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Key Activities
To successfully bring a SaaS solution to-market, it is necessary to align commercial forecasts and budgets with effective sales motions and marketing plans. You must also have a plan to understand and measure whether customers are adopting the product and realizing its value. Even if a SaaS business can exceed new customer acquisition goals, it will struggle financially if customers do not use the solution effectively and efficiently. Such customers will not renew; this attrition is commonly referred to as churn.
Without the large, up-front payments common to perpetual licensing software models, unexpected churn can often leave your company at a financial loss, unable to recoup customer acquisition costs (CAC). As a result, sales team compensation economics must be structured to incentivize customer retention. Most businesses can’t afford to pay sales representatives heavily up-front for customers that might churn, and never become profitable. Therefore, it is important to establish rigorous pre-sales methods, lead qualification standards and effective onboarding processes.
The MVS phase plays an important role in refining the GTM strategy for GA, and should directly influence decisions related to packaging, selling and operating the GA solution. Prior to bringing a new offer to-market, you should apply lessons-learned in the MVS phase to revise buyer and user personas, update customer journey maps, and set product adoption targets, to complement customer acquisition and expand-selling sales motions.
Figure 5 - Market and sell with a customer-centric, adoption-driven approach
Below is a list of steps you should follow when building a GTM strategy for new SaaS offerings:
Update customer journey maps
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Goal: Enhance buyer and user personas built in the Product Strategy and Roadmap Development phase; incorporate lessons learned during MVS phase to append attributes linked to buying behavior, onboarding experiences and product utilization patterns. Update customer journey maps to align team-level responsibilities with a series of predictable buyer and user experiences.
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Outcome: Buyer and user personas include measurable attributes common to customers likely to succeed at adopting the product. Sales and marketing teams are armed with accurate expectations, qualification standards and demonstrable value propositions. You are able to measure and manage team and individual-level effectiveness, at all stages of the customer experience.
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Key Decision Point: What lessons have we learned during the MVS phase that can help us to create a better customer experience at GA launch?
Establish commercial and operational frameworks for new customer acquisition
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Goal: Define year-one customer acquisition objectives, inclusive of revenue targets and annual contract value (ACV) goals. Divide these targets among your portfolio of complete offers, which are the packaged (bundled and/or tiered) features and services that you will bring to market, and segmentation model. Determine the skills, structure and processes required to efficiently acquire and stand new customers up, and align these requirements with a cost model.
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Outcome: Budgets are approved for sales and marketing-related customer acquisition costs (CAC) and operating costs. Forecasts are established for year-one revenue (via new customer acquisition). Operational model includes a plan to onboard new customers in a timely manner, in line with acquisition forecasts.
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Key Decision Point: What are investor expectations related to profitability and revenue in year-one? How much support does it take for a customer to onboard and realize value for the first time?
Set customer retention and expansion objectives
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Goal: Forecast retained revenue (net of churn) and expansion revenue (up-sell, cross-sell). Set budgets for funding customer expansion costs (CEC) and customer retention costs (CRC). These budgets are frequently used to fund Customer Success or Renewals teams, in SaaS companies. Forecast customer lifetime value (CLTV) to include plans for customer retention and growth, over time.
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Outcome: From here, set effective ratio targets for CLTV vs. your acquisition, retention and/or expansion costs, to ensure that sales motions are executed under profitable conditions. This exercise also enables you to align sales quotas with end-of-year annual recurring revenue (ARR) targets.
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Key Decision Point: Can we actually release enough new features, services and products in year-one to achieve up-sell/expansion targets? How long can we expect to retain a customer?
Determine appropriate sales motions and compensation incentives
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Goal: Determine a relevant distribution model for new customer acquisition, typically some combination of pre-sales, inside sales, field sales, and partner/channel sales resources. Build sales motions (e.g. acquire, renew, expand) that qualify opportunities with rigor and align appropriate sales processes with offer complexity. Pair complex, high-ACV SaaS offers with higher-touch, consultative processes, and pair less-complex, low-ACV solutions with a lower-touch, product-led, try-and-buy processes. Create sales compensation models that include product adoption and customer retention incentives. Establish boundaries related to discounting to ensure that deal-making variables align with your profitability requirements.
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Outcome: Sales teams operate efficiently and meet buyer expectations without unnecessary friction. They are rewarded for acquiring customers that adopt the solution efficiently and renew. They leverage prescriptive, personalized sales tactics to align buyers with solutions, and are willing to walk away from deals that are unlikely to result in renewal. Margins are protected by sales playbooks, which include acceptable discount parameters.
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Key Decision Point: How complex is the SaaS offering? Does it require a high-touch consultative approach?
Establish Marketing operations
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Goal: Plan marketing operations to span the entire customer lifecycle, covering new customer acquisition and expansion opportunities. You should leverage an account-based marketing (ABM) framework and/or in-product marketing resources to trigger low-friction, point-in-time campaigns, targeted to specific industry firmographics, buyer personas, and user patterns.
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Outcome: Marketers can leverage a combination of people and automation to drive demand generation, marketing analytics and lead-scoring tactics through appropriate channels. They are able to progressively-profile and qualify leads as they move through the funnel. Sales representatives are able to focus on supporting highly-qualified leads.
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Key Decision Point: How much of the sales funnel is the marketing team able to own?
Define Customer Success (CS) charter and services
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Goal: Establish the primary CS charter - typically adoption or renewal, less-commonly, expansion, and a handshake process between sales and CS, preceding the onboarding of new customer. CS teams should create success plans aligned with desirable customer outcomes.
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Outcome: An effective partnership between sales and CS teams leads to faster TTV for customers, reduces friction in onboarding, expansion and renewal lifecycle stages. An effective CS function serves to increase CLTV and reduce churn. CS teams earn customer trust by delivering results against the promises made by a SaaS brand. They also ensure effective product adoption, which is a pre-requisite for both retention and expansion.
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Key Decision Point: How will you monetize the CS function? Will CS carry a revenue quota?
Launch and Product Communication Strategy
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Goal: Define the scope of your product updates and its impact on your customers, including metrics that will help you measure effectiveness and ongoing improvements of your communications plan.
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Outcome: Definition of your target internal and external audiences, beyond technical users or admins, including business leaders and other stakeholders. Development of content types that would resonate with each target audience the most, and multiple communication channels to reach out them.
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Key Decision Point: How can you announce a launch of a new SaaS solution? Which communication strategies would resonate the most with your customers, investors, and internal teams?
