Last year I attended SaaStr, a conference for B2B and software brands. I took copious notes, and to date, my social posts around the insights at SaaStr have been viewed hundreds of thousands of times.
Here were all of my key takeaways from the industries top experts...
- Averages hide the insights. This one really hit home. At Bonjoro, one month our open rates were way down. We figured it must be from an IP reputation issue. In actuality, one very large client had done some poor sending at higher volumes and that had hit the overall average. Oftentimes, several high-performing customer cohorts can hide problems or issues from a few low-performing cohorts when looking at high-level data (trial conversions, retention etc.)
- Do things that don’t seem scalable. ActiveCampaign offered free migrations. Seems crazy time-intensive, but if you do the math from CLTV it just makes sense. ActiveCampaign grabbed massive market share with bold non-scalable moves like this.
- Usage-based pricing and companies moving from products to platforms/marketplaces was a huge recurring theme. Both VC’s and many several unicorn risks.
- If you sell to enterprise, you want to target 100%+ NRR (Net Revenue Retention) and if you sell to SMBs you want to target 75%+ NRR (Hubspot pre-IPO had 83% NRR). To do this, you need to have the following: high investment in onboarding and CS, land and expand product model with upsell opportunities, ideally several product offerings, strong NPS/CSAT.
- Quarterly and annual contracts are highly impactful for scaleable growth. CLTV is 100-300% vs. MoM. Also, you need to ask for annual upgrades beyond sign-up. 2-10 months is the sweet spot when they are experiencing value.
- Always offer maintenance/pause plans for people looking to leave. Charge $10-50 to just hold their data
- Localization, if you have more than 20% of your user base outside your home region, increases revenue by 10-20%.
- Retention for users that upgraded to paid from a freemium plan, is over 10% higher.
- Offer add-ons in your SaaS pricing. CLTV is 18-54% higher for customers who buy add-ons.
- SaaS brands that have usage-based pricing, have baked in expansion revenue potential, vs. having to “re-sell” the customer on additional upgrades.
- You should be able to recover 60-80% of defaulted credit cards. If you aren’t, you need to put systems into place to catch that. Try in-app messages and SMS. Localization can help. Don’t make the user log in to update CC. Just take them straight from a link to form and make it easy.
- If you want to target enterprise, you need to build for enterprise. Vimeo’s CEO recommended SLAs, User level Analytics, CRM IMAP, SSO etc.
- Huge problem right now in SaaS is people are only using 50% of the platforms they pay for. Churn and NRR issue. To fix, reward your team more for expansion revenue than initial revenue.
- Your team needs to rally around a Product-to-Market fit statement in the $1-10m ARR range. Slack used, “we need 70% of our users to send 2000 messages in the first 30 days”. In 16 months went from 23 -> 73% and hit exponential growth. Aggressively work to hit this metric to establish PM fit. In the early days spend as much time as possible to hit your rallying metric.
- For PLG to work, you need to prioritize features that relate to effective onboarding if you haven’t yet hit your rallying metric discussed above.
- For PLG (Product-led-Growth) to work, you need SHARED goals between Product and Marketing. Product and marketing should be in meetings on a regular basis discussing progress to mutual KPIs.
- Obsess over onboarding and the first few minutes of the user experience. This is incredibly important for PLG.
- In PLG, you need to have a fast testing methodology. If you can’t add and remove features quickly, you won’t succeed with PLG.
- Partnerships can help you scale. Liveramp doubled down on Salesforce Integration and that helped them dominate the mid-market. We have seen the same thing at Bonjoro. When we first approached ActiveCampaign, we had a few hundred mutual customers. As of 2022, we have now have thousands.
- Showcase your product in an interactive demo if possible (PLG) on the site.
- Growing from a single product to a platform is often crucial to scaling. Some keys to success here are: Find partners who want your product built into their product. Make sure they will co-market with you. You need a product design engineering team focused ONLY on the platform play. Documentation needs to be built for adopters (Like a site marketing to developers in Twilio’s case). New users must be able to experiment with the platform play without commitment. Make it self-serve.