Kyle Poyar, Senior Director of Market Strategy at OpenView Partners, an expansion stage venture capital firm, shares the most effective SaaS pricing and packaging strategies, why product led growth is so important, and the most important SaaS metrics.
Kyle helps OpenView Partners’ portfolio of expansion stage software-as-a-service (SaaS) startups accelerate growth through pricing and go-to-market strategy. He’s worked with over 40 SaaS companies and helped many of them achieve achieving meaningful growth and attract follow on funding.
In doing so, Kyle has learned important lessons on strategy and the most important operational metrics. I was thrilled to ask him about these topics as well as some important but commonly overlooked aspects growing SaaS companies - such as packaging, pricing, and go-to-market.
Kyle says that he’s seeing companies with a “product led growth strategy” achieving breakout results. This strategy entails offering a free or low cost version of the product that makes it easy for customers to get started, and then converting them onto a larger subscription. Dropbox, LinkedIn, and Hubspot have executed this strategy masterfully.
The sales and marketing metrics that Kyle monitors most closely are:
Revenue per dollar spent on sales and marketing
In terms of expanding accounts, another common SaaS metric, Kyle recommends “net dollar retention,” a metric that shows how much revenue you get from a cohort of customers one year after acquiring them. It factors in retention and churn to indicate how well a company is growing it’s accounts.
You’ll learn a lot from this episode about SaaS strategy, metrics, and go-to-market.
Here are the highlights:
Kyle’s recommendations for how SaaS companies should package their products to maximize growth (3:20)
Kyle discusses how SaaS startups should balance growth and profitability (12:27)
How Kyle develops a go-to-market strategy (17:59)
The best metrics for measuring the performance of a product led growth strategy (20:53)
Kyle shares what he believes most contributes to the success of a SaaS company (22:46)