Things can happen fast in the SaaS space.
Each business is aiming for quicker results and quicker growth. And when we hear about successful SaaS businesses, nine times out of ten, it’s the highest achievers being discussed—the unicorns multiplying their revenue at break-neck speeds.
When many SaaS executives think about ideas for increasing their own revenue growth, the first idea that comes to mind is often acquiring more new customers.
And that’s not wrong—the more customers in your base, the higher your business’s monthly recurring revenue (MRR) will be. However, this isn’t the only route you should ponder taking.
Sometimes, it’s worth considering some strategies that will also enable your SaaS business to build steady growth over time.
Stacking your marketing and sales teams can make it more likely for new customers to continue coming down the funnel. But have you ever considered how other roles within your organization could contribute to greater revenue, even if they’re not out there talking to new prospects?
There are a number of strategic departments and positions you can create or enhance to improve your SaaS business’s financial performance as it scales.
1. A dedicated representative for upselling current customers
The effort it takes to attempt closing a brand-new deal doesn’t always pay off. After all, the success rate of selling to a new customer is only around 5-20%.
And even successfully acquiring a new customer can be pricey, of course.
Meanwhile, selling to a customer you already have can increase your probability of making the sale by up to 14 times and can cost around five times less.
So, while making those new sales is an important part of scaling your SaaS business, hiring a marketing, sales, or account representative to focus specifically on upselling or cross-selling to your existing customers can also be a good investment for increasing your MRR over the long term.
Eric Chiang, Head of Marketing at GooseChase Adventures, saw evidence of this in action at his organization this past year.
GooseChase is a scavenger hunt platform used for corporate team building, conferences, and school-run university events. The business saw its revenue grow during the pandemic as existing customers turned to the platform to run remote employee engagement and appreciation activities.
“At GooseChase, hiring an account manager solely responsible for long-term subscription clients was pivotal to our recent stage of growth,” said Chiang. “A dedicated rep to support the clients who have put their trust in our platform over the long-term not only helps us give them dedicated attention, but also helps provide our product and marketing teams with pivotal insight to deeply understand the benefits of our service that most appeal to our power users.”
Expansion MRR adds to the value of your current customers. And that value can add up meaningfully over time.
Furthermore, as customers increase their usage and reliance on your products and services, they can realize more value for themselves and become more likely to stick around for the long term.
Within the SaaS industry, there’s a hot debate about which department should own upselling. Whether you feel it should be sales or customer success, hiring one person (or more) to be solely dedicated to upselling can correct any disjointed efforts.
Regardless of which department takes it on, good upselling should put the customer first and seek to fulfill their ever-growing and ever-changing needs.
2. A customer success representative to nurture smaller customers to growth
Customer success teams typically focus most of their efforts on their larger and more immediately lucrative accounts. But take a look at your smaller customers.
What kind of value are they achieving with your product currently, and how could you support them further?
With the right guidance from a dedicated customer success team member, your smallest customers could someday become your biggest.
Think about what a customer success representative does. Their role is to work proactively with current customers to solve issues—even before they arise. A good customer success representative retains customers and keeps them satisfied.
But a great one? They’ll transform your customers into advocates rather than simply users of your product.
Customers that realize value and feel valued become loyal. And by creating this loyalty and driving down churn among your smallest customer cohort, you’ll create more opportunity for these businesses to grow with you over time.
HubSpot—a hugely successful B2B SaaS business itself—has studied customer success trends in other SaaS businesses and found that growing companies are 21% more likely than those that have plateaued to say customer success is “very important”.
Brian Halligan, HubSpot’s CEO knows that the secret to getting ahead of the game in the B2B SaaS world is all about removing friction for the customer. And that’s where your customer success team comes in.
Before, your product needed to be ten times better than the competition's. Now, your customer experience must be ten times lighter than the competition's, Halligan has said.
So, why should these efforts only go toward your bigger customers?
Hiring a customer success representative dedicated to nurturing your smaller customers with the same level of attention as the big guys will ensure those accounts continue building lifetime value (LTV)—and expansion MRR, ideally—as they grow.
3. Bring in managers to own success in different departments
An effective manager does a lot within a department. But when it comes to how they can contribute to your SaaS business’s MRR growth over the long term, you’ll want to bring in a manager who can provide the department with very clear direction.
Filling—or refilling—management roles in your sales, marketing, and customer success departments with people who can really own the departments’ performance will ultimately lead to better financial results.
The right leaders will work strategically to develop clear objectives for the members of their teams and then motivate and inspire employees to get there.
A past study separated managers into the bottom 10% (poor leaders), the middle 80% (good leaders), and the top 10% (great leaders). The results showed poor leaders were actually costing businesses money, while great leaders helped to bring in double the profits compared to good leaders!
Extraordinary leadership is a critical key to increasing profits over time.
Planning for the future: Long-term strategies increase long-term MRR
Speedy growth definitely seems to be a recurring trait among the most successful SaaS businesses today. But that doesn’t mean there isn’t room for slow and steady growth as well.
When looking for new ways to improve MRR growth for your SaaS business, it’s important to consider consistent long-term strategies that will complement your shorter-term efforts and increase your numbers over time. And hiring dedicated team members to own these strategies and drive results can make a huge difference.
Each employee plays a role in the financial success of your SaaS business. Being strategic in the way your business is staffed and organized can help you build more consistent and reliable MRR growth in the long run.