Funding & growth Archives (2024)

In many ways, growth marketing and SaaS go hand in hand. Within your team, you’ve already got the know-how for running tests and measuring experiments, and you have access to a wealth of user data from the customers who have been using your SaaS product.

If you want to power more growth for your SaaS business, this article will help you do two things:

• Implement a methodological framework for your growth marketing strategy
• Understand the key variables of the SaaS model that impact your approach to growth

A Methodological Framework

Growth marketing requires a creative mindset – one that’s willing to think outside-the-box and extend the experimentation process to cover previously unexplored areas of the business.

However, it’s also important to adopt a methodological approach. This is why I follow the 7 core principles of growth, which I also outlined in detail within my guide to growth hacking. These provide a solid foundation on which to build your growth marketing activities.

The 7 core principles are: Experimentation, Iterative, High Tempo, Cross-functional Team, North Star Metric, User Insight, and the Ah Ha! Moment. In order to get the most out of these principles (which I discuss in detail below), it’s important to take into account the key variables of SaaS that sets it apart from other industries and business models.

The SaaS Model: Key Variables for Growth Marketing

There are two distinct features of the SaaS business model that affect the design and structure of a growth marketing strategy for this kind of business.

First, SaaS products are defined as low ACV (Annual Contract Value) or high ACV. Low ACV usually covers contracts of hundreds to single-figure thousands £ per year, and high ACV contracts of hundreds of thousands to several million £ per year (caveat: perspectives differ a little on these definitions). Your product’s ACV will thus have a significant impact on how you market it, as we’ll explore further below.

Second, as you know, SaaS follows a subscription model. Or as Maxio VP of Client Services, Karen Schmelzer, wrote recently, a relationship model. The key is to get customers to commit to your product for the long-term. You’re not just getting them to commit once, but again and again. Therefore, retention is absolutely essential.

As I take you through the 7 core principles of growth, I’ll focus on how you’d approach each step from a SaaS perspective – taking into account these two key variables.

The 7 Core Principles of Growth

1. Experimentation

The first and foundational principle of growth marketing is experimentation. It is by running various experiments that you’ll test which channels are most effective for acquisition and/or retention.

For a lower ACV SaaS product, you’ll be dealing with a higher volume of users and potential users in order to achieve ROI. Therefore, your experimentation is likely to focus on testing the most efficient marketing channels to gain new users (perhaps using free signups to gain PQLs), your “hands-off” onboarding process, and your automated messaging.

With a higher ACV product, however, there will be a much smaller pool of potential customers to target, leading to the potential for an Account-Based Marketing (ABM) strategy. Your experiments will address the creation of an effective Ideal Customer Profile (ICP) and the development of an outreach/content marketing scheme that is concentrated on the digital spaces used by your prospective customers.

2. Iterative

This second principle defines the mindset for your experimentation. Adopting an iterative mindset means that you approach your experiment systematically. Think of it as a closed feedback loop: you design the test, run it, measure it, learn from the results, and then those results feed into the next experiment idea.

The iterative mindset also involves taking incremental steps in your experimentation. Just making small changes between tests will allow you to measure with increased accuracy and achieve more useful results. This principle applies equally to all business models engaged in growth marketing, including low and high ACV SaaS businesses.

3. High Tempo

The principle of high tempo is all about keeping up the pace of experimentation. You’ll need to run regular experiments using as much data as you can process, in order to get the insights you need to drive growth. Of course, the number of experiments you can run will depend on your timeframe and budget.

For all types of SaaS, the right tech stack will help you keep up a high tempo of experimentation without compromising on quality, as I outline in my third rule of B2B SaaS growth marketing.

With a lower ACV SaaS product, your tempo of experimentation may be higher, as you’ll be gathering new data from multiple channels and users at one time. Especially if you have a freemium business model. If yours is a higher ACV product with a narrower range of data sources, that doesn’t necessarily affect the tempo of your experimentation. You can still aim to run regular tests to determine in-product usage, engagement with your content marketing, etc.

4. Cross-functional Team

An essential step in your growth hacking strategy is to build a cross-functional team. This is a group of stakeholders who represent different areas of expertise – product development, engineering, marketing, support, etc. They’re all focused on driving growth, and unified by the North Star Metric (see growth principle 5). For a higher ACV SaaS product, the cross-functional team may include an ABM specialist, thus tailoring your marketing activities towards high-value target clients.

5. North Star Metric

Growth hacking experimentation is all about driving the metrics that are linked to the success of your company. But the most important metric to pay attention to is what we call the North Star Metric (NSM).

The NSM is the point where the value of your product to the customer and your own business interests most closely align. As I wrote in a previous article, “the North Star Metric allows you to quantify your value. It provides a computable outcome to your customer’s relationship to your product, and allows you to set targets for the future of your business.”

So how do you identify this metric? For a subscription-based SaaS business model, your NSM is likely to be connected to customer retention. The more reliant the user is on your tool (showing your product has a high value to them) the more likely they are to stay. Your NSM may be tied to monthly run-rate (MRR), number of active users per month, or something else that indicates you’re keeping people hooked.

6. User Insight/Feedback

Your SaaS business will only grow if the product is meeting (or exceeding) the demands of your users. This means you need to know whether it’s doing so, or whether you’re falling short as a vendor.

For lower ACV SaaS products, a quantitative approach to measuring user engagement can gain useful insights. A key metric to monitor is the Net Promoter Score (NPS), which measures the “promoters” of your business against its “detractors”. But as Kate Harvey wrote on the Maxio blog, you need to go beyond this metric to understand customers much deeper.

Particularly with a higher ACV product, it’s important to take a personalised, qualitative approach to gathering user insights – where you regularly engage with individual clients. You can easily integrate this with ongoing support and training provided to help customers get the most out of the software.

Karen Schmelzer observes that, while user satisfaction metrics are important, “I’ve found that looking beyond the numbers to analyze the direct, verbatim feedback we are receiving from customers is even more valuable. By analyzing their comments, we can look deeper into underlying trends that are causing satisfaction…or dissatisfaction…”

7. Ah Ha! Moment

The final principle in our growth marketing framework is the Ah Ha! Moment. This is the point where the customer realises the value of your product and feels that it was worth the effort/money to sign up for it in the first place. Driving the North Star Metric should result in more users reaching the “AHM”.

For a SaaS customer, the best way to know they’ve experienced their “AHM” is simply if they maintain their subscription and actively use the product. They’ve realised, “this software is great for my business – it’s helping me create a fantastic experience for my customers – I can’t do without it.” Proactive account management will help get customers to their “AHM” as quickly as possible, avoiding quick churn. In addition, enthusiastic up-selling and cross-selling, you’ll ideally create “negative churn”.

In-product analytics tools are key to identifying customers who are at risk of churning before they reach the point of no return. These tools can use triggers to set off an automated response sequence, or flag a particular user for manual outreach from the support team.

—

Oren Greenberg is a growth marketer and founder of the Kurve consultancy in London. He helps startups and corporate innovation projects scale using digital channels. He has written for leading marketing blogs and has been featured in the international press.

International expansion can be a huge opportunity for SaaS businesses.

In fact, according to research fromCapterra, 4 out of every 5 online software searches were coming from outside of the U.S. in 2017 and software search volume was increasing at 12% year over year compared to just 5% inside of the U.S.

But, international expansion doesn’t just mean a physical change for your business.

Even if you never physically cross a border or open a new storefront, offering your services internationally requires big changes in the way you operate.

So before you begin making moves to expand your SaaS business internationally, here are a few of the major areas you’ll have to consider and adapt to for each new market:

• Languages
• Culture
• Local Laws and Regulations
• Electronic Payment Requirements
• Price Sensitivity
• Reporting Tools to Analyze New Markets

Let’s start with the most obvious. If you want to expand into a new market, you have to make sure that the people in that market can use your product easily —and that requires making sure it’s available in a language that the customers living there can understand.

It likely makes the most sense to targetinternational expansion to English-speaking countries first (assuming that is your business’s native language).

As you begin to expand into countries with moderate to very low English (or whatever your native business language is) proficiency, you will need to invest in resources that will allow you to communicate with your customers in their native tongue. This includes hiring support staff who can speak the language and making sure that support documentation, marketing materials, dunning emails, invoices and other customer communications are available in that new language, too.

It goes without saying that you can’t just use a basic, automated translation tool for this job unless you’re willing to incur serious brand damage as a result. A word-to-word translation won’t cut it in many instances. You need to demonstrate a true understanding of what your translated messages mean — both literally and culturally. You don’t want your business famous for a#translationfail, after all.

Cultural Adjustments

You’ll also need a deeper understanding of how the customer experience will change once you’re trying to appeal to a new market.

Customers in different parts of the world have different values, buying methods, holidays, peak seasons and overall approaches to running their companies.

They may also have different access to resources, such as connection to free and reliable Internet. This could impact the way your software works for them.

All of those factors tend to require a lot of changes in your approach if you want to be successful in a new market. You’ll certainly need different marketing strategies and sales tactics, for one. The tactics that resonate in the U.S. might not resonate in the U.K. or Japan, for example, or might not resonate at the same times of the year.

The customer service staff will also need a deep understanding of culture and customs in the new market to avoid offending clients — and to reach them as effectively as possible.

As we’ve mentioned before,quality customer relationships and consistency in customer experience are only becoming more important for SaaS companies,and those quality relationships can only be nurtured through a streamlined customer experience that leverages the power of quality revenue management.

Learn more about why it pays to align all your customer-facing, revenue-accountable efforts in our ebook:The Ultimate Guide to Revenue Management for SaaS Companies.

Different countries will have a variety of different expectations of the businesses that operate within their borders. To avoid dealing with fines and lawsuits, you need to know all about these expectations before you expand into a new market.

For example, there may be different rules about how your company can handle customers’ personal information, such as under the General Data Privacy Regulation in Europe. If you plan to make any local hires, a bevy of laws will probably apply to that process, as well.

And, without fail, you’ll need to adjust to different tax laws. That issue has certainly come to light recently with the recent uproar overthe proposed 3% sales tax that Francepassed targeting huge tech companies like Google, Facebook and Amazon.

For more detailed info on how to collect sales taxes, you can check out the full webinarAutomating and Navigating SaaS Sales Taxthat we hosted with our partners, tax compliance softwareAvalara.

Electronic Payment Requirements

When you’re transacting across multiple regions and countries, accepting payments gets a lot more complicated.

First of all, banks established in different countries tend to require different payment gateways for electronic payments. That means the platform you’re using to manage your subscriptions and billing must be able to connect with those different gateways.

Ideally, your billing platform will be able to connect with the various gateways seamlessly from the same web page (instead of having dedicated checkout pages for each individual gateway). It should also be able to deal with all of the international currencies your new customers will use. And, it should be compliant with local regulations, such asPSD2in Europe. (For more information on how businesses can prepare for PSD2,check out our eBook.)

You should consider that culturally, preferences on payment type may also differ from one country to the next.

GoCardless, an industry-leading direct debit platform, partnered with YouGov to survey more than 12,000 international consumers about their payment preferences. They found significant differences in payment preferences for B2C payments across regional lines. A few highlights from their findings: North American consumers tend to prefer prefer credit cards, Chinese consumers are very comfortable with mobile payments and European consumers tend to prefer debit payments. (For more details,check out the GoCardless blog poston the topic.)

All of that indicates that the type of payments your business is able to accept (credit, debit, mobile, digital wallet) is a crucial piece of the success of your software in new markets.

Keep in mind that the price points and billing models you’ve come up with for your software —the prices that you’ve spent hours researching, testing and tweaking —simply may not work as well in other markets.

The prices that seem reasonable and affordable for the customers in your original country may not be as realistic for those in other markets due to differences in local economic climate and competition in the marketplace. You’ll have to do some research into how your prices will be received there.

And because you might need to try out completely separate pricing experiments and make changes for each market, you need a billing platform that can handle those changes —while still providing streamlined reports that give insight into where your revenue is coming from.

Reporting Tools

Finally, before you expand into new markets, you need to make sure you have the right tools to gauge your progress and success in those markets.

You’ll need the ability to gauge how your business is performing in each market on an individual level, as well as how the business is performing overall. Your billing platform should be able to convert currencies easily so users can get a clear idea of how much revenue is coming in from each market.

The ability toisolate these factors will give you better insights into consumer trends and opportunities to improve your software.

The bottom line is that expanding into any new market requires time and careful research.

There’s no need to rush into international expansion, and expanding into more than one market at once is usually a bad idea.

Take your time to research which markets could benefit the most from your software based on the factors we’ve listed here. Be selective and deliberate. Make sure that you really get to know the target customer and their pain points before you expand into any new market.

Moving into new international markets without careful planning will cause billing and revenue management challenges that your business might not be prepared to handle.

Back in June, we released ournew Language Settings, allowing merchants to translate customer-facing invoices into another language outside of English.

Today we’re happy to take invoice localization to another level with the ability to create and set different languages for different customers in different parts of the world.

To make it even more precise, we’ve built this enhancement around the concept of Locales, meaning you can now define region-specific languages for different dialects such as “Spanish-Spain” vs. “Spanish-Mexico.”

How It Works

When you’re setting up a new language in your Site’s Language Settings, you now have the option to associate it with a specific region which creates a Locale. There are no restrictions to how many languages or region-specific Locales you can add.

Once more than one language is created, you will define the global “Primary Language,” that will be used as the default for all customers. By editing a customer’s account details, you can set the desired Locale to override the default language.

Existing merchants, learn more about configuring and using our new customer-specific Language Settings in ourhelp documentation.

If you’re exploring Maxio as a potential solution,schedule a call with an expertto learn more about all of Maxio’s billing and revenue management capabilities

Welcome to the Subscription Rockstars series!

In this series, we will take a closer look at wildly successful companies to better understand how they got to where they are today.We will analyze both their mistakes and their victories to draw lessons that you can apply to your business.And, of course, we will pay special attention to how their subscription billing models and pricing strategies contributed to their growth.

Now, without any further ado, let’s see what we can learn from HubSpot…

Brian Halligan and Dharmesh Shash met in 2004 when they were both graduate students at MIT.

Brian, who was helping venture-backed startups with marketing, noticed that people had gotten really good at ignoring intrusive advertising.

Meanwhile, Dharmesh, who ran a small blog called OnStartups, was seeing massive growth in traffic.

They were surprised that OnStartups, a tiny blog with no budget, was generating more traffic than companies that were spending tons of money on marketing.

This led them to realize the power of what we now call inbound marketing (a term they coined later).

In 2006, Brian and Dharmesh started HubSpot with the aim of helping people grow their businesses through a less intrusive, more human approach to marketing.

Today, HubSpot is not only a rapidly-growing enterprise that generates nine-figure annual revenue (more than $500 million in 2018), but they are also trusted thought leaders in the marketing industry with a cult-like following.

When Brian and Dharmesh launched HubSpot, the phrase inbound marketing didn’t yet exist, but the concept was already there.

As Chris Monk explains in his article“SaaS Founders — How to start a cult like HubSpot”, using the Internet to promote your product wasn’t a new idea in 2006.

In fact, the concept of inbound marketing had been around for almost a decade at that point.

However, HubSpot co-founders took the concept of attracting customers through content and ran with it.

They coined the phrase “inbound marketing”, made it an integral part of their brand and started evangelizing this approach to marketing with the zeal of a convert.

And they didn’t just promote their approach to marketing. They also launched an attack on the old approach — what we now know as outbound marketing. HubSpot presented inbound marketing as new, hip and considerate and outbound marketing as old, stale and pushy.

This attitude spread like wildfire among online marketers.

HubSpot established and executed on a truly disruptive marketing strategy:

• They coined the term inbound marketing.
• They evangelized the concept while successfully framing outbound marketing as archaic.
• Then, they offered their software solution to online marketers who were interested in this “new way” of marketing.

How HubSpot used inbound marketing to grow their business

HubSpot wasn’t just preaching inbound marketing to get people to sign up for their software. They themselves were true believers. They didn’t just talk the talk, they walked the walk.

They started by offering a free website evaluation tool called Website Grader which allowed people to enter the URL of their website and get an analysis of its performance.

They also created a blog where they published free high-quality content aimed at their target audience of online marketers.

In 2009, the founders co-wrote a book called “Inbound Marketing: Get Found Using Google, Social Media and Blogs” in which they included snippets of exclusive eBooks and offered the full content for free in exchange for an email address.

In 2012, they launched an inbound marketing conference that was fittingly named Inbound. It is now recognized as one of the most important online marketing events in the world. In 2018 they had their biggest conference to date with more than 24,000 attendees.

Over the years, HubSpot continued pouring money into inbound marketing, and as a result, they now have an incredible lead generation system.

HubSpot is one of the fastest growing SaaS companies of all time.

Take a look at thenumbers from their first five years:

Customer growth:

• 2006: 3 customers
• 2007: 48 customers
• 2008: 317 customers
• 2009: 1,150 customers
• 2010: 3,855 customers

HubSpot employees:

• 2006: 3 employees
• 2007: 15 employees
• 2008: 42 employees
• 2009: 96 employees
• 2010: 176 employees

Revenue growth:

• 2006: Unknown
• 2007:$255,000
• 2008: $2.2 million
• 2009: Unknown
• 2010: $15.6 million

Of course, it’s important to note that HubSpot raised a significant amount of capital in their first five years.

Most notably, $5 million in VC funding from General Catalyst in 2007, $12 million in VC funding from Matrix Partners in 2008 and $16 million in VC funding from Scale Venture Partners in 2009.

Venture capital allowed HubSpot to prioritize expansion over profitability, helping them achieve explosive growth.

In 2010, HubSpot CMO Mike Volpe explained their approach on Quora.

He said that they could be profitable if they wanted to and that their run rate at the time was in excess of $20 million.

However, they believed that there were tens or even hundreds of thousands of businesses that their product could transform.

So, they chose to focus on growing fast and achieving industry leadership in their space.

You don’t get to half a billion in revenue without making a few enemies

Remember that quote from the movie“The Social Network”?

“You don’t get to 500 million friends without making a few enemies.”

Turns out you don’t get to half a billion in revenue without making a few enemies either.

In 2015, HubSpot was shaken by a scandal when the previously mentioned CMO Mike Volpe was let go after allegedly engaging in hacking and extortion in an attempt to obtain the draft of a book by a former employee Dan Lyons.

Apparently, Lyons had an unfavorable impression of the company, so Volpe considered his book,“Disrupted: My Misadventure in the Start-Up Bubble”,to be a threat to HubSpot.

The book did get published, and Daniel Lyons criticized HubSpot in a scathing New York Times op-ed,“Congratulations! You have been fired!”.

He asked his readers to imagine a frat house mixed with a kindergarten mixed with Scientology if they wanted to get an idea of HubSpot was like.

According to him, the company was a digital sweatshop, the training felt like cult indoctrination and the employees were seen as disposable.

Lyons’ book, as well as the scandal surrounding it, got a lot of public attention, and HubSpot had to issue a response.

“Undisrupted: HubSpot’s Reflections on “Disrupted””, written by Dharmesh Shah, was a surprisingly civil defense against Lyons’ criticism.

The founder acknowledged that Lyons was entitled to his own opinion, addressed some of his critique of the company culture and of the business model and even agreed with some of the points he raised.

Dharmesh’s response to Lyons provides a great lesson on how to gracefully handle criticism.

This whole controversy sparked a long-awaited discussion about the startup culture in general and the HubSpot culture in particular. Some people sided with the company, some people sided with the ex-employee. However, eventually everyone learned valuable lessons and moved on, which shows that a company that has built enough goodwill can survive a scandal.

In 2006, HubSpot started with a simple offer and charged a flat fee of $250/month.

Over time, as they added more features to their product, they introduced the “Professional” plan (in 2008) and the “Enterprise” plan (in 2010).

In 2011, they moved to aquantity-based pricing modelthat revolved around the number of contacts a customer had.

Since then, HubSpot has developed several software products, and they now have a complex pricing structure that allows a customer to pick the software and features that fit their needs best, ultimately customizing a package and solution that works for them.

The evolution of HubSpot’s subscription pricing strategy mirrors a common theme we see among our customers at Maxio. As a small company that is just starting out with a limited feature set, it is best to go to market with the simplest pricing structure possible.

It is important to make sure that you pick asubscription billing modelthat works well for your product.

Companies that over-complicate their pricing from the beginning risk losing customers before they have had an opportunity to realize the value of your product.

Consider this — if HubSpot had the complex bundled pricing they feature today in the beginning, there is a chance they would not have grown into the successful enterprise they are today.

As a company grows and adds additional features, support tiers, lines of business, etc., the pricing structure will naturally get more sophisticated.

It is hard to build and maintain the internal infrastructure to meet these billing needs over time. This is why businesses turn to subscription billing platforms (like Maxio) — forthe flexibility to customize and evolve their subscription models as their business grows.

Inbound marketing today — Does it still work?

In 2018 HubSpot revenue was $513 million, up 37% compared to 2017.

SaaS companies often look up to HubSpot and try to follow in their footsteps in terms of marketing strategy. But is that a good idea?

It’s important to understand that it’s not 2006 anymore. It’s 2019, and the effectiveness of inbound marketing is rapidly declining.

The competition is insane compared to what it was when HubSpot started. Sure, it’s still possible to build a blog. But keep in mind that going the inbound marketing route means competing against established companies with very deep pockets (such as HubSpot).

Meanwhile, even HubSpot doesn’t rely solely on inbound marketing anymore, their marketing strategy is now a mix of inbound and outbound tactics.

It will be interesting to see how the company will adapt to the changing marketing landscape. Will it be at the forefront of the next big paradigm shift? Or will it be outmaneuvered by some scrappy, dynamic startup?

At the moment, HubSpot seems invincible. But if history has taught us anything, it’s that no business or person is invincible.

Yahoo dominated the search engine space until Google showed up. MySpace was the go-to social network until Facebook took off. Nokia, Samsung, and Siemens ruled the mobile phone industry until Apple released the first iPhone.

However, there are also companies like General Electric and IBM who have managed to adapt and survive for more than a century and are still going strong.

The software industry is too young to have such long-established businesses but there’s no doubt that at least a few software companies that exist today will live to see the 22nd century.

Will HubSpot be one of these companies? Only time will tell.

HubSpot’s story should be an inspiration to every SaaS entrepreneur out there.

They identified a need in the market, they built a solution, they worked diligently at improving it for more than a decade (and continue to do so) and they are now more than halfway to achieving a billion dollars in annual revenue.

Moreover, they changed the way we think about marketing forever and ushered in the era of inbound marketing.

There is a lot to be learned from how HubSpot has achieved its success. Every SaaS professional can take these principles and apply them to their own business. With the right amount of opportunity, skill and creativity, there is hope that your business can also become a subscription rockstar.

How long is a startup a startup? We found ourselves asking this question in a marketing meeting not too long ago. It came up because people regularly refer toMaxioas a startup, but our company has been around since 2009. Are we still a startup? I don’t think so.

There are specific stages a software-as-a-service (SaaS) company moves through during its life cycle.

The first thing you may think, as we did, is “Does it matter? Do you really need to know what phase your company is in?”

According to a study by the Startup Genome Project of more than 3,200 startups, they found that “70% [of startups] fail because ofpremature scaling.” Understanding which stage your SaaS business is in can help determine the appropriate time to scale to the next phase—and do so successfully.

In this post you’ll learn how to identify each SaaS stage, what you should be focused on in each stage, and when is the right time to scale. The four major SaaS life cycle stages we’ll cover:

• Pre-startup
• Startup
• Growth
• Maturity

Hopefully the information below will help you avoid premature scaling. Let’s get started.

Pre-Startup

You may also hear this stage referred to asdiscovery,vision/mission, orproblem/solution fit.

During the pre-startup stage, a SaaS company should be focused on identifying a problem and how your service provides a solution to that problem.

“At this point, you are trying to work outwhether or not you are solving a problem. It involves a lot of research, reading and discussion. And, realistically, you don’t have to quit your job to do it. Find out that a problem exists before you dive into the deep end,” explains serial startup founder Leticia Mooney.

Common activitiesyour SaaS should focus on during the pre-startup stage can include:

• Talking to potential customers
• Seeking financing from friends and family
• Establishing relationships with advisors and/or mentors
• Joining an incubator or accelerator group
• Creating a minimum viable product (MVP)

You should also be aware of thecommon risksyour SaaS faces during the pre-startup stage.

The “primary risk [during pre-startup] is thefailure to design a business planand strategy that will enable the company to become profitable as it makes sales and earns revenue. Other significant risks include a dependency on seed money to cover operational costs for a longer period than anticipated, or a lack of funds to cover rising employee and infrastructure costs,” according to Andrew Armstrong, founder ofKickStart Search.

Finally, how do you know when it is time to move your SaaS forward to phase two?

“Ask yourself two questions: ‘What problem am I compelled to solve?’ and ‘Does my proposed solution solve it effectively?’ If you have a clear answer to the first question and a confident ‘Yes’ for the second, then you’ve gotproblem/solution fit and a hypothesis, and it’s time to start pressure testing your idea,” advises growth marketing consultant Lauren Bass.

Source

Startup

You’ll also hear this stage calledvalidationor theproduct/market fitstage.

As those names indicate, in this phase a SaaS company’s focus should be on finding product/market fit. While it may seem counterintuitive, you should avoid focusing on how to scale at this point. We’ve gone into detail on how tofind product/market fitin a previous post, so here we’ll concentrate on the important details of this stage.

Common activitiesyou should focus on in the startup phase include:

• Refining product/core features (this may involve pivoting to achieve product/market fit)
• Finding channel/market fit
• Establishing/implementing metrics and analytics**
• Making key hires
• Securing first paying customers
• Securing angel/seed money

**We should note that utilizing Sean Ellis’s product/market fit survey, NPS (net promoter score), and activation and retention rates are important elements of implementing metrics and analytics. The higher the activation and retention rates, the greater the indication that this is a must-have product. Those activities are discussed in detail in “.”

As to gaining your first paying customers, “There isn’t a hard-and-fast number, but you need enough users moving through so you can see whether people are sticking around and using your product or abandoning it,” says Morgan Brown.

If you seem to be gaining traction, now would be a good time to solve the problem of recurring billing, which most SaaS business models rely on.After all, that monthly recurring revenue is the engine that makes a SaaS business work. In the early going of a SaaS startup, it’s important to concern yourself with almost anything other than writing an app to charge folks each month—that’s where Maxio comes in. Ourrecurring billingservices let SaaS companies focus on their business and customer acquisition instead of the nuts and bolts of billing.

You may be less familiar with the concept of channel/market fit than product/market fit. At the startup stage, you’ll want to address both.

“Channel/product fit is all about using a process of channel discovery to find the highest yield and most efficient avenues for reaching your target customers,” says Bass.

In practice, this means understanding some typicalrisks and concerns:

• Failing to identify the best customers/target audience for your product
• Thinking too broadly about who your target customer is**
• Gaining an insufficient number of customers to create cash flow needed
• Making hiring mistakes early on that have costly impacts on the company
• Spending too much on customer acquisition before product/market fit
• Not pivoting when it’s needed
• Expanding into a narrow market that is already oversaturated with competition

**Side note: Bass explains why broad target market definitions are a concern to be aware of: “You MUST be hyper specific here. For user acquisition purposes, your target customers are NOT ‘working mothers or marketers’ (they may be exactly that for the sake of fundraising, since you need to demonstrate a huge addressable market for your product). Here’s an example: in the beginning,New Relicdidn’t see their target customers as developers. They zeroed in on Ruby on Rails developers as their early adopters and became a voice within that very niche community. Later they expanded to serve a larger population of developers as they scaled.”

The focus at the startup stage is not on scale, but New Relic was savvy in that early phase to narrowly define their target market, which helped them find continued success as they scaled in later stages.

It can be very tempting to move to the next phase too quickly. Resist. “Startups need2-3 times longerto validate their market than most founders expect. This underestimation creates the pressure to scale prematurely,” according to the Startup Genome Project.

Stepping Stone:Efficiency/Process Improvement

Efficiency/process improvement is a stepping stone along the way to the next major SaaS stage. “The goal here is to build a base of loyal, passionate and successful customers toestablish credibility while preparing the startupfor full-on growth,” writes entrepreneur Mark Birch.

Common activitiesyour SaaS should be focusing on during the stepping-stone stage can include:

• Clarifying value proposition
• Refining customer experience/onboarding
• Funnel optimization**
• Achieving viral growth
• Finding the channels that allow you to scale customer acquisition
• Identifying a repeatable sales process(this is mission critical!)

**For more information about optimizing the customer life cycle funnel from first touch to paying conversions and beyond, check out our post: “Master The SaaS Customer Lifecycle Funnel: Acquire, Retain, Engage.”

Typical risks and concernsto be aware of during this phase include:

• Not pivoting when needed as the market changes
• Expanding “to exploit a company’s accomplishments…rather than keeping the company stable and profitable” (Armstrong)

Once you’ve successfully found product/market fit and made initial processes more efficient, your SaaS company is ready to scale to the next stage: growth.

Growth

Congratulations, you’re growing! In this SaaS stage, “You have a product and market fit. You know it works. You’ve got the process to a point where you’re driving traffic, leads and conversions. So you move into top gear and drive acquisition quickly, efficiently and smartly,” says Mooney.

Forenterprise tech startups, this step “defines the true market challengers and when the startup evolves from a scrappy startup to an actual business that has a clear understanding of [the means] and the cost of acquiring customers,” writes Birch.

Industry-wide, there is some disagreement about whether “scale and establishment” is its own distinct phase or if it falls under the umbrella of “growth,” such as in Startup Commons’ model below:

Source

For the purposes of this blog, we agree with the latter.

At the growth stage, some companies will find themselves needing to shift focus from revenue growth to profitability. Alternatively, your SaaS may need to focus on raising the capital required to support aggressive customer acquisition and scaling.

Some of thecommon activitiesat the growth stage include:

• Seeking Series A funding
• Aggressively acquiring customers
• Hiring executives
• Scaling improvements on the back-end
• Gaining a deeper understanding of A/B testing and conversion optimization**
• Have an established,repeatable sales process
• Ensuring your product, marketing and sales teams are aligned

**BigCommerce cofounder Mitchell Harper points out that “improving your visitor to trial conversion rate by just a few percent can have a huge impact on your revenue, so getting an intimate understanding ofconversion rate optimization and split testingduring [this phase] should be a top priority.”

At Maxio, we agree. That’s why we’ve builtsubscription managementcapabilities into our platform. They can help you flip a trial-based customer into a paying one. With our email automation logic, you can have a staged email drip campaign to inform those customers that their trial is ending. We also offer other logic to communicate with your customer throughout their life cycle and cultivate that relationship. Messages can include:

• Welcome email at signup
• Upcoming renewal notice
• Receipt after transaction
• Card-on-file expiration
• Payment overdue

Scaling is expensive because your costs increase as the number of customers you support grows. In the graph below,Grooveillustrates their scaling expenses as the company grew. The company providesthe following advice: “Be careful not to let yourcosts scale fasterthan your revenue.”

You should also be aware of the followingrisks and concernsin the growth stage:

• Insufficient cash to handle the costs associated with growth
• Inability to get “costs lower than revenue at scale” (Startup Genome Project)
• Failure to focus on your business model
• Hiring mistakes (at this stage bad hires can harm company culture)
• New competitors copying your business model**
• Scaling prematurely
• Amplified issues of cash burn and working capital needs (Destin)
• The difficulty of “getting things done” as you increase the number of employees
• The need to shift developer focus***

**”The first two stages are easy. The third stage is when other people can see what you are doing and nowother companies try to copy and destroy you,” explainsAirbnbcofounder and CEO Brian Chesky.

***As Groove scaled, they found themselves forced to shift developer attention. CEO Alex Turnbull explains “more customers means more bugs. And more bugs means less time for our team to work on everything else.”

Metrics are key in every SaaS stage, and at this step the data will determine when your company is ready to move on…

Maturity

In the maturity stage, “customers know what they bought. How your services are used/consumed and what your product will do for them have been defined/documented. Ninety-five percent of outcome scenarios fall into an operational bucket and are delivered consistently, at scale. Your departments’ and organization’s products/services have a known set of predictable measures,” according toAlexander A. Sulpasso, Vice President of Operations at Guilford Savings Bank.

At this stage the growth of your SaaS will slow, but it should never completely stop.

Here is some of whatyou’ll focus on during the maturity stage:

• Looking for opportunities to grow globally—put local teams in place who understand the culture and nuances
• Considering the addition of new products or services
• Identifying acquisition opportunities**
• Continuing to invest in growth and experimentation to find additional opportunities
• Considering an IPO or an exit strategy

**According to Bass, acquisition opportunities can “align either directly or tangentially with your product. Maybe an acquisition target gives you access to a new but very similar market of users, or maybe a product helps you expand the value you offer current users.”

Even at this stage, says Mitchell Harper, it is critical that employees “understand that regardless of how well your business is doing, you’re never done, so a cultural bias towards ambition and a drive to win are important.”

The biggestrisks at the maturity stageare that the SaaS company becomes too comfortable in its success and stops doing the following:

• Monitoring/changing with the market
• Testing new things (products, tools, etc.)
• Retaining your competitive edge

Leslie Ventures Managing Partner Mark Leslie paints a picture of the worst-case scenario for a SaaS in thematurity phase:

“Growth slows even more, eventually flattening out—yet operational expenses continue to climb as they strive to compete with new players in the market. Finally, unable to keep up, burdened with bloated budgets, companies spiral into negative growth, marked by layoffs, high burn rates and eventual bankruptcy or liquidation.”

Yikes! While that description is dire, the key to avoiding those extreme circ*mstances isstrategic transformation.

If you’re a company leader, you’ll be the force behind any company transformations, whether it means pivoting in your business model, bringing new products/services to market, or making some other strategic change.

At the maturity stage, you’ll likely experience a series of shifts that “will meld over time into an overarching story of transformation and extended life expectancy.” Leslie shows what that looks like:

Your SaaS company is now in a prime spot! You have momentum behind you and stability in front of you. “You have the talent, money and market influence to do something new while maintaining and growing the core business,” says Leslie. Alternatively, you may be considering an exit strategy at this point.

Wrap-up

With premature scaling being the reason 70% of startups fail, it is vital to identify the points at which your SaaS can successfully expand.

By understanding the major stages of a SaaS company, you can create and implement better strategies for growth at every phase. And no matter where your SaaS company currently is in its life cycle, there are always opportunities to learn, adapt and excel.

And remember that if you’re looking for a recurring billing solution, Maxio is here to help. We have built a world-class billing platform that integrates with avariety of leading payment gateways, can handle customizedrecurring billing requirements, assist withsubscription managementand provide security for your customers’ data—we’re Level 1 PCI compliant. Not to mention that we’vejust brought on ProRatato handle the newASC 606 and IFRS 15 accounting standardsfor recurring revenue recognition. Stop mucking around with building your own billing app and let us do the heavy lifting.Your business has other things to focus on.

Do you have any tips for what a SaaS companyshould be doing or watching out for at each stage along the way? Let us know in the comments below.

We’ve been hearing hype about the Internet of Things (IoT) for a while, but now we’re at a time where it is becoming a reality. Many are calling IoT the fourth Industrial Revolution; the other revolutions brought us factories, the steam engine, and the internet.

At its most basic definition, Internet of Things is “a network of internet-connected objects able to collect and exchange data,” according toBusiness Insider. You’re probably most familiar with IoT consumer products such as Amazon Echo, wearable technologies like Fitbit, and smart home products such as Nest.

AMcKinsey Quarterly articlepoints out, “while the consumer’s adoption of fitness bands and connected household appliances might generate more media buzz, the potential for business usageis much greater.”

Global IoT spending is predicted to reach$1.29 trillion in 2020. According to the McKinsey Quarterly piece, “business-to-business applications will account for nearly 70 percent of the value that we estimate will flow from IoT in the next ten years…nearly $5 trillion would be generated almost exclusively in B2B settings.”

Here at Maxio, we’ve been seeing an increase in B2B IoT-related subscription businesses and we’re excited about the many possibilities for IoT B2B subscription use cases. Some B2B IoT companies are finding ways to offer subscription services, but in other instances B2B subscription-based businesses are implementing IoT to strengthen their product and offerings. In today’s post we’ll cover:

• Why the subscription business model is the perfect fit for B2B IoT companies, and how new and old companies are quickly adapting.
• The benefits and efficiencies that IoT companies are creating across various industries around the globe.

Why IoT Subscription Business Models = Success

“The most disruptive but exciting possibilityoffered by the Internet of Things is a fundamental shift in business models away from product sales to service sales,” according to an article by Regalix.

In our blog postThe Future Is XaaS: What you need to know about Everything-as-a-Service, we discussed how the subscription economy is growing and changing buying patterns, leading us to a point where anything can be sold as a service.

With IoT, devices of all kinds are moving online and connecting. The devices are harvesting an incredible amount of data, and it makes sense to offer services around this data. IoT companies which only create and sell devices limit themselves with a one-time revenue. Moving to a recurring revenue model helps B2B IoT companies create sustainable businesses.

Srinivasa Moorthygoes further and says recurring revenue is theonlyway IoT companies will be successful: “IoT will be successful only if the business model is subscription based or fits into a solution which has a steady periodic revenue stream.”

To help illustrate how an Internet of Things subscription model can work,Strategy of ThingsSenior PartnerBenson Changives the following explanation:

“Take the example of a sensor-based system that detects machine wear and proactively alerts the operator of the need for maintenance before a critical part wears out.

• It could be sold as a hardware and software product.
• It could also be sold ‘as a service’ with subscription fees charged on a monthly or periodic basis over a period of time.
• The vendor can also offer the hardware and software as a product sale, but some features, such as monitoring or other key functionality enabled in the software, on a subscription basis.”

Some IoT companies are piggybacking off their B2C IoT success to create B2B opportunities and markets. Nest is a perfect example.

TheNest Learning Thermostatis a B2C IoT product that uses sensors to program itself based on your daily activities, though it can also be controlled remotely via the Nest app on a variety of devices.

The sensors and connectivity make the Nest Learning Thermostat very energy efficient;according to the company, it pays for itself within 2 years. They don’t divulge the number of households currently using the product, but it’s clearly the most popular smart thermostat on the market now.

What to do with the plethora of data available from all those home thermostats? Nest is using the thermostat data as a platform to offer energy management services to utility companies across the U.S. The utility companies pay for the insights and services on a subscription basis. It’s a great example of capitalizing on B2C success for a recurring B2B IoT offering!

Utility companies working with Nest have access to more extensive energy usage pattern data, more effective energy efficiency programs, and are able to offer their customers free or discounted Nest Thermostats.

Thanks to Nest’s extensive (and continuously growing) network of utility partners,over 30%of homes in the United States had access to to a Nest Thermostat rebate or theirRush Hour Rewards programin 2016.

The nature of B2B IoT products and potential array of services are a perfect match for the subscription business model. Let’s take a closer look at the benefits…

Benefits Of IoT Subscription Businesses

Until now, I have the feeling that many B2B companies see Internet of Things as the perfect way to increase the efficiency of their processes. There is another side to that and that’s customer intimacy. Once you have the data, you know the usage pattern. And with that, you can do a lot. You can optimize the product, of course, but think about pre-emptive maintenance for instance. It is probably the biggest opportunity in B2B to invest in a world of perfect timing. Imagine the increase in service experience this creates among your customers. The manufacturer will know when things break down before they actually break down. This opens up the gate for a large set of new service agreements that weren’t possible in a world without data. It almost feels like B2B products will actually come to lifebecause of this data capturing.they actually break down. This opens up the gate for a large set of new service agreements that weren’t possible in a world without data. It almost feels like B2B products will actually come to life because of this data capturing.

Steven Van Belleghem,Co-Founder & Board Member, Snackbytes

Benefit #1: Takes the relationship with your B2B customers to new (awesome) levels

Data-driven marketing is already a hot topic, and the extensive data collected via B2B IoT companies will allow you even more precision when communicating with prospects and customers.

Just think of the real time engagement potential with IoT data and devices! “With IoT you’ll haveimmediate informationthat you can use to inform customer follow-up, whether that’s repeat sales, upsells, etc. at the right time and for a specific customer. You can also use this data to better target potential buyers and customize your communication according to the customer’s specific interests—whether that be message timing, message content, or specific offer,” explains Weidert Group’s Tim Holdsworth.

Again, while more press is dedicated to how this may apply to B2C IoT, savvy B2B subscription-based companies should also be looking at the Internet of Things potential for enhancing their relationship with subscribers.

Van Belleghem’s describes how he sees the traditional B2B process: “Companies are just talking to the intermediary and the intermediary is talking and selling (and sometimes offering services) to the end customer.” He illustrates the point with the visual below:

“The moment that you have sensors and data collection inside of products, things change completely. It will flip customer experience in B2Bcompletely. In this data enabled world, the producer of the product will have more end user information than the intermediary. Cause the intermediary just talks to the end user. But the end user data about the real behavior will arrive at the production facility. If you want to optimize the customer experience, it starts with understanding the real customer behavior. Once you have that? Wow! Then you can change a lot.”

Benefit #2: Removes the guesswork from your product development and roadmap

This point is more for B2B IoT subscription companies who initially offered a product but then ventured into offering services around the IoT data captured by their products. B2B companies currently offering digital services (such as SaaS) should already beanalyzing usage data when determining product development.

The Regalix article expands on this benefit: “As more and more physical products come embedded with a digital layer, they produce a whole range of usage datathat had to previously be obtained from the customer through somewhat tenuous means such as customer surveys and focus groups. Such usage data is a one-to-one conversation with the customer unlike any other, a real-time demonstration of how customers use your product, when they use it and for what purposes. Properly analyzed and smartly leveraged, it will fundamentally change how products are designed, produced, marketed and serviced, as it helps enterprises get closest to the ideal of co-creating products with constant engagement with their customers.”

Even B2B recurring revenue businesses currently using usage data to inform their product decisions will find the additional wealth of data available from IoT helpful in determining their future roadmap. It doesn’t stop there! Pay attention to how your B2B customers are utilizing the data you provide.

B2B IoT companyDroneDeployused the understanding of how their customers utilize data to create one of their products,Live Map. DroneDeploy is a software platform for drone mapping and it serves a variety of industries including mining, construction, and agriculture.

“Adrone can be launchedwith a smartphone app and guide itself back and forth over rows of crops, taking detailed pictures with both visible and infrared light. Software analyzes all that data together to detect problems like dead plants, poor drainage, and nitrogen deficiencies,” explains Stephen Lawson, a Senior Correspondent with IDG News Services.

The issue for farmers is that those drone images had to be uploaded to the cloud (requiring a wifi connection) or downloaded to a computer (usually back in the office) before they could be used, neither of which is convenient for many farmers in the field.

Live Map solves that issue and enables users to view simple images in real-time on their iPhone or iPad — no internet connection or laptop necessary!

Live Map also captures drone images in higher definition which can be downloaded later and used to provide deeper analysis. Real-time data directly from the drone to a farmer standing in the field is a game changing innovation, and is just one more use of IoT data that helps DroneDeploy remain a leader in their industry.

Benefit #3: Industries are able to compete in new markets

We’ve seen an increase in industries which were not traditionally using recurring revenue models moving to subscription business models. Following that trend, B2B IoT also allows different industries to enter and compete in new markets.

“One example is using IoT data and connectivityto transform the sale of industrial machinery and other goods into a service. The pioneers of this trend were jet-engine manufacturers that shifted their business model to selling thrust and ancillary services rather than physical equipment,” reports aMcKinsey Quarterly article.

Earlier, we discussed Nest; a smart home device entering the B2B sphere of energy management for utility companies is an example of B2B IoT allowing a company to enter a market they wouldn’t be a fit for without their IoT data.

B2B marketing executive Yoann Kolnik provides the following graphic to illustrate the many waysIoT allows businessesto take advantage of different markets:

According to the McKinsey Quarterly article, IoT also helps businesses stand out from their competition: “IoT will soon become a differentiating factorin competition.” Therefore, B2B companies looking to remain best-in-class will likely need to incorporate Internet of Things into their company roadmap sooner rather than later… and many will create subscription offerings around their IoT.

Benefit #4: Optimizes Operations

With everything connected via IoT, there are new opportunities to streamline operations and make your processes more efficient.

“Thanks to the combined data gathered from across all connected assets, enterprises are able to gain more unique insights into the long-term operation of various kinds of equipment in ways that customers, with their limited view and experience of product usage, cannot manage,” writes Regalix.

This B2B IoT benefit is usually considered in terms of manufacturing. “From the shop floor to the warehouse and throughout the supply chain, the Internet of Things promises a pipeline ofreal-time datato help optimize operations through lean manufacturing techniques,” reports Beth Stackpole, TechTarget Contributor.

According to Stackpole, “smarter plant-floor equipment, such as a robot or conveyor line, could help companies optimize their asset management and maintenance strategies in a variety of ways. Not only could the equipment alert plant floor personnel to problems in real time, but the data feeds could be analyzed to uncover patterns that would allow technicians to predict potential failures or redeploy resources in a more optimal fashion.”

Modern IoT companies are packaging the data related to maximizing operations for their B2B customers and selling it as a subscription service.

Companies like Wi-NEXThelp legacy factories enter the age of IoT. Wi-NEXT describes themselves as a software solution that “makes it easy to bring the connected factory to life by using IoT and big data analytics to analyze production data. The result? Earlier asset and quality loss detection.”

Wi-NEXT doesn’t share their pricing plans on their website, but the assumption would be that they’re offering their software solution on a recurring billing basis.

Benefit #5: Prolongs the life of products

B2B companies can help customers prolong the life of products via proactive preventive maintenance made possible by IoT. This is also referred to as “predictive maintenance.”

Identifying preventive maintenance opportunities proactively via the multitudes of sensors collecting data is particularly helpful in reducing downtime and increasing bottom line results for B2B customers.

This is particularly important for products such as manufacturing equipment, vehicles, and farm equipment. IoT providing proactive preventive maintenance suggestions in vehicles has received generous press for B2C companies, but maintaining vehicle fleets is a huge B2B opportunity as well.

Michelin Solutionsfocuses on corporate fleets (yep, more than just tires) and it gathers data from sensors embedded in the fleet vehicles. The data not only allows the company to provide corporate customers with preventive maintenance information for the fleet, but also provides Michelin a recurring revenue stream. Michelin Solutions packages insights from the sensor data and customers “pay Michelin on a per-vehicle, per-year basis” for the information, explains Jerome Buvat.

Wrap-up

129 So, while industrial IoT hasn’t garnered the headlines of its consumer-oriented cousin, it is real today and is already having a tremendous impact. It is gaining traction across many industrial segments, logistics, transportation, and smart cities. Other industries, such as healthcare, retail, and agriculture are following closely. We are just beginning to understand IoT’s potential. But one thing is certain: 10 years from now, you’ll have to look hard to find an industry that has not been transformed by IoT.

Maciej Kranz,Vice President, Corporate Strategic Innovation Group, Cisco Systems

The incredible opportunities IoT brings to B2B companies are impressive, and IoT is a perfect fit for subscription business models. It’s exciting to see the vast spread of recurring revenue opportunities B2B IoT is creating, both for companies already utilizing a subscription business model and those able to pivot to recurring revenue as a direct result of IoT.

Increase MRR (Monthly Recurring Revenue). Lower CAC (Customer Acquisition Cost). Increase CLV (Customer Lifetime Value).

SaaS companies will jump to make any one of those things occur, but all three…yes!

Welcome to the happy consequences of Expansion MRR. Expansion MRR is an increase in Monthly Recurring Revenue created when existing paying customers upgrade or increase add-ons/extras. Neil Patel refers to it as the SaaSHoly Grail.

Look at the difference between new customer CAC and the cost of upselling existing customers (per $1 of New Annual Contract Value), according to thePacific Crest 2016 SaaS Benchmarking Survey:

There are a number of ways to increase Expansion MRR, but today we’re focusing on pricing. Specifically, the ways you can structure your SaaS pricing plans that help “future proof” your company for optimal growth through Expansion MRR.

First, a quick note about the importance of Expansion MRR…

Why Expansion MRR Matters

“While there’s not aspecific benchmarkfor Expansion MRR Rate, it’s good practice to aim for increasing it to exceed gross churn rate,” writes Geckoboard.

When your expansion is greater than yourgross churn, you’ve achieved negative churn, which means the value of your existing customer base is growing without factoring in any new business. Negative churn can have incredible impact on your SaaS business’ exponential growth. Let’s look at an example from David Skok, from his blogUnlocking the Path to Negative Churn(we highly recommend you read it):

“The model starts with MRR at zero, and bookings from new customers at $10k in the first month, increasing by $2k every month after that (represented by the dotted blue line in the graph).The graph shows what happens to your bookings if in addition to your sales to new customers, you are seeing an expansion revenue from your current customer base of 2.5% every month (green line).”

He follows the model to explain that by the end of 5 years, the Expansion MRR would be contributing approximately $180,000 every month.

“Clearly getting to negative churn is one of the most powerful accelerators for growth,” writes Skok.

With that incentive, let’s look at the different ways you can structure your SaaS plans to increase Expansion MRR…

Fixed-Price Feature/Value-Based Pricing Tiers

At its heart, value based pricing encourages SaaS companies to view their pricing strategy as a product of the value they provide. Instead of fixating on cost-cutting to improve profit, companies focus on improving the service and value they provide, using extensive research to understand how customers actually value a product.

Ryan Law,CMO at Cobloom

Once a customer is fully engaged with your product and understands the value, they are more likely to upgrade for advanced features and functionality.

When you’re looking at structuring plans that help future proof your SaaS for increased Expansion MRR, utilizing feature and value based pricing means you understand the value of specific product features to your customers.

Structure your pricing tiers to include more advanced features on higher tiered plans. Don’t get us wrong, there will always be core features of a SaaS product available to all paying customers. From your research, you’ll also know which features have a higher value to customers and you can entice customers on an upgrade path with those features.Note: If you’re not already doing customer research, read.

“You want to upsell to a customer at a time when they have a need for your additional features – a time when upgrading makes sense to them. Thebest upselling opportunityis when your customer reaches a defined success milestone that has a logical opportunity for expansion related to it,” explains Emily Smith.

In SaaS upsells, it’s all about the value. If the customer can see the value of the upsell compared to his or her current subscription or purchase level, then they will understand why they need to buy.

Neil Patel,Co-Founder of Crazy Egg

Creating more highly featured versions of your product creates upsell opportunities. It also allows smaller customers a feasible entry point, with the option to scale to more advanced feature sets as they grow.

A great example isShopify’s plan structurethat starts with “Shopify Basic” and includes “all the basics for starting a new business.” It is a solid entry point to get a customer startedand provides plenty of value to create stickiness.

With Shopify, once customers get up-and-running and start growing their business, the upgrade path adds better shipping rates, gift card support, professional reports, and cart abandonment recovery tools—all value added benefits that make the upgrade decision an easy one.

Fixed-Price UsageRestricted Pricing Tiers

It is very common for pricing tiers to include a combination of more advanced features (as discussed above) and usage-based limitations such as the number of users, mailboxes, insights, alerts, uploads, etc. available in each plan. With fixed-price usage restricted tiers, many companies include feature differentiators, but primarily focus their upgrade path on usage restrictions.

The balance of how much emphasis is placed on features vs. usage/consumption will vary from business to business, but it is important to think about how customers will use your product throughout the various stages of adoption and growth.

In theDasherooexample below, the main plan differentiators are based on the number of dashboards, insights, mashups, and alerts.

Similarly,Filestackdifferentiates their plans based on the number of file uploads, transformations, viewing bandwidth, upload size, and storage.

In both of these example, there are some feature differentiators but the upgrade path is primarily based on usage limitations. As their customers’ consumption needs grow, so will their Expansion MRR as customers advance to higher tiers.

BasePlusUsage Pricing

In the aforementioned sections, the upgrade paths mostly include a mix of features and usage restrictions lumped together in different tiers. So a business may need to upgrade for more dashboards (usage-based) but get team sharing (feature-based) as a byproduct. Vice versa, a business may upgrade for a feature that also removes usage limitations. These groupings can lead to missed Expansion MRR opportunity down the road.

Autopilotis a great example of providing upgrade paths and Expansion MRR opportunities for both feature and usage-based needs. They offer two main feature-based pricing plans—Base and Business:

The pricing of both plans is driven by the number of contacts that you need to manage:

When you break down their pricing, it simply boils down to many tailored variations (i.e. Base w/ 1,000 contacts, Base w/ 3,000 contacts, Business w/ 1,000 contacts, and so on), but presented in a manner that is much easier to digest. By isolating feature vs. usage-based pricing, there are more Expansion MRR opportunities because a customer can:

• Upgrade from Base to Business with no change in the number of contacts (upgrade focus is solely feature-based)
• Upgrade to a higher contact tier with no change in the core plan (upgrade focus is solely usage-based)
• Upgrade from Base to Businessandto a higher contact tier (a double whammy)

According to Autopilot, “the Base and Business plans are optimized for two segments: those starting out with customer journey marketing and those who desire more sophisticated features…It is important to note that the Base plan is a fully featured service that offers tremendous value for money – not a handicapped plan designed to force customers up to our most expensive offering.”

Autopilot’s sentiment in that last sentence is an important one. Expansion MRR can’t occur without retention, and “handicapped plans” often don’t provide the value needed to retain customers. Remember, happy, paying customers make ideal upsell candidates (we discussed this point in our postSaaS Customer Success: The secret to reducing churn and increasing MRR).

“Per User” Pricing

According to thePacific Crest 2016 SaaS Benchmarking Survey, “Per Seat” Pricing (sometimes referred to as “Per User” Pricing) was the most common pricing structure of the SaaS companies surveyed:

Salesforceis the quintessential poster child for Per Seat Pricing:

Markodojo CEO and founderJoel Yorkexplains how Salesforce utilizes their usage based pricing structure to increase Expansion MRR:

“Salesforce has standard user-based subscription pricing, but then breaks its subscriptions into carefully designed modules of increasing functionality. If you’ve ever been a Salesforce customer, then you know that 90% of the upgrade process consists of you, as the customer, repeatedly bumping into the limits of your current subscription. When you need more users, or you need the capabilities of enterprise over professional, then you go online or pick up the phone and order them. The cost to Salesforce is minuscule compared to the original customer acquisition cost (which includes not only customers, but all the prospects that didn’t buy).”

In the earlier days of SaaS, Per Seat pricing was typically leveraged by larger, more enterprise-focused offerings. Over the past decade, it has quickly become a de facto standard for businesses of all shapes and sizes. Some modern day examples include:

Per User pricing is an obvious choice for businesses that are heavily driven by team member access (i.e. CRMs, help desks, team collaboration tools, project management tools, etc.). The success of future proofing your plans for Expansion MRR will rely on company/team growthandcross functional team adoption. For example:

• A CRM may start with the sales team but can expand into marketing, support, and customer success teams
• A help desk may start with the support team but can expand into product, sales, and customer success teams
• A project management tool may start with one product team but can expand into all functions of product/development plus other teams such as marketing

Once isolated teams are committed to using your product, it is mission critical for Expansion MRR that you promote ways to spread adoption throughout other cross functional teams within an organization. The more users added, the more Expansion MRR achieved!

Add-ons & Extras:

Finally, when structuring your pricing plans with customer expansion paths in mind, consider the value add of relevant add-ons and extras. Our focus in this post is increasing Expansion MRR, so the additions we’re talking about are recurring (not one-time add-ons).

For instance,HubSpotoffers 3 main plans for their marketing software plus the following add-ons:

Premium support, continuing education/customer success, and integrations are also common SaaS add-ons. Add-ons often have a narrower appeal but high value, which is a nice expansion path for customers that want or need the extras.

Wrap-up

There are many considerations to take into account when determining the best pricing models for your SaaS business. Plans must provide enough value to generate happy, paying customers, while your upgrade paths must be structured in a way that aligns with customers’ growing needs.

Remember, when your Expansion MRR is greater than your gross churn you’ve achieved the SaaS dream: negative churn. The value of your existing customer base is growing without factoring in any new business.

It’s important to note that experimenting with your pricing models takes time and often includes more complicated product configurations. Maxio was built to remove the complexity around creating, launching, and testing product configurations, all of which allow subscription-based businesses to move faster and grow quicker.

Give our Sales or Support teams a call at 1.800.401.2414 to learn more, orsign up for a demoto test drive Maxio for free.

The following is a guest post byBrad Smith. Smith is the founder ofCodeless, a B2B content creation company.

Sales is easy.

If you’re the founder. Or working by yourself.

It’s not so easy when you scale. Or try to hire others to do it.

Fortunately, some of the best in the business have already paved the way. (And are more than happy to share their insights).

Here’s how some of the best of the best successfully scaled SaaS sales teams, from zero to hundreds of millions.

Not only will I share the best ways to scale your SaaS sales team, but also how to find the right talent, onboard SaaS sales employees, and then how to evaluate their performance!

It’s time to get formal

So you wanna build a sales team?

No, that’s not the grown-up version of the famous song from Disney’s Frozen. (That’s what happens when you have daughters and haven’t seen an adult movie in 5+ years.)

It’sthequestion because the decision toscalechanges everything.

Founder-driven sales, by comparison, is easy. You’re the man (or woman). You’re the passionate expert. It’s infectious.

But once you start scaling, the same free-wheeling-and-dealing approach doesn’t work any longer. And you can’t expect to pluck the rockstar salesperson off the branch, the one with the best numbers, and let them do their thing. Unfortunately for us all, itdoesn’twork like that.

The most effective sales teams aren’t just good at their job. It’s not just because they eat, sleep, and breath your product (although, kudos to the enthusiasm).

According to a Harvard Business Review study, 50% of high-performing sales organizations have thorough, by-the-book sales processes for their teams to follow.

How ‘bout the underachievers? Only 28%. Coincidence? No way.

Source: HBR

Take a look at any of the top-performing SaaS lists, and you’ll likely find a highly-structured sales process.

Ones that work like clockwork. Because they’ve made the decision to run sales like a process-driven machine.

Create replicable sales processes

There’s two keys to scaling a sales team according toGareth Goh, formerly of InsightSquared:standardized scripts and shareable sales metrics.

Simple, right? (At least, in theory it is.)

New Sales Development Reps (SDRs) need a roadmap to follow with ‘checkpoints’ along the way to know they’re on the right path.

This doesn’t mean turning SDRs into mindless robots who only spew rehearsed lines. They can bring their own flavor to the game while still staying on message, and will ultimately reap the rewards. Of which, there are many:

• Increased efficiency:the process takes out the guess work
• Practice makes perfect:SDRs will be able to work the process in their sleep
• If it ain’t broke:processes let you fall back on what you know works
• No hand-holding:if a question comes up, follow the sales playbook
• Teamwork makes the dreamwork:the process promotes a very “we’re all in this together” mentality. Everyone’s working toward the same goal, with the same game plan.
• The numbers don’t lie:you have the data to show the process works. The sales team will want to follow a plan that shows results.

Why is process critical?

Because there are common (predictable)barriersthat can keep even the best SDRs from meeting their goals.

The antidote, according toJason Lemkin, is to help themalways know what’s coming next.

These (1%-ers) know exactly what they are doing going into every deal, usually even before they do the demo or pick up the phone. And with only so many hours in the week, they know exactly how much time to spend on each prospect to absolutely maximize the revenue per lead.

Jason Lemkin

The good news, for those still stuck in the in-between stage of building out a team, is that processes can create a foundation for successright now.

Johnathan DaneofKlientBoost(not a SaaS company… yet) still does the heavy bulk of closing by himself.$300k/mo, solo, in ~two bootstrapped years.

How?Processes.

Get new peeps all on the same page (or schedule)

I’m not gonna lie…

This tip is completely stolen fromRalph Baresi’sexcellentSalesHacker piece on SDR productivity. If you haven’t read it, you should. If you’ve already read it, you should read it again.

Scheduling out the sales day with “timeboxing” can help SDRs put their time into… wait for it,boxes. (Genius.)

By pre-selecting the most important tasks (ahead of time), the time-sucks (or just plainsucks) no longer have space in your day. (Poof– begone!)

This first OCD calendar example comes courtesy of TOPO:

Source: TOPO

Ralph’s “bookend approach” is also an excellent example, where Mondays and Fridays are used for the prep work so that the middle of the week is used toget ‘er done. (Dated reference much?)

Source: SalesHacker

Weigh the pros and cons of team org

I love me somePredictable Revenueas much as the next geek. But blindly following the same team org chart doesn’t always work…

Here’s why.

The multiple ways to design your teameach have their own pros and cons.

If you’re looking for the typical model, in which SDRs are equipped with the tools they need and then sent off to own their work, theIslandformat might be the best fit. This allows for minimal manager oversight and is good forsimplesales.

But it can also promote an “aggressive sales environment.” And there is less internal control over the org’s brand and message.

Source: Close.io

If efficiency is the name of your game, theAssembly Linecan work. Each team member has their own role, and stewards the sale down the line for completion through every step:

1. Lead generation
2. Sales development
3. Account ownership
4. Customer success

The Assembly Line allows team members to specialize in an area of the sale and makes it easier to spot where problems are occurring. But, it requires manpower and calls for effective communication through each step of the process to make sure the next person is fully-briefed on what the customer needs.

Source: Close.io

ForMike Kreaden, this is the “accepted sales SaaS sales team structure” that works for his set-up at Salesforce.

SDRs to bring in new clients, AEs to manage the accounts, and customer service managers to make sure everyone was happy and coming back for more. From their growth in the first five years alone, you can tell people were coming back for more. (And telling their friends.)

Source: SaaStr

Lastly, there’sthePod. This one’s a customer-centered approach in which the assembly line structure is broken down into smaller, cross-functional groups.

This model promotes high levels of customer care and cultivation and is good for effective communication. But with less competition among pod members, there aren’t as many opportunities for professional growth or incentive for competition.

Source: Close.io

How to find the ‘right’ people

Finding good SaaS sales people is never easy. And you already know that VP-of-whatever sales from that Fortune 500 ain’t gonna fit your small, scrappy, upstart.

That’s why managed WordPress Hosting company,Kinsta, takes a different approach when hiring for their sales team.

One of the best ways they scale internal sales is to reposition employees from within the existing company.

Many of their best sales reps actually started out on their support team. Their teams already work closely together. And having that support experience with in-depth product knowledge allows the sales reps to better answer questions for potential clients. (The added bonus is that they can even assist them throughout the onboarding process, too.)

That jives with the change thatKelly Schuurmade when building a team atIntercom. With a simple change of just the name (to ADR:Account Development Representative), they shifted focus from purely sales to relationship-building.

This pivot placed emphasis on strong partnerships, rather than just churning out sales that might not renew in a year. Intercom prioritized those who had already expressed interest in some way in the organization, and started feeding them the information they wanted to produce new leads: books, blogs, webinars.

This ADR set-up took off, and Intercom had to quickly increase their ADR team from three to 17 people. To ensure success of the new model, Intercom focused on ADR candidates who were passionate about the product they were selling, not just passionate about the one-off sale itself.

Evaluating talent with cold, hard data

Former CRO at HubSpot,Mark Roberge, puts the right people at the top of his process, too (and withrevenue growth of more than 6,000% in four years, who can argue?!)

Bringing his engineering background to the role, he applied metrics to the salesperson hiring process. He evaluated which employee attributes brought the greatest success, and then conducted his own Weird Science experiment to continue to hire the ‘perfect’ salesperson.

Roberge and his team built out three main criteria for successful candidates:

1. Their average quota attainment percentage
2. Their productivity
3. The lifetime value of the customer

Source: ForEntrepreneurs.com

These attributes then became the building blocks for every interview and were the scoring rubric for each potential employee.

Source: ForEntrepreneurs

Onboarding: show your people the way it’s done and get them excited about the product

The typical onboarding process for most SDRs means a lot of studying the product, learning the process, shadowing a seasoned employee or two, and running through potential scenarios.

The length of onboarding can vary.Nick Persicowas able to get that time down totrain new salespeople in four weeksbecause of his expedited approach.

First, he brings them in on a Saturday for an easy dry-run before the real action starts. (They better get their sleep on Sunday, though, because once the week starts, it’s all systems go.)

Week One: Learning to Ride a Bike

On-the-job training starts immediately, with the ideal scenario of making sales calls before lunch. Salespeople get a script and then spend the week working through their pitch and identifying any kinks or questions they have.

“You didn’t learn how to ride a bike from your parents telling you about every aspect of how the bike worked,” Persico said. “You just got on the bike, fell a bunch of times, and eventually figured it out.”

Week Two: Individualized Work

Training on the sales process happens as it’s necessary. If the SDR makes a sale or finds a qualified prospect, they’re taught what to do next. Not every person reaches these milestones at once, and this allows for individualized learning and attention.

Week Three: Fine-Tuning

Focus then shifts to corrective measures. If a salesperson has a deficit or weakness, it’s called to attention to make sure they prioritize it in their approach. Persico is looking for those who actively take the feedback.

A classic example is an over-reliance ondiscounting. Price objection comes up (“But when you compare thecost of other ecommerce platformscompared with yours…”) and the new SDR’s first impulse is to cave immediately.

This creates the opportunity to train new SDRs to (politely) push back and get the lead through a successful demo first, before later circling back to price (after value is better established).

Week 4: Taking Off the Training Wheels

Week 4 is kind of like Week 1 of the real deal. The SDRs are still technically onboarding, but they aren’t relying on others for help. They know their goals, and they know how to get there.

Now it’s sink or swim time.

Why product knowledge is critical to successful onboarding

At Hubspot, Roberge would take the onboarding opportunity to not only make sure every member of the team knows the playbook, but also walks a mile in the customer’s shoes.

They start out with learning the essentials: the product, the customer, the competition, the pros and cons. They are evaluated along the way to make sure they are hitting all their marks. But then, they pivot and take on the role of the customer.

The newbies are required to create their own blog, and then are tasked with driving traffic to it. From here they get to put every ounce of their own blood, sweat, and tears into the project and better understand the customer’s perspective. Even better, they can pinpoint how Hubspot and its product can save the day.

The salespeople at Hubspot don’t have to come up with their own solutions for what should happen next. The organization’s workflow model does that for them.

Source: ForEntrepreneurs

Finally, evaluate their process-driven performance for accountability

If the process is the way,judgebased on the process.

HubSpot automates their evaluations and sends them daily to SDRs and AEs.

Source: ForEntrepreneurs

Docurated has pinpointed11 key evaluation pointsfor sales reps. (Hint: it’s not just about how much money they bring in.)

1. How much time are the spending on the sale? Figure out the reasons why.
2. How quickly do they respond to inbound leads?
3. Are they integrating marketing into their approach?
4. How often do they close the deal?
5. What’s their average deal size?
6. You know that deal they made? How long did it take to close it?
7. How much does the salesperson cost to keep?
8. Are they losing sales?
9. How are they spending their time? How many meetings, emails, phone calls, etc have they made?
10. What is their sales volume?
11. Are they happy? (Pro tip: happy people tend to be loyal people)

When it comes to evaluating their approach,Steli Eftisees it as an opportunity for coaching and guidance.Working with SDRs on their phone style, he looks at:

1. Their goal for the call: what do they want to get out of this conversation?
2. How good is their pitch: Efti suggests breaking the pitch into three sections and helping the SDR walk through their method for each. Then, monitor the delivery.
3. Nothing but the truth: are the SDRs honest with the customer about what they can provide?
4. Confidence and control: is the SDR at ease with their script and the product?
5. Talking with a smile: is the SDR able to maintain enthusiasm and engagement?
6. Building a bond: can the SDR build a rapport and connection with the customer?
7. Conversational etiquette: interruptions and talking too much are a no-no.

Conclusion

Scaling anything is never easy.

Scaling well requires a subtle shift to take place. One that often goes unnoticed.

Successfully scaling requires you to rely less on innate ‘talent,’ and instead rely more on a solid system.

That has many ramifications. It changes the way you sell (based on processes and scripts). It changes the way you hire (product experts with empathy instead of ‘rockstar’ mercenaries). And it changes the way youjudgeperformance (based on process steps instead of simply the number of closes).

The bad news is that it’s not easy. It’s incredibly time consuming. And there’s gonna be missteps.

The good news is that taking steps in this direction, even before a single hire, will start to create a solid infrastructure that should eventually (one day) bear fruit (or $$$).

In 2011, Marc Andreessen made his prophetic statement that “software is eating the world.” Whether it’s hailing a ride, prepping your tax returns or watching a movie, you can do almost anything on demand. But while these on-demand options may have their origins in consumer services, B2B companies quickly learned that their customers preferred pay-as-you-go models over being locked into lengthy contracts. Welcome to the everything-as-a-service (XaaS) world.

Origins of the Everything-as-a-Service World

The introduction of cloud computing starting in about 2005 was the driving force behind the rise of everything-as-a-service. No longer were hosting environments confined to onerous yearly contracts and constrictive configurations. Hosting environments could now scale on demand to accommodate traffic as needed. This led to hosting hardware to be consumed by “as-a-service” models, either by infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) hosting. The National Institute of Standards and Technology defined them thus:

• PaaS:Deploys consumer-created or acquired applications onto the cloud infrastructure
• IaaS:Provisions processing, storage and other fundamental computing resources to deploy and run operating systems and applications

With so many technologists consuming hosting infrastructure in this new way, it’s no wonder that they in turn began creating applications that could be used on demand rather than confining the user to a contract. Software-as-a-service (SaaS) was born, replacing those one-time licensing fees and contracts with a recurring monthly commitment.

Industry Experts on XaaS

But most importantly, the SaaS model changed consumers’ mindsets, as they no longer thought in terms of having to “purchase software” but rather of subscribing to a service.

“From its early origins of SaaS, the cloud-based on-demand services category has evolved intoanything-and-everything-as-a-service that isn’t nailed to the floor. XaaS is the essence of cloud computing—a smorgasbord of utility-based offerings that can be consumed on a per-seat, per-month model, depending on usage,” explains Lesley MacDonald, Programs Manager at Dell EMC.

Dan Rahko, founder and CEO of SBT Partners, further simplifies the definition of XaaS as “basically any technology delivered over the Internet that used to be delivered onsite.”

As more and more as-a-service models began to emerge, a2014 IBM articleconcluded that “we can be said to be heading into the ‘X’ as a service or ‘XaaS’ era.”

Everything-as-a-Service in the B2B World

At Maxio, we see the possibilities for XaaS extending well beyond B2C companies and into the B2B world. In fact, if you are offering a B2B product or service and still locking people into extended contracts, you stand to lose in the near future to a competitor who realizes that our collective mindset has shifted. Look no further than these Maxio customers who are shaking things up with their on-demand, usage-based models.

Gravity Forms: Securing Business Leads Through Professional Contact Forms

The lead capture form is one of the most critical pieces for any B2B website. Rather than tasking your development team with building and optimizing this form for your sales funnel, you can turn to the experts atGravity Forms. They have mastered the lead-form-as-a-service and have become one of the most trusted WordPress plugin developers, promising “no drudgery, just quick and easy form-building.”

Spotio: Sales Enablement Software for Reps and Managers

How do you make sure that your sales reps are staying on task and set up for success in the field? While face-to-face communication is fantastic, that is hard to do on a consistent basis with a widely distributed team.Spotiohas developed a service that empowers sales managers to coach and support their team members, reducing sales rep turnover by 14% for their customers.

Zoey: An Ecommerce Platform for B2B Sellers

B2B sales are different from consumer sales, so B2B companies need an ecommerce platform that serves their unique needs.Zoey’secommerce platform-as-a-service empowers B2B companies to segment customers, generate quotes and restrict site access toapproved customers.

Pressable: The WordPress PaaS Solution

Many businesses have turned to WordPress to power their website—in fact,almost a third of websites are now run on this CMS.Pressablehosts managed B2B WordPress sites and keeps them running smoothly with a reliable, secure, fast platform backed by expert support.

The One Challenge All XaaS Businesses Face

Clearly, consumers and businesses are embracing the many benefits of the subscription model, and businesses should be looking at how to incorporate XaaS into their own roadmaps for future success. But there is one challenge that all B2B companies face in the XaaS world: how tohandle recurring billing, especially as amounts can vary from month to month. Whether you need to manage subscribers, collect recurring payments, issue one-time credits or coupons or even overcome failed payments due to credit card changes, look to Maxio, the SaaS company that leads in subscription billing.

We’ve created the best online solution for your recurring billing needs—remember, we power all those B2B companies mentioned above. In the world of everything-as-a-service, stop trying to build a subscription billing service yourself and let us handle this task for you. With our incredible Elastic Billing™, you can start billing the way you want with hyper-personalized offers made for a complex world.

SaaS. PaaS. IaaS. XaaS. Maxio has you covered.Schedule a demo to see how our solution can help you today.

One of the biggest drawbacks of running a service based business is that you only get paid for billable hours. After spending hours looking for clients and doing preliminary work, you only get paid for what you do. Whether you bill at $20, $50 or $200 an hour, your income is limited to the amount of hours you work. If you are smart, you can find a way to turn your services into products and make more money without having to work 80 hours a week.

If you offer a set of services that you feel you aren’t getting paid enough for but can’t justify raising your hourly rate, productizing may be your best option. You can offer your services as a package, with clear objectives and promises attached. The package could include a combination of several services you provide to make it look more appealing.

This is a strategy that many web-designers use. They offer a package that may include a specified number of pages, logo design, domain name registration and SEO marketing. Customers read these packages and feel like they are getting a great deal. But from your perspective, you may be making $75 an hour instead of $25. Your hourly rate will increase even further as you become more efficient.

The key to productizing services is to learn to work efficiently. Here are some tips:

• Create a template.Make sure that your service can be easily duplicated. If you can automate the process,you will be able to produce your services much more quickly.
• Make sure that your staff is well-trained.The faster they work, the more orders they can fulfill.
• Look for new tools to improve efficiency.Always be up to date on the tools of the trade. New technology can make a process a lot faster. This is especially true for high-tech companies and web developers. New software and CMS packages can let you do work in a few hours that used to take days.
• Be disciplined.Your process will never work if you keep straying from it. Make sure that you are disciplined about completing your process, while at the same time always refining it.
• Build a team.If you find other people who can produce the quality of work you expect, you can delegate to them and expand productivity. Having additional employees will also give you credibility and let people know that you can provide the support they need.

The trick is to develop a system that will make your business more efficient and package it in a way that lets customers see that they are still getting a great deal. When you begin productizing your services, you will almost certainly be making a lot more money than you were before and you’ll never look back.