Winning by Design conducted a study to understand the impact of an economic downturn on software-as-a-service (SaaS) businesses. We looked at various go-to-market factors, and measured key performance metrics such as sales cycle, deal size, lead conversion, and growth rate.
Download the paper for the complete view of the the mathematics and frameworks that prove these concepts, and for the suggested actions for Revenue leaders.
An increasing share of SaaS companies were able to achieve or maintain hyper-growth during the economic downturn. This was the result of an increased focus on customer expansion, as well as closing new deals at a higher price.
The recommendations to sustain growth during an economic downturn are:
- Focus on expansion of existing clients. Action: Establish a playbook for customer expansion, train your CS team on sales skills, and train managers on coaching their CS team
- Customer Success teams should inform clients of the impact achieved every month. Action: Hold a workshop with your CS team to identify the impact that your SaaS service offers, and to establish a cadence to keep the customer informed.
- Increase revenue from logo acquisition by increasing the price where appropriate. This should be combined with helping the sales team identify prospective customers early on, based on the need for Impact and establishing a Critical Event. Action: Hold a workshop with the Marketing and Sales teams to identify the impact your SaaS service offers; work with your Revenue executive team to identify areas for potential price increases.
The findings in this report cover research conducted by Winning by Design (WbD) over the period from March 2020 to July 2021. Respondents observed that during this period, it was harder to generate new leads and win new deals. As a result, companies shifted focus to existing customer expansion and higher deal values for new business.
The impact of this shift is that a growing number of SaaS companies achieved growth during the economic downturn.
This was the result of focusing the executive team’s attention and the company’s resource toward customer retention and expansion.
Further analysis shows that growth originated from three specific causes:
Finding 1. Larger deal sizes, in some cases the result of a price increase
Finding 2. Fewer but higher quality leads driven by better market awareness.
Finding 3. Higher conversion rates based on improved sales skills and execution