One of the hottest trends in the evolving SaaS playbook is the influence of Account-Based Selling (ABS) and Account-Based Sales Development (ABSD). The Account-Based approach changes two important aspects of growing a SaaS company: firstly, it changes business processes, and secondly, it changes organizational structures. The focus is to pull together Marketing, Sales, Customer Success, and Professional Services (and any other customer-related functions) to focus on “Accounts” instead of Leads or Customers with a holistic “account” focus.
A Synopsis of Changes to the SaaS Playbook
When it comes to systems and processes in the SaaS playbook, maybe less is better. I’ve heard a few complaints from various sources about the long laundry list of Lead Gen, Sales, Marketing, Customer Success, and sundry other apps that VCs often like to insist their portfolio companies buy before companies actually have the necessary processes to utilize and get value from these systems. This is sort of along the vein of VCs believing that adding salespeople will automatically result in additional revenue equal to the number added.
Unfortunately, many point solutions are siloed business process solutions that defeat the coordination of all customer-facing activities and organizations from lead gen through renewals and expansion.
- A best practice is to integrate systems tracking prospect and customer interactions first before signing up for new point solutions that promise everything from better leads to improved renewals. The bottom line is if you aren’t following up on the leads because they are in a separate system, it doesn’t matter how many new leads you have.
- Benchmarking supports getting everyone on the same page and identifies problems or weak points in your systems to be fixed before starting to add more systems and complexity. Make performance tracking and benchmarking against peers a basic component of regular management reviews as early in the process as possible.
Proper company organization needs to be in place. SaaS companies are rolling up the customer journey functions under a Chief Customer or Chief Revenue Officer. Many companies have this new role without putting the proper organization and systems in place. It can’t just be title inflation for the VP Sales, but rather an optimization of all the customer-related functions integrated together under one leadership.
- A best practice for the company organization is the CRO must be a great communicator to get all revenue-related functions aligned to the same mission and goals. The CRO must also be metrics-driven and obsessive about performance data. The data has to focus on measuring whether the revenue generation of a company is scalable and sustainable.
- The CRO needs to be a terrific diplomat and seasoned mediator and to bridge the cultural and process differences between marketing, sales, salesops, finance, and customer support – plus product and R&D groups. The CRO needs to always be working to focus the company on unified performance, not the domination of the process by any one group. One thing that hasn’t changed about the SaaS playbook is that there are many moving parts to the recurring revenue machine that need to work together—traditional software companies didn’t operate that way and it has taken time for many executives and processes to actually function well together.
SaaS success metrics are based on building a scalable, recurring revenue machine. The metrics that tell you how well you are doing this, I would argue, are very simple. Behind each of these simple metrics is a host of drivers that affect either the revenue growth rate or gross margin—or both. These metrics cover everything from sales, marketing, and product development productivity, to overall employee productivity.
- Measure your performance by measuring Revenue or ARR growth rates.
- Measure sustainability of your company by measuring Gross margin.
Benchmark Your Performance
OPEXEngine works with companies to lay out these performance drivers as well as benchmark them against peers and market leaders. If you’re interested in improving performance and operating efficiency through benchmarking, please contact us at firstname.lastname@example.org.