SaaS Business Growth

The shift from seats to agents pressures SaaS margins. At the same time, the longstanding practice of getting enterprise customers to pre-commit and also prepay for functionality they may never deploy will get harder as CIOs look to free budget for their own LLM costs. To weather the storm, some SaaS companies have increased prices. This boosts revenue and margins in the short-term but can't be done repeatedly and creates even greater scrutiny over shelfware as procurement teams right-size and shift contracts to "pay as you go." To achieve sustainable growth, SaaS companies need to become hyperefficient at sales and marketing. Here are common ways to do so and who's doing it well: 1. PLG. Shopify and Atlassian exemplify efficient go-to-market based on product-led growth with free trials, low-friction upgrades and upsells. Their sales teams only need to get involved in the biggest opportunities at the largest accounts; every other step in acquisition, commercial transaction, activation, onboarding, and growth is self-service and automated. 2. Vertical SaaS. Guidewire Software and Veeva Systems are laser-focused on insurance and life sciences, respectively. Rather than casting a wide net, they spear-fish with deep domain knowledge and purpose-built solutions for that industry's specific workflows and regulatory requirements. Guidewire doesn't need to buy Super Bowl ads– their annual customer conference is the Super Bowl for property & casualty insurance executives. Nearly zero GTM effort is wasted– unsurprisingly they're the two most efficient on the list. We modeled Hearsay Systems after both these companies, and this focus allowed us to win incredible market share among Fortune 500 banks & insurers despite only raising $60M in totality. 3. Relocate operations to lower-cost regions and AI. This is private equity's favorite playbook to take costs out of companies they buy. Field sales continues to shift more to Zoom, which means you can hire AEs anywhere. Inside sales contributes a greater % of revenue as PLG motions are established. AI handles top-of-funnel leads qualification and generating marketing content and campaigns. 4. Focus on gross revenue retention. Because of high customer acquisition costs in #SaaS, leaky buckets are margin killers. Use LLMs to help customer success teams analyze product usage, segment cohorts, and identify opportunities to increase value realization. Put in guardrails to prevent sales reps from overselling an account, as doing so only creates churn in the next renewal cycle. 5. Introduce another product line. This only works if your new product has the same buyer as your existing products. Many SaaS acquisition pro formas fail to actualize for this reason, as it's not actually feasible to have the same AE sell both old and new products. Every SaaS company right now needs to double down on one or more of these levers in the AI era.

Salesforce just fired the starting gun on a seismic shift in how we pay for software. At Salesforce #Agentforce, they announced they’re moving away from the traditional per-seat SaaS model to a consumption-based pricing for their AI agents. This is huge. Why? Because it signals the end of paying just to have access to technology. Instead, we’re moving toward paying for outcomes—the actual value delivered. Think about it. In a world where AI agents can perform the job functions of entire departments, does it make sense to charge per seat? Probably not. Here’s what’s changing: - From access to outcomes: Companies will pay for what the AI actually accomplishes. - From subscriptions to value: Pricing adjusts based on usage and results. - From Software-as-a-Service to Agent-as-a-Service: Technology that collaborates with you as a partner This isn’t just a tweak in pricing—it’s a radical upending of commercial models for large SaaS companies. What does this mean for businesses? - Budgeting will evolve: Costs align directly with value received. - ROI becomes clearer: Easier to measure the direct impact of technology investments. - Greater flexibility: Scale usage up or down based on needs without worrying about seat counts. It’s an exciting time, but also a challenging one. Is every SaaS company ready to embrace a model where companies pay directly for the value they receive? At Uniti AI, we’ve been thinking along these lines. We price our AI agents based on the amount of work they do, not on how many seats a company has. I believe this is the future. What do you think? Is the per-seat model on its way out?

I've studied data on 4,000+ software companies over the past 8 years. Forget LTV:CAC, look at this instead 👀 Gross margin-adjusted CAC payback period & net dollar retention (NDR) are usually looked at separately. If you bring the two metrics together, they're the strongest predictors of *long term* & *profitable* growth: 1️⃣ High NDR (100%+), low CAC payback period (<18 months) -- Median growth rates are 65% YoY -- Median Rule of 40 is 45% 2️⃣ High NDR (100%+), high CAC payback period (18+ months) -- Median growth rates are 35% YoY -- Median Rule of 40 is 5% ^Enterprise-focused products often fall into this category 3️⃣ Low NDR (<100%), low CAC payback period (<18 months) -- Median growth rates are 25% YoY -- Median Rule of 40 is 35% ^PLG businesses often fall into this category 4️⃣ Low NDR (<100%), high CAC payback period (18+ months) -- Median growth rates are 20% YoY -- Median Rule of 40 is 0% --- This data comes from the annual SaaS benchmarks survey w/ my friends at High Alpha. Please help us recreate it for 2025: https://lnkd.in/ga9H2NZ2 PS: There's limited time left and we're on track for a record breaking amount of data 🤞🙏 #saas #benchmarks #growth

Ever wondered why despite immense potential, some SaaS companies struggle to scale and achieve profitability? I recently went deep into a compelling discussion that shed light on the vital role of business metrics in SaaS growth. One anecdote stood out: the story of Salsify, a company that enhanced its trajectory by relocating its European headquarters to Lisbon, symbolizing a strategic shift in optimizing operations. The central theme was crystal clear: "If you can't measure it, you cannot improve it." Accurate metrics are not just numbers; they shape strategies, align teams, and spark growth. But what's the secret formula? Key takeaways include: - The Rule of 40: A SaaS company's growth rate and profitability combined should exceed 40%. - Net New ARR: Monitor bookings via net new Annual Recurring Revenue (ARR), encompassing new customer ARR, expansion ARR from existing customers, and losses from churned customers. - Sales Funnel Efficiency: Deploy a holistic funnel that includes onboarding, retention, and expansion. - Sales Team Metrics: Productivity per salesperson and timely hiring are crucial to meet growth targets. - Customer Economics: Balance the Customer Acquisition Cost (CAC) against the Lifetime Value (LTV). Aim for an LTV to CAC ratio of 3:1 and recover CAC within 12-18 months. - Negative Churn: Expansion revenue should ideally outpace revenue losses from churned customers for sustainable growth. Metrics like these can transform a SaaS company from merely surviving to thriving. It's fascinating how strategic measurement and adjustment can turn potential into proven success. How do you leverage metrics to steer your SaaS business towards growth and profitability? Share your experiences and insights! #SaaSMetrics #GrowthStrategy #BusinessAnalytics #SaaS #CustomerRetention #StartupGrowth #ScaleYourBusiness

12 Metrics Every SaaS CFO Should Know 📊 There are many SaaS founders who think tracking revenue means they understand their business. Well, they're wrong. In my job as a fractional CFO, I've worked with dozens of SaaS companies and seen the same pattern over and over. Founders get excited about growth numbers while completely missing the unit economics that determine if they're building something valuable or just burning cash with recurring revenue on top. ➡️ REVENUE METRICS See, your foundation starts here, but most founders calculate these wrong. MRR shows your predictable revenue stream. You need to count subscription fees only, not setup costs. Think about it this way: if customers aren't committed to pay next month without any sales effort from you, it's not recurring revenue. ARR gives you the annualized view, but don't just multiply MRR by 12 if you have annual contracts. Those annual customers contribute their full contract value to ARR immediately when they sign. Revenue Churn Rate tells you how much revenue you're losing from cancellations. You know what's painful? Losing one enterprise customer worth 10 small customers. Net Revenue Retention shows whether existing customers are growing their spend with you. Above 100% means expansion exceeds churn. Below 100% means you're stuck on a customer acquisition treadmill. ➡️ RETENTION & ENGAGEMENT METRICS Logo Churn Rate measures what percentage of customers you lose. Good SaaS companies see less than 5% annual churn. Higher numbers? You've got product market fit problems. Activation Rate tracks users reaching their first success moment. Here's the thing most SaaS companies lose customers during onboarding, not after they've experienced value. ➡️ GROWTH & EFFICIENCY METRICS Customer Acquisition Cost includes all sales and marketing expenses, not just ad spend. Sales salaries, tools, events, content creation... if you wouldn't spend it without trying to acquire customers, it counts. LTV represents total gross profit from a customer relationship. You need to use gross margin because hosting, support, and delivery costs eat into actual customer value. CAC Payback Period shows how long it takes to recover acquisition costs from gross profit. Most investors want this under 12 months. Burn Multiple measures how efficiently you're converting cash into ARR growth. Simple formula: net burn divided by net new ARR. ➡️ STRATEGIC INDICATORS Rule of 40 balances growth and profitability. Add your growth rate to your profit margin. Above 40% shows you can grow efficiently. Gross Margin reveals your business model health. SaaS companies should see 80%+ gross margins. Lower than that? You're probably not selling software. === That's my take on the 12 metrics that separate sustainable SaaS businesses from expensive billing systems. What metrics does your team track religiously? Let me know in the comments below 👇

Most FP&A pros at SaaS companies track ARR and churn. That's not enough. If you're only watching a handful of metrics, you're missing the signals that predict what happens next. After years of building FP&A functions at tech companies, I've learned that SaaS metrics fall into 5 distinct categories: 📌 𝗧𝗼𝗽𝗹𝗶𝗻𝗲 & 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 • Paid Unique Subscriptions – Volume of paid acquisitions without dollar amounts • ARR – Shows growth or decline of recurring revenue • Bookings vs Revenue – Subscription commitments without accounting adjustments • ACV – Are you landing bigger deals over time? • ARPU – Can you grow revenue via pricing, add-ons, or expansion? • Net Burn Rate – Available cash to monthly expenses. Predicts your runway. 📌 𝗠𝗥𝗥 𝗖𝗼𝗺𝗽𝗼𝗻𝗲𝗻𝘁𝘀 • Retained – MRR kept from existing customers • Expansion – MRR added from existing customers • New Sales – MRR from new customers • Resurrected – MRR from former customers returning • Contracted – MRR lost from downgrades • Churned – MRR lost from cancellations 📌 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 • Customer Churn / Revenue Churn – Active and passive unsubscribes • Renewal Rate – Existing customers who renewed • Revenue Retention – Value retained vs original value • Average Lifetime – How long customers stay subscribed • Customer Lifetime Value – Total value over average lifetime 📌 𝗖𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 • Marketing Expense (E/R) – Marketing as percent of revenue • CAC – Total marketing expense per acquired customer • CPAS – Cost per acquisition by segment (e.g., TV, paid social) • MROI – Cash generated by new customers vs marketing spend • Marketing Payback – Months to repay marketing investment (12 / MROI) 📌 𝗟𝗲𝗮𝗱𝗶𝗻𝗴 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀 • Landings – Website or store traffic • Trials / Account Creations – Free sign-ups before subscription • Period Mix – Annual vs Monthly contract ratio • Plan Mix – Shares of different pricing tiers • Qualified Leads – Leads meeting target criteria • MAU – Engagement predicts retention • NPS – Qualitative perception of value • Customer Engagement Score – How engaged customers are with the product 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸𝘀 𝗳𝗼𝗿 𝗚𝗿𝗼𝘄𝗶𝗻𝗴 𝗦𝗮𝗮𝗦 𝗦𝘁𝗮𝗿𝘁𝘂𝗽𝘀: ✅ LTV > 3x CAC ✅ Months to Recover CAC < 12 Months Use these metrics to optimize marketing investments, evaluate ROI across lead sources, and segment by product, vertical, or geography. 📌 Want more frameworks like this? I've compiled my 𝗧𝗼𝗽 𝟭𝟬 𝗙𝗣&𝗔 𝗜𝗻𝗳𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰𝘀 – free for my followers. 👉 Get them here: https://lnkd.in/eZt8u_Ar What SaaS metrics do you find most useful for decision-making? Drop it below 👇 -Christian Wattig

🎯 Strategy is About Making Hard Choices, Not Fancy Plans Here are three choices (out of many) that really played out in my journey, and are decent examples. 1️⃣ “Where to play and how to win” is not theory. It’s a commitment. Around 2012, when everyone around us was chasing global offshore work and SaaS clients, we made a conscious choice at INT.: 👉 Focus on Indian enterprises, especially regulated industries like BFSI and Healthcare. - It wasn’t the obvious choice. - Margins looked better elsewhere. - Growth stories sounded sexier elsewhere. But we knew something important: - We develop enterprise delivery capabilities for scale & security - These enterprises valued trust, continuity, and long-term partners. - They want value for money - and if you can make profit serving them, you can make profit in most geographies. That single choice shaped everything that followed—our capabilities, our people, and our positioning. Strategy begins when you decide where to play at a given time. The decision will not be right when you start, but you have to make it right. You may not have insight on how to make it right, but you need to find the way. 2️⃣ Strategy is a living logic. Test it. Break it. Adapt it. We once invested heavily in building an ERP product for Indian enterprises. The initial traction was promising. But over time, the reality became clear: - The cost of maintaining and selling ERP in India was too high. - Our target audience preferred established global brands. - Our internal strengths were better aligned with customisation and integration. We shut the product down and pivoted to set on the path to become a system integrator. It isn’t easy. But it is necessary. This step makes it a positive sum game for us and the OEMs. You don’t need to abandon your strategy every quarter. But if your assumptions change—and you’re still following the old script—you’ll burn time, money, and morale. 3️⃣ Strategy is creative problem-solving for creating competitive advantage based on our strengths SaaS is supposed to be about: Recurring revenue. High margins. Scalable. 👉 Most SaaS businesses today are actually Software-as-a-Subscription, not Software-as-a-Service. - They optimise for ARR, CAC, and valuation multiples. - But in the name of “scale,” they quietly drop the service element. I asked a simple question: “Where is the real value being created — in the code, or in how it's adapted and serviced?” So, we ran an experiment. 💡 Give the software for free. Charge only for service. - Clients didn’t pay for licenses or per-user pricing. - They only paid for implementation, configuration, and support. The result? - Clients got real ROI. - We created real trust. - And we got paid to deliver actual outcomes—not promises. It was a contrarian strategy, but it worked because it solved a real problem: SaaS fatigue and poor ROI. Strategy isn’t always about doing what the market rewards. Sometimes, it’s about doing what the customer values.

In the last 3 years, I've talked to 300+ SaaS founders. Initially, my focus was solely on LinkedIn content marketing to drive inbound growth. Despite solid engagement and impressions, actual lead conversions remained elusive. I asked to dive deeper, collaborating closely with sales, product marketing, paid media, and SEO teams. That's when it became clear: Messaging was fragmented. The founder's vision differed from the sales team's narrative, marketing positioning was inconsistent, and content wasn't converting effectively. Here’s the strategic framework we implemented to solve this: → Narrative Alignment: We unified messaging across all teams, aligning brand storytelling with sales conversations. → Integrated Inbound-Outbound Strategy: Combined targeted outreach with educational content to capture high-quality leads. → Intent-based SEO: Enhanced discoverability by aligning content precisely with buyer intent, driving organic conversions. → Engagement Automation: Automated nurturing to proactively manage and convert interest into leads. → Strategic Community Building: Cultivated active communities around clear brand missions, fostering advocacy and referrals. This integrated, multi-layered approach transformed fragmented efforts into a cohesive, high-performing growth engine. P.S.: If you're a SaaS founder wanting to align your brand messaging and amplify your inbound growth strategically, let's connect.

Lack of data isn’t the most common issue I see amongst SaaS B2Bs. It’s 𝙙𝙖𝙩𝙖 𝙤𝙫𝙚𝙧𝙬𝙝𝙚𝙡𝙢. I’m not going to teach you to suck eggs. Tracking metrics is key to achieving growth goals. We can measure just about anything, and AI is helping analyse ever-larger quantities of data. But a problem remains: which metrics should you focus on? That’s the wrong question. Often leads to picking metrics based on available data. Better: what do you want to change? I think about metrics from a UX lens. SaaS B2Bs have one fundamental: adding value to their user If you’re focused on anything else (monetisation, revenue), you won’t be here long. So the right metrics should inform what you need to change to enhance the UX. 𝟭. 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 Monitor for obstacles that prevent users from signing up and accessing value quickly. For PLG, optimise the onboarding process to channel to activation point. For non-PLG, ensure landing pages are designed to convert (hero, pain, product, social proof, action, address objections). Example KPIs: Traffic to sign-up conversion rate, free sign-up conversion rate 𝟮. 𝗔𝗰𝘁𝗶𝘃𝗮𝘁𝗶𝗼𝗻 & 𝗘𝗻𝗴𝗮𝗴𝗲𝗺𝗲𝗻𝘁 Explore user behaviour data for patterns. Gather feedback (both active and churned users). Understand what action(s) users perform to realise your product’s potential. Then leverage to make it quick and frictionless for users to achieve success. Example KPI: Activation rate, time to value 𝟯. 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 Guide new users toward being regular, active users. Learn the features that are most valuable and what’s missing, directly from users. Feedback and user communities are great sources. Offer best practices, launch new features, and continuously enhance your product to help users achieve their goals. Example KPIs: Net revenue churn, retention rate 𝟰. 𝗔𝗱𝘃𝗼𝗰𝗮𝘁𝗶𝗼𝗻 Possibly overlooked because it’s tricky to measure. In short, your product needs to delight users so much that they share it with others. Seamless UX is one aspect, but making it easy to share is the other. Pitch does it by throwing a “Made with Pitch.com” invitation at the end of every deck. Example KPIs: Active user growth rate, the virality K-factor I collated the most common SaaS metrics and suggested benchmarks from sources like Elena Verna, ProductLed, and OpenView Partners👇 Just remember these key points: - Metrics should change behaviours – what do you want to change? - Opt for leading metrics, not lagging – react now, not 6 months down the line  - Choose metrics relevant to your business – market size, growth stage, goals - Concentrate on 2-3 metrics at a time (no more than 5) – do one thing well, not a dozen poorly Any metrics I missed? 👇 #growth #strategy #marketing Like this? Give me a follow for more expert-led marketing strategies. 

Many software and SaaS businesses are being structurally rewired from the inside out. The old growth model rewarded relationship-led selling, broad product suites and expansion through headcount. Strong networks opened doors. Scale signalled safety. Sales teams shaped the buyer’s thinking in the room. That model worked when information was scarce and switching felt risky. Today, that logic is fading fast. Authority is built in public. Buyers self-educate long before they speak to Sales. Product comparisons happen before discovery calls. Peer reviews often carry more weight than pitch decks. Breadth is no longer enough. Depth wins. Feature lists don’t differentiate. Perspective does. Underneath this, the economics have shifted too. AI and automation are reshaping cost structures. Subscription models are under scrutiny. CFOs are pushing harder on ROI, payback periods and measurable value. Value is concentrating around risk reduction, commercial clarity and demonstrable outcomes. Which raises the real question: In this new environment, how will complex B2B deals actually get done? My belief: 🔹 You won’t win by being bigger — you’ll win by being clearer. 🔹 You won’t win with the cheapest price — you’ll win with the most transparent and least ambiguous price. 🔹 You won’t win because you “have AI” — you’ll win because your people can translate it into real operational impact. One truth thousands of Win/Loss debriefs has taught me: Nobody wants to be sold to, but... Everyone wants to be helped, educated, guided and protected from risk. The safest vendors are the ones who understand their buyer’s commercial and personal exposure better than anyone else. The ones who choose a few lanes, define the problem precisely and prove they’ve solved it before. If I were leading a SaaS or B2B technology company in this market, I’d focus on five non-negotiables: 1. Become easier to buy from. Remove friction — unclear packaging, slow follow-up, vague implementation paths. 2. Upgrade discovery. Understand the political landscape, budget dynamics and internal objections — not just product requirements. 3. Lead with risk reduction, not feature expansion. Enterprise buyers fear making a bad decision more than paying a higher price. 4. Move from Software as a Service to Software With A Service. Onboarding, change mgt, hand-holding until the value begins to flow. 5. Treat every pursuit as a chance to improve. Stop marking your own homework. Find out exactly why you win and why you lose. B2B buying has changed forever. Tolerance for generic pitches and bloated product slides is exhausted. Buyers are demanding clarity, safety and timely commercial outcomes. I’m fascinated to see which vendors truly adapt to this brave new world and which keep selling like it’s 2015?