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 churns to indicate how well a company is growing its 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)