How to Think About Growing Your Existing Accounts in a B2B SaaS Business
As your SaaS business matures, the percentage of revenue that comes from your existing customers grows very quickly. It becomes the lion share of your overall revenue number.
This base of customers is your greatest asset. Ultimately, these are the people seeing value in your solution solving their problems. They’ve got this underlying trust for your business and are willing to reinvest in you and your product on a monthly or yearly basis.
No doubt you’ve heard the saying before, “it costs more to win new customers than it does to grow revenue from your existing customers.” This is even more true in SaaS, where you’ve got this trusting relationship. You’re in a purchasing cycle with this customer, you’ve got their credit card details, or you’ve already agreed to a set of terms for large enterprise deals. This means it is significantly easier to grow that account, whether that be through increased usage, increased volume, increased number of seats, increased service levels, or with an additional product offering.
So how do you begin growing these accounts?
There are a lot of customers using SaaS products today that are privy to the tactics being used by companies to grow their investment levels. Typically they expect a call from their dedicated account manager, or renewal manager, about three months prior to the renewal date to “check-in” and see how things are going and if they would like to renew or upgrade.
The reality is that customers are sick of this impersonal and highly structured conversation. It makes them feel unloved, and that the only time as a business you reach out to them is when it’s time for them to give you money again. In reality this conversation is all about the rep and company and not about ensuring the customer is achieving recurring value.
The key to taking away that feeling for customers isn’t easy, it means you have to provide value throughout the engagement, orchestrating growth conversations that are aligned to the impact you provide to their business from the start of the sales process to their first renewal and beyond.
This means that when you’re having your initial discovery calls, and you’re figuring out if there is a fit or not, you can start to paint a picture of what a long term engagement with you may look like. It may go something like this,
“If we are going to be a good fit for you, ultimately we’d like to grow with your business… What we tend to do is have conversations with you at set periods in the future to ensure that, A, you’re achieving the desired impact from the service we offer, and B, whether there are further opportunities to expand that positive impact in other areas of your business.”
By having these conversations early on in the sales process it sets the tone for an ongoing business relationship, and funnily enough also instills more confidence about your product in the customer’s mind.
That’s one way to get around the dreaded “checking in” or “just touching base”conversation with your customers, but how do you initiate engagements specifically designed for growing accounts?
The two engagements that initiate growth from your current accounts
I typically see two engagements that are really successful for growing revenue from your current SaaS customers.
- Event-based engagements – driven by the customer while engaging with the product or contacting sales/support.
- Impact or value reviews – driven by the solution provider.
Whether you focus on one or the other really depends on if you’ve got a narrow or wide customer base. A wider customer base will usually see you rely on signals from the customer, with their use of the product. Whereas a narrow customer base will require you to go deeper and help them realise the value you are providing, and unlock the potential within those accounts.
Let’s take a closer look at both examples.
Event Based Engagements
Event based engagements tend to happen when you have a larger volume of existing customers and your purchases are quite transactional in nature.
There are three event-based engagements that pose an opportunity for you to grow your existing accounts:
The most common event-based engagement is the renewal event. A lot of SaaS companies think that this is a great time to up-sell or cross-sell, but that is usually because it is the only time you have actually reached out. It’s not necessarily the best time to do so.
The strategy for this usually involves an outbound email sequence about the upcoming renewal with the goal of creating a conversation with the customer.
The positive trigger event usually comes from within your account, but it may also come from external signals provided by that business.
One example of a positive event is when there is an increase in usage from the customer. Maybe they are using a new function a lot, or they are getting close to the limit set for their account. Or it could be as simple as the customer contacting support more regularly than usual because their business is growing and they need the software to support that.
People are calling these event signals PQLs or “product-qualified leads”, because they are coming directly from your customer. They are potentially the greatest event triggers that a SaaS company can rely on for growth.
External signals of a positive event trigger could come in the form of news reports, key personnel changes, or growth forecasts for the business.
The last type of event engagement is the dreaded “negative event”. This may be an outage of your service, or maybe your competitors have added some important functionality that you don’t have and your customers are frustrated. Or maybe the customer is just really pissed off that the tool is not solving the problem they thought it would for them.
There are also other negative events that come from the customer’s activity. It could be that they are having super-low usage of the product, or they may just not be logging in at all anymore. These are all really clear signs that you’ve got a customer who could potentially churn.
It takes a lot of skill to turn around a negative event trigger into a positive experience. Your customer service or sales rep needs to show a lot of empathy for the customer’s situation to be able to turn this situation around into a genuine opportunity for growth.
Below is an example of the “Golden Sequence” for handling customer frustrations and objections in this situation:
So we’ve covered all of the event-based triggers, which a lot of SaaS businesses rely on if they are predominantly a transactional business with a lot of customers.
But what if you have a narrower set of customers, and you’re looking to go “deep”instead of “wide”?
What you’re trying to do in this situation is to set up a cadence of interactions with your customer that allow you to pinpoint and emphasise the real value of your product to their business. Whether that be quarterly, monthly, or every fortnight, the cadence is really up to you and your customer. But once you commit to it, you need to make sure you follow through.
The key is to select the right companies to go through this process. If you select too many companies, you might over-promise and under-deliver and start to let down your customers. This could create your own negative event. Make sure your reps have enough capacity to manage the customer group you are assigning to them.
Understanding the best cadence for these interactions is to think about the content and collateral you are going to need to execute. What sort of emails will be sent pre and post the engagement? What reports do you need to create for these meetings? What is the agenda for the meetings, what outcomes are you looking for? Are they achieving recurring value with your product, and if so how can you remind them of that?
It could be as simple as sitting down with them and going through a shared dashboard. Or you could dive deeper and generate some key usage metrics such as logins, user engagement, and overall impact on their business.
Use the opportunity to learn more about their business by asking what other features they could benefit from, or what other challenges they face that you could potentially solve. This information is going to be invaluable for your product and leadership team.
The final piece of the puzzle is all about focusing on the next objective – how can you help them with the very next thing they are looking to achieve? You want to extend the relationship beyond a single-point solution, to help their business and them personally be successful.
So what is best practice when it comes to growing accounts in a B2B SaaS business?
Now that we’ve taken a look at the two types of engagements that typically generate account growth opportunities, what is best practice for B2B SaaS organisations?
You should look at a hybrid of the two methods.
Look to identify the accounts with a high probability to grow. For example, if you have a product that is priced on a per-seat model, you’d want to look at the overall employee count of a customer’s business. If the number of seats that they currently purchase from you is significantly lower than their employee count, then this could be an indicator of future growth. This identifies opportunities for you to begin prospecting to your existing accounts.
Another way to uncover the customers and businesses with the most potential for growth is to use Lattice Engines or Six Signals to do some predictive analytics on your customer base and identify the areas of greatest growth potential. Of course if you don’t have access to that technology you can just do some old-school pattern-matching in excel after learning more about the businesses.
The companies with the most potential for growth, based on this analysis, should then be set up for the cadence-style impact and value review engagements. Depending on your business size, this could be your top 10-50 growth prospects.
Then when you’re looking at the overall universe of your customer accounts, outside of this core group, you can monitor and listen for event-based triggers that will enable you to take advantage of growth opportunities elsewhere.
There are a lot of variables to consider when deciding what’s right for your business, but this hybrid approach to growing customer accounts has proven to be successful for a number of other SaaS businesses.