SaaStr Annual 2024: How to Maximize Your Revenue: Strategies to Stop Leaving Money on the Table with Capchase
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The document outlines strategies for maximizing revenue in B2B markets by addressing issues like stakeholder engagement, sales cycle length, and efficient pricing. It recommends offering flexible terms, minimizing revenue leakage, investing in automation for collections, and enhancing customer retention to combat rising customer acquisition costs. Furthermore, leveraging social selling and partnerships can significantly improve business outcomes.
SaaStr Annual 2024: How to Maximize Your Revenue: Strategies to Stop Leaving Money on the Table with Capchase
- 1. How to Maximize your Revenue: Stop leaving money on the table Maria Pereda Head of Partnerships Capchase Andrew Berger VP of Revenue Capchase
- 2. What’s stopping you from maximizing your revenue? Increased number of stakeholders Longer sales cycles, added scrutiny on contract decisions, high risk deals = Increased competition Heavy discounting, losing deals to terms, churned customers = Inefficiencies in process Revenue leakage, high CAC = Renewal delays Downsells to avoid churn =
- 3. things you should address in today’s B2B market to maximize revenue 5
- 5. Customers want to buy on their own terms Sales cycle lengths continue to increase New deals are taking 50% longer to close, than a year ago Average contract value and sales cycle correlation ACV < $5K = 40 days ACV > $100K, the cycle = 170 days Discounting for the sake of closing Average annual contract discount: 10-20% Average discount for multi-year contracts: 10-30% A surplus of tech options in today’s market gives customers the negotiating power
- 6. Make it easy to buy from you. ● Lean into product marketing to ensure you sell your value and know your competition ● Don’t be so quick to discount, understand the real objections first and bring in all stakeholders early ● Utilize innovative payment solutions such as buy now, pay later (BNPL) to offer the best buying experience without sacrificing revenue or losing deals to terms Recommendations Case study A: A $160M+ ARR AI-powered app-building platform started offering flexible terms and saw an increase in conversions on stagnant deals and closed more pipeline. 15% Increase in conversion stalled deals $2.5M+ In pipeline closed 70+ Deals closed Impact on business metrics in first few months
- 7. Focus on GTM efficiency
- 8. Customer acquisition costs are on the rise Companies are seeing a smaller revenue return on their marketing spend. CAC has outpaced LTV, having nearly halved. The median ARR per employee has increased by $20,000 from 2021 showing the focus has shifted to efficient growth. We analyzed financial health and growth data across thousands of companies to see how current trends are impacting companies differently based on their size
- 9. Recommendations Focus on efficient CAC spending, higher retention, and effective pricing to drive a healthy LTV/CAC. Don’t compromise growth by cutting GTM spend to reach profitability, instead consider alternative funding partners to efficiently fuel those initiatives. Incorporate tools that make it easier for sellers to sell. Make sure new tools seamlessly integrate with your core systems. If your product can support more markets, don’t let price be a barrier to entry.
- 11. Tighten collections Companies with ARR between $1 million and $9.9 million face the longest DSO and a greater risk of revenue leakage as unpaid invoices get lost or forgotten. 30% increase in Days Sales Outstanding from 2021 (from 31 to 40 days) Days Payable Outstanding has increased for all company sizes Cash Conversion Cycle has been steadily increasing since 2023 49% of invoices become overdue
- 12. ● Invest in quality tools for collection operations & take the burden off the team with automated workflows. ● The more manual the process is, the more room for error. Recommendations Case study B: A $6M+ ARR healthcare technology company invested in a high quality collections software to make their teams more efficient and take the burden off current staff resources. 50% Increase in customer size $1.5M+ In pipeline closed +130+ Deals closed Impact on business metrics in first few months
- 13. Invest in customer retention
- 14. Retention fuels real growth Monthly churn rates have increased compared to 1.1% in 2020 3.4% Renewals are taking 10% longer to close compared to last year (53 days on average) 10% Companies are using 200-300+ software applications today.
- 15. ● Get ahead of renewals: Automated deal creation with notifications in advance. ● Delight your customers: if they aren’t using your tool consistently they won’t renew or expand. ● Don’t confuse price with payment terms: make sure you’re solving the right problem. ○ If cash flow is the problem, a discount may not address it ○ If price is the problem, refocus on the value Recommendations Case study C: A nearly $300M ARR data experience public SaaS company added a new payments solution to save current customers by offering flexible terms at renewal. 30% Faster growth rate capturing stagnant deals $8M+ Additional pipeline closed +100 Leveraged deals Impact on business metrics in first few months
- 17. Sometimes it’s about who you know 40% of B2B buyers use social media to research before making a purchase 54% of B2B marketers generate leads from social media 39% of B2B companies have seen revenue from social media 31% of B2B professionals say social selling has helped them build stronger relationships with clients
- 18. Recommendations With AI and tools, SaaS buyers are overwhelmed with options. Focus on building brand trust and letting word of mouth sell for you. Leverage and build an advisor network Master the art of social-selling Invest in partnerships Turn to the experts - influencers, takeovers and more!
- 19. Key Takeaways
- 20. Key takeaways The biggest opportunity is deals not closing due to payment terms and pricing. Don’t try to put more people on billing and collections. Invest in automation solutions to avoid errors and increase efficiency. Incorporate tools that make it easier for sellers to sell. Make sure new tools seamlessly integrate with your core systems. NPS is a great indicator you’re doing something right, but NRR is the indicator that it’s paying off. Social selling, advisors and partnership networks can set you apart significantly from the competition.
- 21. Meet us at Booth #SG201
- 22. UP NEXT: The SaaS Benchmarks for Growth & How Pricing Can Accelerate This in 2024 and Beyond Andrew Davies Chief Marketing Officer Paddle Vivien Shao Pricing Consultant Price Intelligently by Paddle
Editor's Notes
- #2: Stats speakers can reference: First point: Net new deals take 50% longer to close now, than they did a year ago (48 days now vs. 32 days in 2023) - Vendr Q2 report Second point: discounts for annual contracts range from 10-30% with the average right around 18% Third point: 49% of invoices become overdue *according to PYMNTs report Last point: Renewal ACV has remained flat to slightly down compared YoY and QoQ and renewals are taking 10% longer to close than last year (at 53 days on average) → buyers are negotiating on price at renewals more - Vendr Q2 report
- #5: Companies are using 200-300+ software applications today. That is a lot of tools to go through the vetting, buying and renewal process for. Customers want flexibility because it’s strategic for them and they can demand it in today’s market, they have the negotiating power now with so many software options to consider. New deals are taking 50% longer to close, than they did a year ago (48 days now vs. 32 days in 2023) Would the price be an issue if the buyer could spread that cost out?
- #6: Lean into product marketing to ensure you sell your value and know your competition. This allows you to Differentiate your solution to narrow the playing field Make the decision based on more than just price Then when you get to the price discussion, price competitively Is your pricing aligned to the value you deliver? Utilize innovative payment solutions such as buy now, pay later (BNPL) to offer the best buying experience The optionality and a digital buying experience has become the norm as B2B catches up to B2C BNPL allows you to offer payment flexibility to your customers without sacrificing your revenue Once implemented revisit old deals, offering new flexible terms
- #14: Renewal ACV has remained flat to slightly down compared YoY and QoQ and renewals are taking 10% longer to close than last year (at 53 days on average) → buyers are negotiating on price at renewals more Average monthly churn rates have increased from 1.1% in 2020 to 3.4% in 2024 https://www.vitally.io/post/saas-churn-benchmarks#:~:text=SaaS%20churn%20rates%20have%20noticeably,or%20about%201.1%25%2Fmonth.&text=But%20those%20numbers%20have%20since%20shifted%20significantly.
- #15: Start hard conversations earlier; the renewal focus should start right after the deal closes not 30-60 days before their renewal date. If that’s the case, it’s too late. Are you obsessed with making your product “sticky” for your target customers? If you are, then you are developing the right enhancements and new features, making it hard for the customer to operate without your solution. Would the price be an issue if the buyer could spread that cost out?
- #17: https://optinmonster.com/social-selling-statistics/