Most companies in the world haven’t heard of SaaStr, an annual gathering of people in the software as a service business, but it feels like homecoming to those of us who’ve spent our careers in SaaS. This is my 4th SaaStr, and it has been a thrill to see what was a small gathering of SaaS geeks turn into a 10,000 person conference. And this year, there’s an important lesson I learned at SaaStr that applies to businesses in any industry: growth is a team sport.
— Brett Grendahl (@brettgrendahl) February 8, 2019
The SaaStr conference has always been focused on growth. The conference logo is a rocket ship. Your conference badge flair showcases your company’s ARR band. The most popular sessions are all about how to get from $1M ARR to $10M ARR, or from $10M ARR to $100M ARR.
And there’s a reason for that focus– growth is king in SaaS. SaaS companies tend to either grow fast, or die slow, as McKinsey put it in their seminal analysis of software companies. Everyone at a SaaS company needs to be focused on growth.
The glamorous part of the growth team that we hear most about focuses on the top of the funnel…. figuring out the sales and marketing motion for your business that will generate new leads, convert them to qualified conversations, and generate new recurring revenue. On the Zendesk Sell team, we think (and write) a lot about that part of growth… and build tools to support it.
But the less-glamorous part of the growth team focuses on the bottom of the funnel… the revenue that drains out of your business through churn and cancellations when customers aren’t happy. That’s less fun to talk about on a big stage at an event at SaaStr, but emerged as a key theme this year. Here are just a few examples:
• Harvard Business School’s @markroberge #1 step to revenue growth is to fix retention. It is far “easier to accelerate growth with world class retention than fix retention while maintaining rapid growth”
• Redpoint Venture’s @ttunguz’s #2 tip when thinking about free trials is to aim for 90% year 1 logo retention and a 100%+ net dollar expansion rate. Why start trials with customers that won’t even last a year?
- • Pardot founder @DavidCumings went so far as to call a net expansion business (where your customers grow more than they shrink) the “holy grail of SaaS” because then your business will growth without closing any new customers.
This less-glamorous part of the growth team has also been on the mind of the Sell team a lot recently. That’s why we released last week an enhanced integration between Zendesk Sell and Zendesk Support– so that all your customer-facing teams can be on the same page when it comes to keeping customers happy… and growing.
That’s also why we’re excited to make Sell part of the Zendesk for Startups program. Startups in particular need both parts of their growth team to be working together: winning more customers and keeping them happy. We’re delighted to make 2 seats of Zendesk Sell available for free to early stage startups, along with 2 seats of the Zendesk Support Suite.
SaaS companies may have a unique focus on growth, but every company needs the sales team and the support team to be on the same page when it comes to delivering an amazing customer experience.