CEO @ Pavilion | Co-Host of Topline Podcast | Join Top GTM Execs at Pavilion's GTM2024 | October 14-16 2024 | Austin, TX | Get Your Tickets Now
SaaS is going through an existential crisis. Gross Revenue Retention is the biggest factor driving the crisis (i.e. CHURN). If you want to improve churn, you need to focus on 3 different possible routes: They include improving your focus on: 1. Your ICP (Ideal Customer Profile) 2. Pricing and packaging 3. Your customer journey (from the moment they hit your homepage) Any one of these can potentially improve your retention. Forgetting about any one of them can be expensive and painful. Most companies are overly focused on #1 and #2. That's a mistake. You must remember to look at the basic mechanics of their customer onboarding and improving Time to Value. Yes, you should always improve your focus on ICP. But before you focus on pricing and packaging and create confusion among your customers, ensure you are optimizing your onboarding experience to maximize the probability of success of your customers. On today's episode of TOPLINE, Liz (Cain) Christo (Partner, Stage 2 Capital) joins us to share her unique perspectives on diagnosing retention issues. Listen here: https://lnkd.in/erHMTyHr
Its a crisis because the Short term -or - turnaround busines model that won SaaS such praise is not a viable business model anymore. If you're objective is to get acquired in 3-5 years, its a non-starter. And this is a good thing. I think SaaS in general represented a time and place ecomomically and technologically that has lost its feasibility. Whats daunting to me is this idea that a Customer Focus seems like some novel idea. We lost the plot so badly that actually focusing on Customers is being touted as some sort of discovery. Sustainable long term growth grounded in advocacy and loyalty is a more difficult model mainly because investors will have to extend their runway and metrics for returns. and revenue operations are showing positive signs of becoming more like factories or engines instead of high volume widget shops. the CRO role is now finding its groove as the true strategic leader that it should be.
I talk with dozens of Solutions/GTM leaders a month and we are hearing the same - Customer Journey/Experience is everything. Every single time we throw the ball over the fence from one department to another - it degrades customer trust and breaks they process. From SDR to CX: - We need to all use the same words/language. - Unified KPIs and Success Criteria - No more blind hand-offs Meet your buyer where they are - do they want 5 different people to sell, implement, and support them? No. They want a cohesive team rowing in the same direction.
Nailed it. Focusing on your ICP and tweaking pricing and packaging is crucial, but ignoring the customer journey, especially onboarding, can be a killer. It's like inviting someone over and then forgetting to show them around. First impressions count. Getting your customers to see value fast is key. When they experience the benefits quickly and without hassle, they're more likely to stick around. It’s not just about getting them through the door; it's about making them feel welcome, supported, and seeing the value right away. A well-thought-out onboarding process can make all the difference in retention. It reduces friction, builds confidence, and sets the stage for a lasting relationship. So before you mess with your pricing strategy, make sure your onboarding is smooth and effective. Happy customers stick around.
There's another angle to consider across all three of these focus areas: performance by-market. So many SaaS companies fail to have useful dashboards broken out by market, and miss the opportunity to address low hanging fruit in their priority international regions. Once you create your international dashboard, you'll most likely identify such issues as: monthly churn problems in India or paid conversion gaps in Brazil or acquisition opportunities in Japan. These insights are essential to create a priority map to solving customer on-boarding problems and removing friction points in your monetization flow.
A critical process that's part of #3 is the Sales to CS handoff. In far too many orgs this is overlooked and/or not given the attention it deserves because there is lack of alignment between the 2 teams. And if im being honest, Sales often isnt incentivized to care past the initial sale. This impacts onboarding (which directly impacts propensity to churn) and the customer experience at an important time in the customer journey.
I would say it another way as well Sam. Focus on the "Jobs to be Done" by your customer and assess whether your product helps address those jobs. Does your marketing material talk to that and do your sales and post sales team use language to help a customer realize how we solve their main pain points.
I've seen the stat that 80% of customers see a huge drop off in excitement/satisfaction when formally kicking off with a company. Growth at all costs ship sailed years ago
I heard that the market is weak now because it's waiting for the election results. What are your thoughts? Sam Jacobs
It is easy to look at ICP, pricing and packaging vs doing the hard work and honestly facing what the product is doing good and bad in meeting the customer needs. In addition, too many product leaders and founders do not listen enough to the customers or interpret incorrectly the customer needs. These areas represent great opportunities for companies to get better and differentiate.
Helping sales teams with customized insights and analysis of those that plan, buy, or sell media.
1moI know it’s not the same and this ( like most of my BS ) is tongue in cheek But think of a restaurant - First time customer - Delicious food - Great service - Etc Result = will return again. Will return again. X10 Damn now I’m telling people about it. Outcome = stay in business Opposite of the above bullet points = no return = go out of business