Why a lack of systems is sabotaging your B2B SaaS growth

The most common misconception about growth is that somehow top-of-the-funnel sales/marketing is the greatest lever to achieve it. 

We want ARR growth. So we need to invest in getting leads and customers.

Truth is: this is an expensive way to learn that you can't scale on a shaky foundation. For sustainable growth, you need two things: Net dollar retention and systems throughout your entire funnel that create predictable outcomes before and after acquisition.

There is this quote from James Clear, author of atomic habits that applies well here: "Goals are for people who care about winning once. Systems are for people who care about winning repeatedly."

Here are some key questions I urge founders to think about before investing significantly in growth:

1) Is our retention actually good?

Are we able to keep customers reliably and do we have systematic processes in place for this? You'll be able to measure this usually through some leading indicator of revenue, so in B2B specifically NDR or GDR, which should be ideally >100%. If it's not stable or improving steadily, the answer is no and it's something to look at.

2) Are we able to expand existing customers reliably?

Do their needs change over time and are we able to satisfy those needs as they develop? Do we have systematic processes in place for this?

Most often, both retention and expansion are topics given to customer success, yet how many startups apply the same dedication and scientific growth method they used to create a winning product (with rapid iteration and strong monitoring of KPIs) to keep and expand customers reliably?

Going off-the-cuff or simply "hiring CS and letting them figure it out" comes at great opportunity cost. 

3) Are we able to close deals predictably?

You'll usually measure this in your pipeline where you see stable conversion rates between stages with a high enough % win rate to justify expansion. In many startups, the pipeline is too unstable to tell whether conversion rates are reliable, so in this case you DO need to invest to make sure you can get enough learnings. But don't bet the house without knowing they can be closed predictably. 

4) Are people organically recommending our product to others?

In my experience, even in B2B: you want to get to a point where the product is so good, people love it and tell others about it. You'll measure this by your growth rate (if it's declining, flat or growing each month. Your NPS is a good alternative).

Basically, it's very hard to fight this uphill battle of a meagre linear growth, created by strong marketing/sales campaigns simply because this fundamental work hasn't been nailed. You'll have enough growth to keep you going, but not enough to ever really feel like you spend less energy to acquire each new customer. You need to look at these metrics honestly and force yourself out of denial, because the alternative is not only hard to endure for a long period, but is also expensive.

5) Do we have our content fundamentals in place?

Do we know our customers, their pain points, how to address and to communicate our solutions? Basically, we don't want a leaky bucket, before they have even entered the product. Further, you also want to know how they buy, what they expect in terms of docs, processes and content. One thing we usually recommend when setting up these processes is: "don't make customers think". What would you want if you were the buyer and just deliver that up front before them asking for it.

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It's not that you can't work on top-of-the-funnel acquisition, while you figure these things out. But it's usually a lot better to tackle these things up front, or as quickly as possible, rather than focusing solely on top-line growth. So if you're serious about driving ARR/MRR, it's generally a lot wiser to build the base of the factory before trying to rush output.

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SkaleUp is a boutique agency that works with fast-growing B2B SaaS startups to manage and implement growth. Subscribe to get our most recent posts in your inbox.