Sales Result | Sales Blog

    By Chris Strandin July 6, 2022

    Growing SaaS Installed Base Revenue

    Typically following the initial growth of a company's core SaaS product, markets become saturated, and growth of new accounts slows. Once this happens, key ways to continue rapid growth are to bring a new product, service, or upgrade to market, or expand utilization of the current product within installed base accounts. These strategies allow SaaS companies to bridge the gap to continue hitting rapid growth targets by offering new products, services, or tiers of products.

    Successful SaaS companies break down marketing and sales roles into the following broad customer lifecycle process:

    1. Identify and attract prospects
    2. Qualify prospects and deliver value
    3. Close and onboard new customer
    4. Take care of the customer, cross sell, upsell

    In a really early stage SaaS startup, one sales rep may perform all of these roles, while a more established company will separate these roles to take advantage of specialization. The fourth stage is where sales leaders and their teams can tap into installed base potential  to add incremental recurring revenue to keep pace with aggressive growth targets. 

    Typically in the first 5 years or so of a SaaS startup, growth targets are to triple the first two years, double the next three years (T2D3), then begin to execute on achieving the Rule of 40. The rule of 40 basically says that if the sum of growth percentage and profitability percentage are equal to or above 40%, the company is doing well, and will get a much higher valuation (2-3x higher than a company not growing at the same rate). I raise this point because as markets get saturated, expansion in current accounts is often a great strategy to continue to grow revenue and profit. 



    The problem that many SaaS companies find is that after an explosive growth period, the growth begins to slow. The second major growth event happens when a company has an add-on offering or a higher-price option for existing customers. The lead development, qualification, and closing reps are going to keep pursuing new business, so the business expansion effort falls on the customer success team to cross sell and upsell into existing accounts. 

    Typically, expanding is a different skillset than a Customer Success representative is trained in during the early stages. Early-stage SaaS customer success roles typically focus on ensuring the new customer is onboarded, adopts the product, and is generally taken care of in terms of questions, outreach, etc.

    The Customer Success team is typically good at asking questions about if customers like the product, if they plan to renew, and if they have any feedback. That is a much different line of questioning than understanding their needs for a new product, who additional decision makers may be, delivering value, and moving the sale forward and closing. 

    The problem is, they don't have the training to be successful upselling quickly and as effectively as they could, stalling revenue and profit growth from existing accounts. They also don't have the infrastructure and process in place to identify and create a plan for capitalizing on whitespace. 


    What We've Learned

    Many Customer Success reps do a good job establishing rapport in a lower-pressure environment, but high growth expansion requires a different environment and additional tools and processes for reps to be successful. 

    To expand effectively with SaaS products, one of the most impactful ways to move the needle is to invest in cohesive and tailored messaging across marketing, sales, and customer success. The cohesive message is important because upselling current customers on more expensive or additional products may initiate a competitive evaluation. Ideally the customer loves your product, and the customer service rep has a great relationship, and is able to present the new features or product well; but it's best to be prepared if you're asking for more money.

    Nothing is more confusing for a prospect trying to compare your SaaS solution with others on the market than when your messaging isn't consistent across your own material, and doesn't support the business benefits you're selling. If the website raves about ease of use, the marketing emails keep hitting ROI, and your salespeople keep talking about building a relationship, your prospect is going to get confused about your core value proposition. Your messaging needs to have a niche in your overall marketplace, then your sales people and customer success teams need to tailor that message as they learn more about each prospects need. 

     As illustrated below, the message to the market needs to be unified, and the different value props come later in the sales process after the prospect is understood. Are these messages and value props mapped out for your teams today? 

    Artboard 1MarketVP-1

    Setting your teams up to deliver the right value prop to the right persona is how to continue rapid growth at SaaS companies both during and after the initial hockey stick phase.

    If your messaging is cohesive, it becomes much easier for sales to ask the right questions and handle objections more effectively. If you've done the work to identify why your product is superior in a certain area, ask the prospect about what they're doing today in that area to validate their business pain. The questions you ask then have a purpose beyond generic discovery, and tailor the conversation to highlight your product's strengths.



    To beat the rule of 40 and maximize the revenue and profit growth of your existing client base, you need to start with the right foundation. What we see is that a tailored sales playbook with the right tools and messaging makes a massive impact. These training tools work best when created and implemented as a cohesive selling system.

    The Paint-the-Picture® Sales Playbook is the most complete, comprehensive, and cohesive sales training tool we have seen in two decades of consulting with sales teams. This playbook framework provides the structure and tools to transform customer success reps into growth machines.



    If you want to fully leverage your existing accounts to continue your growth, providing your teams with the tools to be successful faster and more sustainably, talk to Sales Result about tackling it with a wholistic approach. Here are some more resources below if you'd like to read more, or contact us today.

    Paint-the-Picture® Sales Playbook

    Winning Sales Process

    Topics: SaaS / Technology

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