🔆 Strong sales metrics, negative gross margin…

🔆 Strong sales metrics, negative gross margin…

The hidden advantage of shortening the time to value for your own SaaS business

“We experienced 19-day closing time, 35% win-rate at 2x the price of our competitors, but dragging +50 week implementation cycles…”

This quote started a deep conversation yesterday in our CEO Mastermind about how critical focus is for a B2B SaaS business.

For this company, how impressive the sales stats may sound, it wasn’t sustainable. Negative gross margin, high churn, and eventually, revenue decline.

How they solved it? Focus. 

They niched down. Said a lot of ‘no’ in the sales cycle and made doing business as easy as possible – especially post-sale. And the latter gave some exciting benefits they had yet to anticipate.

Shortening the implementation process from +50 weeks to 6 weeks gave the customer a shortened time to value (obviously). But that blurred by the other effects that kicked in:

  •  Their Engineering team got way more resourceful: they were less distracted fixing implementation challenges and irrelevant feature request
  •  The moral of the implementation team dramatically improved: better feedback, more enjoyable work
  •  The gross margin turned from a negative 50% to a high positive 65%

But the most significant value came from better insights. 

  • Within 90 days (instead of +500), they would get valuable insights about what was working (and what was not)
  • That allowed them to get ultra-specific on where the fit was perfect
  • Niching down increased funnel quality and boosted win rates to 50%
  • Iteration loops became much faster – having a positive effect on employee training, implementation quality, and product impact

Key takeaway: Selling is one thing – but pay attention to the trickle-down effect – it can bring your company down to its knees

Focus works in 2 ways: Customers turn into fans, and your business grows in strength.

Question for you to reflect upon

What’s the % of customers to whom you deliver your best work and get the most energy? What would happen to your business if this % increased by 20%?

 

Be Remarkable

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