention. Consider the global game publisher that integrated an AI voice-chat monitoring system across its flagship shooter franchise last year. The tool flags toxic speech as it happens and guides moderators to the worst incidents first. Within three months, repeat harassment fell 8% each month, and player exposure to abusive voice chat was cut nearly in half. According to research, games with less toxicity have a 16% higher player retention rate over toxic games, while gaming businesses with high player retention rates achieve revenue growth that is 50% higher than those with low retention rates. Academic research shows that toxic players drive away new players, but that experienced players are more resilient to deviant behavior. E-commerce platforms are taking similar steps. Sophisticated image recognition now spots counterfeit goods or intellectual-property theft before listings go live. Fraud-anomaly engines evaluate hundreds of signals per transaction, from device fingerprint to shopping behavior. The payoff is hard to ignore: According to Juniper Research, e-commerce losses to online payment fraud are expected to reach $206 billion this year. Each percentage point of additional detection could save millions. Fintech firms strengthen know-your-customer checks through behavioral biometrics, confirming that the account owner, rather than a bot, is typing or tapping. Healthcare systems deploy anomaly detection on electronic health record databases, guarding patient data and avoiding costly breaches—IBM's Cost of a Data Breach Report 2024 found the average healthcare data breach reached $9.77 million in 2024. A Falcon's Lesson On Precision In any discussion of speed and threat detection, biologists often mention the peregrine falcon. According to research documented by the Cornell Lab of Ornithology and National Geographic, peregrine falcons have been clocked at speeds exceeding 240 mph (386 km/h), and they can spot prey from great heights before diving with lethal precision. All the while, they adjust their trajectory to wind shifts and target movement. Effective trust and safety programs function in a similar triad of sight, speed and precision. They scan vast data streams for early signals, react instantly and intervene only where necessary, leaving legitimate users undisturbed. This underscores why piecemeal or slow-moving safety efforts cannot keep up with modern risks. Age Assurance And Youth Protection The European Union's Digital Services Act and the United States' COPPA statute both require platforms to restrict certain content and data collection for children. Failure can be ruinous: As an example, in 2022, the U.S. Department of Justice announced that Epic Games agreed to pay $275 million in civil penalties, the largest civil penalty ever imposed for a COPPA violation. Some companies are now pursuing frictionless age estimation that works in seconds, uses minimal personal data and preserves user experience. The result is compliance without the conversion drop that plagued older document-upload methods. Regulatory Headwinds Turned Tailwinds Regulatory fines have become large enough to attract the CFO's attention. The Digital Services Act allows penalties of up to 6% of global turnover for illegal-content failures; the General Data Protection Regulation can impose 4% of worldwide revenue for privacy breaches. HIPAA violations in the United States can cost up to $1.5 million per year per category. Yet a strong safety posture can convert compliance into advantage. Firms that demonstrate proactive controls often receive lighter scrutiny and gain faster approvals for new services. PwC's Trust Survey research indicates that companies with mature trust and safety operations report stronger investor confidence, with 41% of executives saying the cost of capital is at risk if investors don't trust their company; 38% say access to capital and 38% say market value is at risk. Counting The Returns Fraud Prevention: Reduced chargebacks and stolen-account losses drop straight to operating profit. User Retention: Players and shoppers who feel protected are more likely to stay longer, spend more and refer friends. Advertiser Confidence: Brands flee toxic environments. Clean ecosystems attract premium ad rates. Operational Efficiency: AI triage lets human moderators focus on high-stakes cases, lowering head count stress and costs. Regulatory Buffer: Audit trails and documented policies can shorten investigations and potentially reduce fines. Executive Playbook Tie safety to core key performance indicators: Track fraud dollars averted, retention lifts and ad-revenue changes after safety upgrades. Hardwire compliance early: Map each user flow to its regulatory obligations so safeguards are embedded, not retrofitted. Leverage specialists: External platforms can deliver scale and expertise faster than home-grown builds. Foster a safety culture: Regular tabletop drills and continuing education keep staff alert to new threat vectors. Report to the board: Translate safety outcomes into financial language. Demonstrating a tangible return on investment can help secure sustained investment. The Road Ahead Digital interaction will only intensify. Artificial intelligence tools generate convincing deepfakes, fraud rings migrate from credit cards to loyalty points, and geopolitical conflicts spill into online spaces. Companies that match the peregrine's vigilance and agility will be positioned to convert those challenges into strategic gains. Those that lag will struggle to acquire users, attract advertisers and obtain regulatory clearance. Trust and safety, once a footnote in annual reports, is now essential infrastructure. Finance leaders who treat it as a growth lever will better protect their customers and unlock new revenue streams in a single stroke. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Forbes
12-05-2025
- Business
- Forbes
Boosting ARR In B2B SaaS: A Founder's Journey To Sustainable Growth
Terry Chen, CIO / COO / VP, Global Relations at Modulate. getty I still remember the evening I stared at our startup's dashboard, heart sinking as our growth plateaued. As a software as a service (SaaS) founder, I had poured every ounce of energy into acquiring new customers, yet our annual recurring revenue (ARR) was stubbornly flat. It felt like trying to fill a leaky bucket—new deals came in, but revenue leaked out through downgrades and churn. One night, after losing a hard-won client due to avoidable issues, I realized growth isn't just about getting more customers; it is about delivering more value to the ones you already have. Thus began my journey to rethink everything: pricing, customer success, upsells, retention and how we acquired users. What follows are the hard-won strategies that transformed our ARR trajectory. These are not silver bullets or flashy hacks but proven tactics any SaaS founder or revenue leader can execute to steadily and sustainably boost ARR. Pricing is one of the most powerful—and underutilized—levers in SaaS. A 1% improvement in price can improve operating profit by up to 11%. And yet, many startups set their pricing by gut instinct instead of strategy. Adopt value-based pricing: We moved from cost-plus to value-based pricing, aligning prices with customer outcomes, not just features. This helped us avoid underpricing while better reflecting the return on investment (ROI) we delivered. Optimize packaging and tiers: We restructured our plans to match customer segments. Tiered pricing created natural upgrade paths and allowed us to better serve both startups and enterprises. Experiment and iterate: We ran controlled A/B tests and periodic price reviews. Even minor tweaks—bundling, discount ladders, trial durations—had a significant impact on conversion and average contract value. Takeaway: Treat pricing like a product: Test, evolve and ensure it reflects the value you're delivering. Retention is the bedrock of ARR growth. A 5% increase in retention can boost profits by 25% to 95%. For us, the shift came when we built out customer success (CS) not as a support function but as a strategic pillar. Build a proactive CS team: Instead of waiting for issues, our CS managers anticipated needs, trained customers and aligned on their success metrics. This shifted the conversation from troubleshooting to value delivery. Strengthen onboarding: We invested in user onboarding and guided setup, one of the biggest indicators of long-term retention. Users who saw success early rarely churned. Drive continuous value: With usage-based health scores and feature engagement tracking, we could detect when accounts were slipping and intervene. This not only reduced churn but surfaced upsell opportunities. Takeaway: Don't just solve problems. Enable success. Happy customers don't just stay—they grow. Once retention stabilized, expansion revenue became the next growth frontier. In my experience in tech and corporate strategy, I've noted that many top SaaS firms earn the majority of new ARR from existing customers. We aimed to follow that path. Identify upgrade candidates: By analyzing product usage, we found customers approaching tier limits and proactively proposed higher plans, often with tailored offers. Introduce add-ons: We built modular features (analytics, integrations, compliance tools) that could be added à la carte. This provided upsell paths without forcing users to jump tiers. Make it easy to upgrade: In-app upgrade flows, trials of premium features and CS-led quarterly business reviews (QBRs) created a frictionless path to increased spend. Takeaway: Upsells work best when tied to real value. If your customer is growing, your relationship should too. No SaaS grows on retention alone. We needed to feed the top of the funnel—but with limited budget, we focused on scalable, repeatable acquisition tactics. Product-Led Growth: We leaned into a freemium model that let users self-educate. Our best leads often came from free users who converted after real engagement. Referral Programs: Inspired by viral loops like Dropbox's, we rewarded customers for inviting others. Referral-origin customers were often the stickiest. Content-Driven Inbound: We built a content engine—guides, benchmarks, case studies—designed to rank and attract our ideal customer profile (ICP). Over time, it became our top source of qualified leads. Takeaway: Acquisition doesn't have to be expensive—if your product, content and customers do the talking for you. ARR doesn't grow linearly—it accelerates when the right systems reinforce each other. • Strategic pricing makes every deal worth more. • Customer success protects that revenue and deepens relationships. • Expansion strategies grow the lifetime value (LTV) of your existing base. • Scalable acquisition fills the funnel with high-quality leads. The turning point for us wasn't any single tactic. It was realizing that ARR is the output of an engine, and that engine needs to be optimized at every stage. Once we did, revenue climbed faster, churn fell, and the business felt infinitely more resilient. If you're a B2B SaaS founder wondering where to focus next, start with value—price for it, deliver it, protect it, and let your best customers carry the story forward. Here's to building something worth staying for—and paying for. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
