How to bring greater consistency to growth and scale.

Knowing where to focus is the secret to accelerating revenue growth?

There are two key levers to growing a SaaS company — you can accelerate customer acquisition and/or you can expand revenue within your existing customer base. But often times it can be hard to know where to focus in order to maximize revenue growth.

I believe that growth is a team sport, one that involves product, marketing, sales and customer success teams to create demand, build consistent demand pipelines and convert demand into revenue. You can read more about the team approach in this article.

For the purpose of this article, I am going to assume that you have successfully “created demand” for your product/solution. Creating demand for your product means that you are solving a problem that your target audience and their company in general has identified as something that warrants spending resources to fix. To this end I am focusing the discussion on revenue growth.

The concept of a revenue growth funnel or customer journey is familiar to anyone who has worked in sales or marketing for a while. I like to lay it out like this:

Most organizations tend to focus their attention on the customer acquisition stages of the funnel, because it’s where most of the sales and marketing expenses are. However, this leads to neglecting the customer retention stages of the funnel, even though it’s where most of the profit is created:

This issue is further complicated by organizational design, as product, sales, marketing and customer success teams are typically siloed under departmental VPs, each of whom reports to the CEO or COO and focuses primarily on the one or two metrics they can fully control:

This creates a challenge for the C-leader as they have to align disparate efforts to drive consistent growth. It’s very easy to get pulled in the wrong direction by one-off pieces of information, one-off conversations or ad-hoc analyses — and make the wrong decisions.

The Full Funnel Model is a framework for solving this.

The Full Funnel Model brings together the metrics that each team is tracking into a unified set of growth metrics that gives the whole go-to-market team visibility into how each stage of the funnel is performing.

The model is made up of the following growth metrics, which are fairly straightforward to calculate.

Once you’ve calculated your revenue growth metrics you will have baselines from which to work. The next step is to identify which of your growth metrics to focus on and what underlying issue is driving it.

Here are some of the most common issues I’ve seen at each stage of the funnel, and the strategies for addressing them.

If Prospect to MQL <10%, top issues + strategies are:

Targeting too broadly. Refine your ideal customer profile to focus on the group of prospects most similar to your current customers. Limit the size of the group to 10x the size of your current customer base to force prioritization.

Messaging too cryptically. Ensure your messaging speaks directly to your prospects’ problems rather than to your product features or to broader market trends. Get better at understanding the priority initiative that explains the compelling reason that buyers decide to invest in a solution like yours. Create content that helps buyers self-educate on the value of your product and how you stack up against competitors.

If MQL to SQL <20%, top issues + strategies are:

Prospecting too generically. Research leads before reaching out to them and use your research to make your messaging more relevant. Incorporate insights from your data to illustrate how customers are solving their problems with your product and ask your prospects for feedback before asking for a meeting.

Following up on leads too slowly. Audit your lead routing to ensure that inbound leads are being routed to your reps in real time. Establish an SLA for responding to leads and incorporate it into your reps’ goals.

MQL criteria lacking intent. Ensure your MQL criteria contain an intent signal as well as company and persona matches. A good example of an intent signal is using an ROI calculator or reading reviews on your website.

If SQL to Win < 30%, top issues + strategies are:

Prescribing solutions too early. Ensure your salespeople are using the discovery stage to get the buyer to explain their problem in as much detail as possible and state their desire to change before jumping into demos. A deep understanding of the 5 rings of buying insight will help with this.

Losing control of the buying process. Ensure your salespeople are driving the buying process by setting an upfront agenda for each call and scheduling the next call before hanging up. A useful analysis to see where reps are losing control is to unpack your sales process by stage.

SQL qualification too soft. If you have a separate sales development group doing initial qualification of leads before handing off to your salespeople, check that they are qualifying prospects as having a valid problem rather than just booking meetings to fill up calendars.

If Activation Rate <95%, the top issues + strategies are:

Missing a joint success plan. Creating a joint success plan with a buyer should be a requirement for moving a deal to closed won. The plan should state the buyer’s challenges, desired impact and expected timeline for seeing results, detail the steps to reach the first value milestone and identify who owns each step.

Too low a bar for commitment. This is common in usage-based pricing models. Set the bar high enough so that the customer has an incentive to use your product for long enough to get to their first value milestone.

If Renewal Rate <90%, top issues + strategies are:

Recurring impact not clear. You need to regularly remind customers of the impact you are delivering and how it is aligned with the impact they were originally seeking when they bought your product. Use your customer check-in calls to re-validate the challenges and impact from your joint success plan and identify new problems.

Health metrics not tracked. Track the customer health metrics that predict churn, such as low usage, low responsiveness to communications and changing stakeholders so you can be proactive about reaching out.

Renewal process started too late. Create a process for re-validating your customer’s situation, challenges and desired impact with the buying team, starting at least 3 months before the contract is up for renewal.

If Expansion Rate <15%, top issues + strategies are:

Customers not prioritized. Rank your customers by their current and potential value and group them into value tiers. Organize your customer success team so that the most valuable customers can get the most attention (fewer customers per CS rep) and create a playbook for identifying additional buying groups.

Unclear internal ownership. Decide which departments own cross-sells, up-sells and renewals. The simplest approach is to have sales own cross-sells (selling to new buyers in the customer organization) and customer success to own up-sells and renewals (both of which involve selling to existing buyers). It is also beneficial to develop a “utopian grid” that can be used to pinpoint the opportunities across product lines and customers.

With your issues and strategies identified, add them to the model and set a goal:

Knowing what to focus on and when is the key to more consistent growth. Organizing your teams to focus on fewer more effective priorities, the metrics that matter and keeping them aligned and accountable against these should help you achieve a level of consistency that accelerates growth.

Thanks for reading. I’m John McAuliffe and I help companies accelerate growth more consistently and with greater predictability using repeatable processes.