Three Blockers To SaaS Startup Revenue Generation

While there’s no one-size-fits-all approach to maximising revenue generation within a B2B SaaS startup, our experience tells us that there are familiar blockers to growth.

When we work with B2B tech companies, we begin with an analysis of proposition, people, and process and have found three standard practices that block SaaS revenue generation. In research, we’ve analysed 453 Pre-Seed to Series A Startups to understand the key blockers to revenue generation.

Read on for more information and insights on how to avoid the traps.

Three familiar practices that block revenue generation

Revenue block 1 – Founder overload

As talented as they are, founders can only spin many plates before inevitable breakages.

We’ve found time and time again that founders are diluting their valuable time in order to manage all aspects of operations. While commendable to have an input in the breadth of business, founders and the core leadership team must be able to concentrate on what they do best and learn to delegate duties in order to achieve success.

Unfortunately, as a founder, the temptation to micromanage can be a slippery slope. At the early growth stage, founders find it difficult to justify resourcing support and can unknowingly create a barrier to growth. Ironically, in waiting for the business to grow to validate seeking further support, founders face the danger of blocking that growth or setting an unsustainable precedent.

Creating an ideal customer experience means developing expertise at every stage in the customer journey, and typically, a SaaS founder does not have a background in sales, marketing and sometimes customer success. For a SaaS startup to be successful, a diluted “do it yourself” approach is a barrier to substantial revenue growth.

Revenue block 2 – Inappropriate hires

On the other side, B2B tech startups keen to grow can easily make the mistake of hiring too early. Without a well-defined sales strategy in place, hiring a SDR or a BDM without having the proper setup and onboarding is simply setting them up to fail.

Conversely, in Pre-Seed, Seed and Series A companies, there is a danger in recruiting your VP too early in your startup journey. Hiring a VP of sales before you’ve got your proposition, people and processes in place is a common and all too costly mistake. You often ask them to split their roles between sales, recruiting, coaching and go to market strategy, it’s no wonder that this is a big ask for an early-stage startup. Ultimately, their future is heavily dependent on sales success, i.e., being a business development professional.

Revenue block 3 – Investing in lead generation at the expense of sales

“We want more leads.” Sound familiar?

Increasing leads isn’t the only answer when startups struggle for sales and revenue.

Nurturing leads down a B2B SaaS sales funnel can be quite a task, and when the time comes to close a deal, closing it as a loss can be demotivating, to say the least, and the further the prospect is down the pipeline, the harder it hits.

If awareness and acquisition activities don’t convert to a positive decision and an investment, then spending on lead generation is worthless. It’s like having a leaky bucket with multiple holes in it; the more you pour in, it doesn’t mean that your pipeline will overflow with qualified leads.

It’s the path of least resistance. It’s not us, it’s them. “If only we could get more of the market to know who we are then they’ll buy our product.” Unfortunately, real-life practice demonstrates that this is untrue.

It takes courage to realise that there are a lot of optimisations to be completed before you invest in the unknown, and often hard to quantify lead generation activities.

Before investing in any lead generation activity, founders need confidence that:

  • They have established criteria to distinguish a “quality” lead that is understood across the organisation
  • They have a consistent and well-understood sales process that converts leads into sales.
  • They have a smart onboarding, customer success and renewal process that is best in class.
  • They are consistently gaining referrals from their existing customers.

Sales, Marketing and Customer Success are aligned to offer a consistent customer experience with consistent and regular feedback loops.

They have enough qualified sales personnel to continue to provide the same quality experience to prospects across the sales pipeline if and when the number of leads increases.

Avoid the perils with a startup strategy

Strategy is crucial to nurture early growth and outline a well-considered path to progress.

Founders need someone with high expertise without the commitment of a full-time salary with little guarantees for success.

The Recruitment & Employment Confederation has estimated that the costs of a bad hire can sometimes cost more than triple the cost of the initial position’s salary. According to C&IT £126,347 is spent annually by each SME in the UK on failed hires. For a startup, this is a make or break amount, especially in its first few rounds of funding. This doesn’t include the time spent on onboarding, training and ultimately, the opportunity cost.

Sales for Startups is an award-winning consultancy that has assisted over 70 Pre-Seed to Series A B2B tech startups to rapidly scale their revenue operations for a fraction of the mis-hire cost.

Following a proven process, we can help you deliver your sales strategy by:

  • Deploying one of our rigorously vetted CROs (Chief Revenue Officers) with startup experience at Pre-Seed to Series A
  • Delivering the Sales Strategy & 90 Day Plan within 2 weeks of the final workshop
  • Enlist us to help implement the Sales Strategy & 90 Day Plan to bring you real business value.

Book a consultation with us today to find out more about unblocking your SaaS startup revenue generation efforts.

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