Shabir Nudrat’s Post

So in the early days of SaaS, we looked mostly at ARR growth. Then, we realized NRR was just about as important. NRR is the mathematical key to keeping growth going and going. But now fast forward to today, and we have a large swath of public SaaS and Cloud leaders. And one thing that’s become clear is that not only does high NRR keep scaling well past $1B in ARR … so can net new customers. Yes, you will exhaust your core ICP and buyer at some point. But you have to keep growing that circle, that sweet spot of customers. So you can keep growing new customers ideally at least +20% a year, even at $100m+ ARR. And yes even at $1B+ ARR. What do we see? The leaders in SaaS and Cloud keep new customer count up in the double-digits … even at billions in ARR. The averages: + 13% new customer count growth + 22% ARR growth even at ... + 1.7B ARR on average Try to keep your customer count growing at least 50% as fast as your NRR. That ensures you have a future, and you aren’t overly reliant on upsells from the base. And most importantly, your net new customers are your future. This probably is your most important metric at all. It may be just as important a goal as ARR and NRR every year — if you really want to go long. Set a Net New Customer goal for this year. It will help you hit the 2026+ plan. And just as importantly, hopefully it will keep the team from pushing existing accounts so much, that they break them. That they leave.

SaaS means businesses with ARR $10m-$1bn. It means products that sell for $10k and $1m. It means super-sticky solutions and those where the replacement lift is negligible. Those who tell you there is one operating model that fits all aren’t worth listening to. Caveats aside, here’s what I think is happening with the current squeeze on CS, and why I think it's bad business. In the minds of many business owners, the importance of GRR has receded as NRR has taken centre stage. There are lots of reasons - multiplier impacts of even 1% drops in GRR, CAC, etc. - why I think that’s dangerous, but it’s happening. As the NRR star has risen, the need for CSMs to *own a number* has crystalised. Some CS leaders have pushed back, but most I speak to are advocates of CS owning expansion, as am I. Once upon a time, having a non-monetised function that *looked_after_customers* was seen as the price of admission for SaaS, and in some sectors that might still be the correct model (see those caveats above). But broadly speaking in 2024, if you’re not directly linked to new money you’re just another cost centre and attract the scrutiny that goes with that title. Prior to this bleed-over of selling responsibilities, Sales sold and CS renewed. The rise of NRR threw that understanding into flux. What to do?  A simplification of the choice now before business owners: 1️⃣ get the renewals folks to take on some selling 2️⃣ get the sellers to take on renewals The first still leaves two functions. The second leaves one. 🚨DING! DING!🚨 It’s a simplification, but fundamentally it’s accurate and has, in some cases, resulted in the complete elimination of CS as a function. (Yes, there’s a role for TAMs and Premium Support offerings to cover the CSM base, but I’ve yet to see a version of this that *hasn’t* meant Sales spending more of their time and energy on existing customers.) And I think it’s a mistake because it spectacularly undervalues the criticality of the renewal and its uniquely important role in the recurring revenue model. The last time I checked, churned customers are difficult to grow. Even stellar NRR can obscure all manner of retention horribleness. You can hit 130% NRR three years consecutively but if GRR is going backwards, you’re in trouble. There will come a point when the biggest cows in your herd have been milked dry and the sky will turn black with GRR chickens coming home to roost. Lose $1 of existing customer revenue and you need at least $5 of new revenue to cover it. And who are you looking to for that cover? Sales. The team you just handed quasi-CSM responsibilities to. Good luck. 🍀 Strong GRR is *still* the cornerstone upon which long-term SaaS success is built. Mess with it at your peril. And it is difficult to imagine anything that messes with it more than the elimination of the function that owes its very existence to the (once) universally acknowledged truth that nothing in SaaS is more important than the renewal.

Sales ops, RevOps—what’s the difference? They both lead to revenue growth, right? Not always. 👎🏼 Despite the buzz around revenue operations (RevOps), it’s surprising that less than half (48%) of companies have a RevOps function. When companies use sales ops to run RevOps, they often make three common mistakes that impact territory planning, cross-functional potential, and strategic forecasting. Here’s how: https://lnkd.in/g5exJXVS Fullcast, The Go-to-Market Cloud Ryan B. Dylan Ferguson Amanda Fletcher Susan Macomber Brad Warnock Tyler Orr Tyler Simons Ryan Christensen Joe Aboutariya Celena Ashcar #gotomarketcloud #dreamforce #INBOUND24

If you’re struggling to scale your SaaS, understand the “Unicorn Lead”. You were wired to think you need to reel in hundreds of new users monthly. It can work. But I’ll show you a better & faster way. It can add an extra $10k-100k/mo overnight if it’s done right. Instead of focusing on “more leads”. Focus on maximising the MRR / AOV of each lead. It’s more stressful to ask 100 users to pay you $1k/mo than it is to ask 1 Unicorn Lead to pay you $100k/mo. So what does a Unicorn Lead look like? Multi-billion dollar corporation: - Massive revenue - Long-term contracts - Large number of employees Target them with Google Ads. Trust me, it’ll make your life so much easier & simpler.

In the world of SaaS, it's not new customers that drive profitability. It's keeping the ones you get for a very long time. In reality, most companies are barely breaking even if not LOSING money in Year 1. Here's the math: Year 1: New ARR ($100K) Less Cloud costs to run the product (35K) Sales commissions on new deals ($30K) All the other opex costs like salaries, benefits, computers, licenses, travel, etc. ($30K) End of year 1 you're walking home with very little. In Year 2 When you're commission rates (generally) decrease to the renewal rate Is when you really see profitability ramp up. This is why understanding your churn and LTV is so important. Depending on the average life of your customer, it may not be profitable. In your company, how much focus is put on generating new business vs. keeping the customers you have for a very long time?

SaaS companies have a massive flaw. They believe annual plans upsell visitors. While in reality, they're just annoying. I'm not talking about annual plans in general. I'm talking about them being the default option. This is what happened when I wanted to buy Scalenut. 1. I visited their website and saw a great deal. 2. Took a look at the features and decided. 3. Prepared a credit card and $75 4. Was just about to purchase 5. Saw a charge for $150 6. Felt deceived 7. Left Why would you assume people are buying the annual plan? Why not assume everyone wants the monthly plan? That way, the price is transparent to everyone. And the people who want the annual plan will only have more incentive to purchase because of the discount. Most SaaS companies are just legal liars.

https://bit.ly/3XAMgNm - If you’re in sales, you’ve heard that between 1% and 15% of your total addressable market (TAM) is looking to start their buying journey every week. Learn our strategy to reach your TAM every week and invite those starting their journey to engage with you on their terms. Follow me to get notifications of our upcoming live stream show for Tech, SaaS, and Services. You can watch anonymously and ask questions live. #NoMarketingAutomation #NoColdCalling #NoBDRs #NoEmailForms #newbusinessdevelopment #b2bgrowth #digitalselling #b2blivestreaming #b2bscaleup

https://bit.ly/3XAMgNm - If you’re in sales, you’ve heard that between 1% and 15% of your total addressable market (TAM) is looking to start their buying journey every week. Learn our strategy to reach your TAM every week and invite those starting their journey to engage with you on their terms. Follow me to get notifications of our upcoming live stream show for Tech, SaaS, and Services. You can watch anonymously and ask questions live. #NoMarketingAutomation #NoColdCalling #NoBDRs #NoEmailForms #newbusinessdevelopment #b2bgrowth #digitalselling #b2blivestreaming #b2bscaleup

https://bit.ly/3XAMgNm - If you’re in sales, you’ve heard that between 1% and 15% of your total addressable market (TAM) is looking to start their buying journey every week. Learn our strategy to reach your TAM every week and invite those starting their journey to engage with you on their terms. Follow me to get notifications of our upcoming live stream show for Tech, SaaS, and Services. You can watch anonymously and ask questions live. #NoMarketingAutomation #NoColdCalling #NoBDRs #NoEmailForms #newbusinessdevelopment #b2bgrowth #digitalselling #b2blivestreaming #b2bscaleup

https://bit.ly/3XAMgNm - If you’re in sales, you’ve heard that between 1% and 15% of your total addressable market (TAM) is looking to start their buying journey every week. Learn our strategy to reach your TAM every week and invite those starting their journey to engage with you on their terms. Follow me to get notifications of our upcoming live stream show for Tech, SaaS, and Services. You can watch anonymously and ask questions live. #NoMarketingAutomation #NoColdCalling #NoBDRs #NoEmailForms #newbusinessdevelopment #b2bgrowth #digitalselling #b2blivestreaming #b2bscaleup