We visited the SaaStock event in Dublin, Ireland in October. Here re some of the key findings from the presentations and discussions. THE key lesson? Invest in client monetization and retention more than in new client acquisition.

Thoughts and notes below by our Managing Partner Markko Vaarnas:

If I were to name two key takeaways from the SaaStock, they are the following

• According to all research evidence, investment on MONETIZATION and RETENTION of existing clients, brings a much better ROI than investment in new client ACQUISITION. Nevertheless, pretty much all companies are putting >80% of their energy and investments in ACQUISITION. There are big opportunities in doing a better job with existing clients.
• Being in a global conference focused on such specific topic as SaaS is interesting in the sense that you get to see the granularity of niche service providers. It was very interesting to meet companies who are the best experts globally in SaaS pricing, SaaS KPI reporting, and SaaS client success management just to name a few examples. We just don’t have this level of in-depth expertise in Finland.

Selected Success Factors for running SaaS businesses

To further summarize, the discussions in the event focused around six specific areas, which here could be perhaps referred to as Key Success Factors of SaaS businesses:

1. Client Acquisition, i.e. how to build an automated sales and marketing machine, which generates sales leads / free trial users for the company.
   
2. Content Marketing that generates client interest and supports client acquisition as well as monetization and retention.
   
3. Inside Sales operations which focuses on converting sales leads coming from marketing and free trials into continuous subscription clients.
   
4. Pricing which, when properly done, helps in optimally monetizing the acquired clients.
   
5. Client Success Management which focuses on retaining and expanding the acquired clients. (More than 10 years ago we called this account management, but today this field has lots of possibilities to automate interaction with the clients so I guess it deserves a new title as a discipline.)
   
6. KPI reporting with focus on measuring traction as well as customer lifetime value (CLTV) and customer acquisition cost (CAC).
   

To further comment, there was not much discussion about traditional personal saleswork whereby sales person goes out to meet enterprise clients. Perhaps everybody felt ashamed of bringing that type of old fashioned working model up, or it might be that companies have really moved into automated sales and marketing focus coupled with inside sales and client success management activities.