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Mastering
Hypergrowth
Adam Tesan
CRO, Chargebee
5 Strategies from
Chargebee
SaaS market is forecast to reach $122.6
billion in 2021
Source: Gartner
Key Levers for Hypergrowth
Retain your
customers
Expand globally
Experiment with
pricing
Diversify your
acquisition channels
Use data to drive
growth
You are leaving money on the table if you are not experimenting
with pricing
Optimize pricing with experimentation
Experiment with different pricing
combinations
Run pricing A/B tests for
different segments.
Build an adaptable pricing
structure
Product packaging to
incentivize upsells
Key consideration: How do you extract value / what are
your value levers?
Macro Pricing Considerations:
● Market attributes
● Brand positioning
● Product attributes
● Consumer demand
● Competition
● Economic trends
● COG’s
● North Star metrics
“We incentivized add-on purchases to customer subscriptions. Our customers were enabled to mix,
match, and add coffee creamers, coffee pods, or apple cider vinegar gummies based on their
preferences. This strategy worked in the interest of our customers as well as increased our average
order value(AOV) without us having to invest in digital ads to acquire new customers for our family of
products.”
- Paul Kapsner, Director of Finance, Superfoods Company
Make customers your #1 Priority
Plan proactive strategies for customer retention
Churn prediction
for long-term
retention strategies
Leading indicators
for at-risk customers
Long-term contracts
to ensure product
stickiness
User training to
ensure better feature
adoption
We did an industry analysis and did a weekly report on industries to
figure out who was contracting, expanding, paused etc. Our planned
churn rate was 10% for the period, the actual was 0.23%.
- Debbie Barrafato, CFO, RiseVision
Localization and Global Expansion
Scaling Globally
Localize your
product
Prepare your org for
global expansion
Identify markets to
break-into
Ensure tax and
finance readiness
Market prioritization: Key evaluation criteria
Criteria Weight Metric evaluated • Green • Yellow • Red
Market
attractiveness
Market size 70% Core TAM ($) • >$500M • $100-500M • <$100M
Market growth 10% % Growth CAGR • >20% • 10-20% • <10%
Willingness to use
3rd party solution
20% Estimated penetration of 3P • >20% • 10-20% • <10%
Ability to win
Competitive
positioning
10% Number of local competitors • No major local
competitor
• 1-3 popular local
competitors
• 4+ well-known local
competitors
10% Quality of competitors • No local player
with x+ features
• 1-2 local players with x+
features
• 3+ local players with x+
features
Integration required 5% Number of local providers of x • 0-2 local vendors • 3-5 local vendors • 6+ local vendors
5% Additional integration required • 0-2 local vendors • 3-5 local vendors • 6+ local vendors
5% Additional integration required • 0-2 local vendors • 3-5 local vendors • 6+ local vendors
Product 25% Product language translation • No significant
changes
• Front end translation • Full product translation
Local team 20% Additional team required to support local
expansion (e.g., sales, customer
services)
• No local team • 3-5 local headcount • Full local team
Regulatory change /
effort required
20% Local regulatory / compliance
requirement, and future expectations
• Low • Medium • High
Developing a go-to-market strategy
Customer
segments and
goals
Product
Sales
Entry strategy
TAM: Understand TAM in market
Target customer segments: Define target customer and relative positioning in market
Ambition: Articulate ambition for sales goal and ramp
Localization: Define steps to tailor product suite to unique local and target customer requirements (e.g., language,
features, etc.)
Integrations: Understand requirement for high priority integrations
Regulatory: Overview of the high priority regulatory considerations (current and upcoming)
Pricing: Define pricing strategy across products and customer segments in market
Channel strategy: Define sales channel based on customer segments (e.g., direct vs. indirect, inside vs. outside)
Partners: Identify high potential partners to accelerate growth in market
Coverage and roles: Align on structure of sales team (number of roles, mix of roles)
Account planning: Identify highest opportunity accounts to win based on target customer, competitive strengths,
partnerships
Marketing: Build local brand strategy and lead generation processes
Case studies: Describe key successes for market entry and strategy/approach used
Buy vs. build: Profile current competitive positioning and identify potential local acquisition targets
Diversify your acquisition channels
Discover PMF in different markets & segments
Understanding PMF for
different segments as you
scale
Different markets require
different sales motions
Going upmarket Vs
downmarket
Source: The Science of Scaling, Mark Roberge
“Product led growth drives sales led (enterprise) growth. They’re not opposing
forces, they complement each other.” Russell Lester, CFO, Calendly
Growth driven by data
Which Revenue Metrics are your growth Levers
Identifying revenue
optimizing opportunities
Forecast &
prevent churn
Map customer
behavior patterns
Viewed at a product / segment level
Key Metrics to Drive Strategy:
● ARR
● ACV
● ASP
● Logos
● LTV
● CAC
● ARPU
● Retention
● Churn
“We mapped out the entire customer journey starting from, which campaign they came from, to where
we were losing them, in order to understand the customer journey and make it better” - Skip Shean,
Consultant, TradeIdeas
THANK YOU

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Mastering Hypergrowth: 5 Growth Strategies with Chargebee's CRO

  • 2. SaaS market is forecast to reach $122.6 billion in 2021 Source: Gartner
  • 3. Key Levers for Hypergrowth Retain your customers Expand globally Experiment with pricing Diversify your acquisition channels Use data to drive growth
  • 4. You are leaving money on the table if you are not experimenting with pricing
  • 5. Optimize pricing with experimentation Experiment with different pricing combinations Run pricing A/B tests for different segments. Build an adaptable pricing structure Product packaging to incentivize upsells Key consideration: How do you extract value / what are your value levers? Macro Pricing Considerations: ● Market attributes ● Brand positioning ● Product attributes ● Consumer demand ● Competition ● Economic trends ● COG’s ● North Star metrics
  • 6. “We incentivized add-on purchases to customer subscriptions. Our customers were enabled to mix, match, and add coffee creamers, coffee pods, or apple cider vinegar gummies based on their preferences. This strategy worked in the interest of our customers as well as increased our average order value(AOV) without us having to invest in digital ads to acquire new customers for our family of products.” - Paul Kapsner, Director of Finance, Superfoods Company
  • 7. Make customers your #1 Priority
  • 8. Plan proactive strategies for customer retention Churn prediction for long-term retention strategies Leading indicators for at-risk customers Long-term contracts to ensure product stickiness User training to ensure better feature adoption
  • 9. We did an industry analysis and did a weekly report on industries to figure out who was contracting, expanding, paused etc. Our planned churn rate was 10% for the period, the actual was 0.23%. - Debbie Barrafato, CFO, RiseVision
  • 11. Scaling Globally Localize your product Prepare your org for global expansion Identify markets to break-into Ensure tax and finance readiness
  • 12. Market prioritization: Key evaluation criteria Criteria Weight Metric evaluated • Green • Yellow • Red Market attractiveness Market size 70% Core TAM ($) • >$500M • $100-500M • <$100M Market growth 10% % Growth CAGR • >20% • 10-20% • <10% Willingness to use 3rd party solution 20% Estimated penetration of 3P • >20% • 10-20% • <10% Ability to win Competitive positioning 10% Number of local competitors • No major local competitor • 1-3 popular local competitors • 4+ well-known local competitors 10% Quality of competitors • No local player with x+ features • 1-2 local players with x+ features • 3+ local players with x+ features Integration required 5% Number of local providers of x • 0-2 local vendors • 3-5 local vendors • 6+ local vendors 5% Additional integration required • 0-2 local vendors • 3-5 local vendors • 6+ local vendors 5% Additional integration required • 0-2 local vendors • 3-5 local vendors • 6+ local vendors Product 25% Product language translation • No significant changes • Front end translation • Full product translation Local team 20% Additional team required to support local expansion (e.g., sales, customer services) • No local team • 3-5 local headcount • Full local team Regulatory change / effort required 20% Local regulatory / compliance requirement, and future expectations • Low • Medium • High
  • 13. Developing a go-to-market strategy Customer segments and goals Product Sales Entry strategy TAM: Understand TAM in market Target customer segments: Define target customer and relative positioning in market Ambition: Articulate ambition for sales goal and ramp Localization: Define steps to tailor product suite to unique local and target customer requirements (e.g., language, features, etc.) Integrations: Understand requirement for high priority integrations Regulatory: Overview of the high priority regulatory considerations (current and upcoming) Pricing: Define pricing strategy across products and customer segments in market Channel strategy: Define sales channel based on customer segments (e.g., direct vs. indirect, inside vs. outside) Partners: Identify high potential partners to accelerate growth in market Coverage and roles: Align on structure of sales team (number of roles, mix of roles) Account planning: Identify highest opportunity accounts to win based on target customer, competitive strengths, partnerships Marketing: Build local brand strategy and lead generation processes Case studies: Describe key successes for market entry and strategy/approach used Buy vs. build: Profile current competitive positioning and identify potential local acquisition targets
  • 15. Discover PMF in different markets & segments Understanding PMF for different segments as you scale Different markets require different sales motions Going upmarket Vs downmarket Source: The Science of Scaling, Mark Roberge “Product led growth drives sales led (enterprise) growth. They’re not opposing forces, they complement each other.” Russell Lester, CFO, Calendly
  • 17. Which Revenue Metrics are your growth Levers Identifying revenue optimizing opportunities Forecast & prevent churn Map customer behavior patterns Viewed at a product / segment level Key Metrics to Drive Strategy: ● ARR ● ACV ● ASP ● Logos ● LTV ● CAC ● ARPU ● Retention ● Churn “We mapped out the entire customer journey starting from, which campaign they came from, to where we were losing them, in order to understand the customer journey and make it better” - Skip Shean, Consultant, TradeIdeas

Editor's Notes

  1. For this session, I’d like to walk you through the five growth strategies we have identified that have helped our customers sustain hyper-growth: Experiment with pricing Retain your customers Expand globally Diversify your acquisition channels Use data to drive growth
  2. Macro Pricing Considerations Market attributes - large market vs niche Rev goals Brand positioning - budget, professional , small firms, enterprise etc. Product attributes Consumer demand competitions - perception of you and your comp on G2 / Capterra Economic trends COG’s North Star metrics - this could dictate pricing strategy ARR growth / Customer acquisition / Churn / CAC - LTV
  3. Extract Value / Levers Optimize plans for add on’s Create upsell opportunities Tiered pricing Defeature lower plans but increase revenue volume they can process Rebased core modules like analytics from flat fee to % of revenue so we can get more from larger customers Tier based , volume based Decouple integrations for different sized customers Package of services
  4. Testing / Experimenting (should do every 1 -2 years) A / b test conversion rates on line for self serve (Launch Plan experiments we are doing), if it’s not online looking at pipeline conversion metrics, discounting rates from list etc. , Look at our different plans over time, for us we look the % of AIV through our platform vs the standard rates Are plans purchasing to their revenue rates? Do we an have an opp to higher or lower prices based on this Rate of growth by plan - which ones most popular and why? Upgrade trends - how do they move between plans - for us customers weren’t “skipping” our middle plan so our “upgrade path still holds” Lost and Closed deals analysis - why were we winning and losing deals and how did pricing play - we look at pricing impact on deals by plan, segment and geo (smallest impact on enterprise and highest impact in EU
  5. According to Mckinsey & company SaaS businesses that aim to achieve higher growth put as much attention into caring for existing customers as they do into acquiring new ones, investing in specific postsales constructs to increase cross-sell, upsell, and retention and sourcing the right talent, tools, and analytics. These efforts, combined with strong pricing and product support, result in median net retention rates (NRR) of 120 percent or more—which means these businesses are able to deliver 20 percent growth every year without adding a single new customer.
  6. Churn prediction for long-term retention strategies: Having the ability to predict future churn rates is necessary because it helps your business gain a better understanding of future expected revenue. It also allows you to focus on customers that are at a higher risk of churning. Leading indicators for at-risk customers: Create a system to have all your leading indicators for churn in place: be it monitoring your customers’ revenue growth, product usage and logins, # Support tickets as any anomaly in these are tell tale signs of an at-risk customer. Long-term contracts to ensure product stickiness: Onboard more customers on long-term contracts so you buy time to showcase the value of your product thereby increasing stickiness which is great for retention. User training to ensure better feature adoption: Actively run specific campaigns in the form of newsletters, workshops & webinars to keep educating your customers about your product, new feature releases etc.
  7. RiseVision was able to reduce their churn percentage by watching out for industry specifics trends and actively reaching out to at-risk customers. We did an industry analysis and did a weekly report on industries to figure out who was contracting, expanding, paused, etc. Our planned churn rate was 10% for the period, the actual was 0.23%.- Debbie Barrafato, CFO, RiseVision
  8. Identify markets to break-into Doing in-depth research before entering a new market is important - does your product have a demand in the market, is your product ready for this specific market? Prepare your org for global expansion Expanding your business globally would mean different cultures, coming together. It’s critical to get your teams ready for the expansion as well. Localize your product For a new market to trust and buy your product, it has to look and feel local too. This includes using local address and date formats, displaying the correct currency and units of measure, choosing appropriate colors and graphics, and much more. Ensure tax and finance readiness This is really important especially if you’re planning to expand to Europe, the proper tax and finance infrastructures need to be set up early on to ensure that you are receiving timely reporting and that your foreign entity is adhering to local corporate policies and procedures.
  9. Understand PMF for different segments as you scale It’s really important to not keep focusing on just one segment and branch out. Going upmarket Vs downmarket Getting traction in a certain segment (SMB/Midmarket/Enterprise) and then deciding to cater to a different segment can prove to be difficult as this would mean building out an entirely new GTM motion that would involve Marketing, Sales & Customer Success. Different markets require different sales motions Enterprise segments usually require a sales-driven model while startups / SMBs prefer a self-serve model.
  10. A 360° view of your subscription metrics will enable you to drive data-backed decisions that keep your SaaS aligned with growth. Every company’s context is going to be different and there are many potential paths to top-line growth. The right set of revenue metrics will help you better understand your current position and identify the right growth levers to pull for your company.
  11. Always tie evidence back to your strategic goals. What are your top three goals for top-line growth? Identifying your goals, and tying it back to data, is what will make metrics relevant for strategy. By identifying goals tied to actionable metrics, and assigning KPIs to track them, companies can measure progress towards goals and quickly pivot strategy. Acquiring / Retaining / Monetizing