Tag Archives: Growth

Very few businesses achieve all of their targets without the help of partners. Working with others can expand your reach, giving your business more validity in the process. But how do you pick the right organisations to work with and set yourself up for success? That’s what we’re looking at with this guide to creating a robust partner strategy to help you build success for the future. 

Look at their core values

Partnerships should be in sync with each other and make sense for everyone involved. You need to find a company that shares the same ethos as you and upholds similar standards. Finding a partner aligned with your values is arguably the single most crucial factor in picking a company to team up with and strike a long-lasting and fruitful partnership.

Don’t limit partners to just your industry

A business with the same interest and goals as yours doesn’t necessarily operate in the same industry. While the obvious choice might be to partner with a company in similar circles, collaborating with firms in other industries offers benefits. Uber and Spotify both worked together in 2014 and saw impressive results, even though they served different markets. Ultimately, you want to provide customer value. Sometimes, that can be derived by thinking outside the box and working strategically with organisations operating in different sectors but can add value to each other’s products or services. 

Set goals

There’s no point partnering with a company because you think it might work out. You will need a clear plan where both sides understand their responsibilities and vested interests are laid out on the table. The best partnerships are transparent, with everyone pulling in the same direction. First, outline what you want to achieve from a collaboration. Then, when you begin discussions with firms, draw up a blueprint that reveals a clear road map for both businesses. 

Compliment each other’s strengths

A partnership aims to introduce both companies to new audiences and improve your overall product or service. Ideally, you should partner with companies whose teams have different skill sets from your own. Fill in each other’s gaps and use strengths to cover weaknesses. For example, if you’re a big picture person, try partnering with a business where the team excels with implementation. The best partnerships complement each other and contribute to growth for both companies. 

Focus on marketing

Once the fundamentals of your partnership are in place, it’s time to tell the world about it. This is where marketing comes in, and you can tap into each other’s departments to reach the relevant audiences and get people excited about the partnership. Your joint-value proposition should strike a chord with customers, and you should focus on a robust marketing strategy to educate people about what your collaboration means for customers. 

Regular reviews

Once the partnership is underway, you should schedule a time to review KPIs. Whether it’s weekly or quarterly meet-ups, regular communication is vital to ensure that both parties get the most out of the collaboration. It’s an ongoing process and should offer the opportunity to be flexible and adapt where needed. With regular meetings you can ensure that everything is moving in the right direction and both companies achieve the maximum benefits from the partnerships. 

A partnership for success

Partnering with other businesses can benefit your company and help drive sales while building the brand. And with a watertight strategy in place, you can ensure that your business collaborates with the right companies and sets itself up for success. 

A pricing strategy is arguably the most important factor you need to consider when for your business. Go too high, and people will be put off from buying your product or service. Go too low, and potential customers will question the quality. So how do you find the right pricing strategy? That’s the purpose of this guide, which looks at the different types of pricing strategies for your business.

 

  • Price skimming
  • Market penetration pricing
  • Premium pricing
  • Economy pricing
  • Value-based pricing
  • Dynamic pricing
  • Bundle pricing

 

Different pricing strategies

Price skimming

Price skimming is popular with many startups. It involves charging the highest initial price a customer is willing to pay and then lowering the amount over time. Once the demand for the first customer is satisfied and competition enters the market, the company lowers the price to attract more price-sensitive customers. Price skimming can be particularly successful when there isn’t much competition for a product or service.  

Market penetration pricing

Market penetration pricing is almost the opposite of price skimming. It sees a company delivering a lower price during its initial offering, with the aim of attracting customers to its new product or service. The lower price is designed to help the new product penetrate the market and attract customers away from competitors. Market penetration pricing only usually works in the interim, aiming to raise awareness with a large number of customers. 

Premium pricing

If a business creates a high-quality product or service aimed at high-income individuals, it might try premium pricing. This pricing strategy involves developing a product that people deem as high value. Therefore, the target market is anyone operating in the luxury or high-end lifestyle markets. 

Economy pricing

With economy pricing, the aim involves targeting customers who want to save money when purchasing goods or services. Stores like Asda use economy pricing models to appeal to a range of customers looking for discounts and price-saving deals. Unlike premium pricing, economy tends to be for more functional products and services aimed at a specific target market. 

Bundle pricing

Bundle pricing can work if you’re selling multiple products. You take them and bundle everything together, selling at a lower price than if items were charged individually. Discounts can create a sense of demand, allowing companies to sell products and services they previously struggled to shift. When done right, the result is a greater volume in sales. 

Dynamic pricing

Flexibility can be key for many businesses, and dynamic pricing is often used to establish flexible market prices for products and services. It considers variables, such as the balance between supply and demand, as well as seasonality and competitive strategy. As a result, companies can adapt to the market, be more agile and offer a more competitive service to customers. 

Choosing the right pricing strategy

With so many pricing strategy options, businesses have to decide the best way to market their products and services. By taking a good look at your offering and comparing it to other competitors, you can settle on a pricing strategy designed to help your company progress and find the sweet spot for the cost of your products and services. 

Growth or profit? For B2B tech startups, it’s the million-dollar question. 

Both of these outcomes are highly valuable for businesses. And most founders strive to position their businesses for both maximum growth and sustained profitability. Unfortunately, we know that it is incredibly difficult to attain both at the same time. In the end, it comes down to understanding the difference between the two and making an educated decision on when to shift your attention and resources to each one. 

So, what is the optimal ratio between the two?

Exploring the rules of growth and profitability 

Completing some online research will highlight that there are numerous rules of thumb out there for assessing whether your B2B tech startup has the right growth-profit balance. The now famous “Rule of 40” suggests that a successful SaaS startup’s growth rate plus profit should add up to 40%. Which means if you’re growing at 60% per quarter, you can afford to lose 20%. 

The basic idea is that early stage startups should aim for high growth, prioritising unit or cohort profitability, not overall company profitability as the company invests in product and service development and scalability.

Growth 

There’s organic growth and growth by acquisition or partnership. Usually for a B2B tech startup, organic growth will be the priority. That can include increasing the workforce, increasing the customer base and increasing the volume of sales. 

However, with this comes increased risks with additional obligations, and with fast growth and rapid expansion, businesses can run into problems with maintaining quality.

Research shows that 93% of B2B tech companies fail to reach Series A funding.

If you want to run a successful startup that will last, you have to learn how to measure startup growth. 

In light of recent economic and market conditions, most notably the implosion of WeWork, growth isn’t enough to attract investors anymore. 

Profitability 

Profits are important to every business, and it’s no surprise that most entrepreneurs seek to become profitable quickly. Unfortunately, only two in five startups are profitable, and other startups will either break even (1 in 3) or continue to lose money.

Sometimes, achieving true profitability comes at the expense of growth. Instead of reinvesting profits into sales, marketing and employees, founders use profits to build the bottom line and net cash. 

For a new startup, one of the greatest advantages to focusing on profitability is the ability to maintain financial stability without relying on outside investment. 

Finding the right strategy to balance growth and profitability 

Startup founders need to strike a balance between growth and profitability in order to secure investment and sustainably grow their business. 

Some of the key ways to strike the right balance include: 

Cash flow – as a general rule of thumb, it is recommended that you should have enough cash saved up to cover a minimum of 6 months’ worth of expenses.

Cash conversion cycle – analyse the time (days) it takes from e-signature to invoice sent and to the invoice being paid, decreasing this time will bring new much needed cash into your business and fuel your growth.

Establish targets – set a minimum profit level and allow for growth-focused investments with any profits that exceed that target.

Market fit – it’s important to generate revenue during the early stages, in order to verify that customers will pay for your product.

Cost-to-serve equation – this analysis will pinpoint exactly how profitable a particular customer will be and which ones may actually generate losses for the business. Then you can establish the value of that customer and weigh that against the risks. 

Customer referrals – asking your existing customer base for recommendations, means new customers can be secured with minimal investment, even if referral fees are due, it’s when you receive the revenue. A strategy like this will help to grow the business and generate profits simultaneously. 

All sized companies need to be agile and learn when to shift their focus between growth and profitability at different stages of the life cycle. At Sales for Startups we work with Pre-Seed to Series A startups to create comprehensive agile strategies to support overall goals. 

To find out more download our Winning Sales Strategy or book a consultation call with our CEO & Founder James Ker-Reid. 

 

There’s a lot to consider when founding a B2B SaaS tech business.

First and foremost will be product development; to ensure a unique SaaS product can create an impact in a competitive B2B market.

With a strong value proposition in place, it’s time to optimise sales and marketing operations, and take into consideration the core components of strategy, infrastructure, team and clients/community.

Strategy

As a conceptual activity, strategic planning is not always given the time and attention it deserves. A gung ho attitude will only serve a startup so well without a plan backed by real research rather than internal theory.

Having a strategic plan to align sales and marketing activity gives direction to activity in the early stages, and continues to provide focus as a startup grows.

A strategy will take into consideration brand messaging, competitors and positioning, customer pipeline, and of course in depth research of prospects, to name a few components.

Infrastructure

A solid strategy is nothing without the infrastructure to execute it. SaaS startups can practice what they preach and benefit from a multitude of SaaS providers to support day-to-day operations.

A sales tech stack can make or break a business. Consolidate services where possible, or integrate. There are many ways to do this and an API call can be all a startup needs to significantly reduce administrative burdens on sales and marketing teams. Saving a small amount of time each day can accrue into days and weeks of saved time throughout the year.

A quality CRM is invaluable, especially to support startup growth as several teams work across accounts. A CRM that can integrate with other software services ensures better control over data and an efficient sales cycle.

There exists a lot of power in automation. Utilising automation services wisely allows startups to engage more prospects and accelerate pipelines. Easing pressures on the workforce can also reduce the risk of employee burnout as engagement demands increase with growth. Different automation options will suit different businesses, and workflows should be built around unique customers for the best results. While there are many benefits to automation, businesses need to be careful however, that they do not not become robotic in their engagement.

Team

While infrastructure and automation is valuable, nothing can replace the value of real team members.

Recruitment should not be carried out in haste, and the value of diversity should be recognised. Once talent is on board, due time should be made available for teams to come together, including across departments to share insights and align activity. This extends beyond uniting sales and marketing teams to product development and finance etc, building relationships and understanding across all departments.

With a talented team in place and working cohesively, it can be tempting to try to motivate staff with targets and commissions, and while there can be a place for this, businesses should be mindful that increased sales through overpromising will lead to disillusioned customers. Short term wins do not necessarily lead to long term gains.

Providing training programmes for all staff, will not only enable the business but also empower the individual. A talented team member happy in their role on day one, will likely value the challenge and opportunity to evolve their role as the company grows.

Clients and Community

Businesses succeed when they enable their customers to be their marketers, generating new leads from word of mouth and referrals. In addition to offering referral rewards, businesses can enable customers to promote them by creating content that they can share, and celebrating their successes, for example through case studies.

For a SaaS B2B startup, the value proposition will shift in time to keep pace with new technologies. This offers a great opportunity to build trusted relationships with clients and provide feedback channels through access to beta versions.

There is a wide community out there for startups, and leads can be generated from leveraging network connections, this includes peers, suppliers and clients. Build relationships and support each other.

How can you optimise sales and marketing to close more deals?

Optimising your sales and marketing operations is not a quick one-time fix.

Successful startups constantly evaluate and refine their processes to adapt to changing times and achieve sustainable growth.

At Sales for Startups we can help you gain clarity in your strategy, gain confidence in your execution and get traction through your sales operations.