How the Fastest Growing SaaS Companies Approach Marketing
This past June, OpenView released the results of a survey of more than 500 marketing leaders covering marketing metrics, demand gen channel strategy and its effectiveness, tech stack, organizational structure and more. The respondents ranged from seed to growth stage executives, but the vast majority were expansion stage software leaders.
This crucial stage is where many companies either hit their stride or hit a wall.
So what determines down which path a company will head? Taking a deeper look at our survey results, we uncovered key attributes shared by respondents from the fastest growing companies – among which revenue grew by more than 50% year over year.
So what exactly did we find? These companies were statistically significantly more likely to:
- Leverage attribution to track marketing spend
- Implement lead scoring based on two or more attributes
- Run continuous marketing experiments
Attribution – identifying a marketing campaign’s impact on customer acquisition – is the key to unlocking smart growth. The fastest growing companies are 30% more likely to leverage attribution models to understand the effectiveness of their spend. Any company can recklessly grow by paying for their acquisition, but doing so is simply unsustainable. Attribution, instead, lays a foundation to help you understand what you can afford to acquire new customers so you can scale in an economical way. As you scale and test new marketing channels, ROI of marketing spend only becomes more complicated. Defining your attribution structure and your goals around CAC and payback in the expansion stage are paramount to scaling your business and aligning your teams around common goals.
Lead scoring is almost always born out of necessity. At the expansion stage, as companies shift from product development to customer development, they experience a surge of leads, but have limited resources to move these leads through the funnel. The companies that are able to implement effective lead scoring deploy their resources in a way that becomes easily repeatable. Over 70% of the fastest growing companies use lead scoring based on to two or more attributes to prioritize their leads sales such as industry, employee size or role.
When first getting started, lead scoring doesn’t have to be complicated. There are some quick methodologies you can leverage based on insights from your historical data and understanding of your target customers. Over time, as your scale warrants, you can deploy more sophisticated models such as predictive lead scoring.
The majority of the fastest growing companies we surveyed have run at least 3 marketing experiments in the past 3 months. The takeaway here isn’t that 3 is the magic number (although some marketers may argue it is). The point is, the fastest growing companies adopt a ‘test and learn culture’. At the expansion stage, you’ve achieved enough scale where sample sizes become less and less of a constraint. You should be testing across not just marketing, but pricing, product and sales. Companies that continue on the high growth trajectory are willing to fail fast and let the numbers heavily weigh into their decision making.
Attribution, lead scoring and marketing experiments are just a few of the forces driving the fastest growing software companies. This is by no means an exhaustive checklist. But these three strategies demonstrate that fast-growing companies are able to accelerate scale through systematic growth. They are focused on a data-driven approach to ensure that both the marketing dollars they spend and how they leverage their resources across their leads are continually optimized.