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Both started SMB (Monday even more so), and Both have now gone more enterprise (Monday even more) But still with the vast majority of their customers SMB. Enterprise Expansion : While maintaining strong SMB growth, Monday.com has successfully moved upmarket.
SMB Unit Economics: Why Is 6 Quarters the Right Target for SMBs at Scale? So, SMBs are asking for consolidation, and that’s why Bill has acquired companies and continues to add more financial operation capabilities. BILL wants to be at the heart of every SMB business. At BILL, logo retention is 86% in the first 90 days.
Dear SaaStr: How Should I Calculate Gross Dollar Retention For Our Investors? Gross Dollar Retention (GRR) is a critical metric for SaaS businesses, especially when presenting to investors. SMB, mid-market, enterprise). It tells them how much of your revenue base you’re retaining, excluding any upsells or expansions.
So theres a theme Ive been working on with all the SMB-focused founders I work with and have invested in: # 1. The Goal for SMB SaaS is 100%+ NRR. Easy in enterprise, hard in true SMB. # However, SMBs have a certain level of inherent churn. And then your NRR will cross 100% with SMBs. Thats often 3% a month or so.
Early on, if you can, lean toward the $1M per CSM model to ensure high-touch engagement and strong retention. If you’re in SMB or mid-market, keep in mind that CSMs can handle more accounts because the engagement tends to be lighter.
The SMB sales team was incentivized purely on logo acquisition rather than revenue. Increasing Customer Gross Revenue Retention to 90 The third major focus area for Lindsey was improving the end-to-end customer experience to better align with the newly incentives sales team and larger focus on customer retention.
HubSpot recently changed its interview process to try and help maximize tenure and employee retention at the executive level. In sales, t he more SMB you are, the more you should lean on your bench. Or a great growth marketer paired with a great sales team will punch above their weight class. It can make all the difference.
Incentivize Retention If churn is an issue, consider tying part of the commission to retention. This also helps drive Net Revenue Retention (NRR), which is critical for B2B growth. Rough quotas of $500k for SMB, $700k for mid-market, and $1m for enterprise are fairly common and good rough guidelines.
Just look at the numbers: Enterprise customers bring 95%+ best-in-class retention vs. 85% in mid-market. But the rewards – higher retention, bigger deals, and ultimately a much larger TAM – make it worth the investment. That compounds dramatically over time. Waiting too long to start their enterprise planning.
net retention and CAC payback). In simpler terms — if you had 10 customers 1 year ago that were paying you $1M in aggregate annual recurring revenue, and today they are paying you $1.1M, your net revenue retention would be 110%. I consider >120% best in class for companies selling to SMBs (like Bill.com).
This is what 12x ARR selling to SMBs++ looks like. The company is successfully evolving from its SMB roots into a serious enterprise software contender. 5 Interesting Learnings: 1. Customers with $100k+ ARR now account for 24% of total ARR (up from 20% in Q1-24), while $50k+ ARR customers represent 37% of ARR (up from 32%).
As a “prosumer” app there is overlap for SMB and freemium B2B apps. Net Dollar Transaction Profit Retention hit 104%, meaning older cohorts actually became more profitable over time. 10B: Key to that high revenue retention is being multi-product. So what’s telling is how much wallet usage and share they retain.
For SMB sales, quotas closer to 3x OTE are common, while enterprise sales can push closer to 5x. You might also shift from focusing solely on revenue to incorporating metrics like logo acquisition or customer retention. Early Growth ($1M–$10M ARR): Once you’ve hit some traction, quotas should start aligning with your sales model.
Net Dollar Retention >110% and GDR of >95%: The Power of Being a True Operating System ServiceTitans NRR consistently exceeds 110%, even with SMB-heavy customers. While ServiceTitan started as an SMB-focused platform, theyve steadily moved upmarket. 5 Interesting Learnings: 1. Thats rare. The secret? And 1,000+ of Them.
” The company grew from $15M in ARR to more than $1B with this model, consistently achieving better than 130% net dollar retention. With this model, Twilio maintained contracted revenue at less than 50% of ARR while achieving industry-leading retention metrics.
The most common challenges associated with vertical SaaS are competing for adoption against popular legacy or traditional SaaS solutions, a smaller lead pool that may soon exhaust, and managing the expectations of consumer-like SMB customers. Q: How can Vertical SaaS companies manage SMB customer expectations? What is Vertical SaaS?
Pinpoint your main struggle to see how you can improve retention. With customer acquisition costs rising and retention driving most of your customer lifetime value, ignoring churn is a fast track to stalled growth. My team consistently maintains a net retention rate above 99% by focusing on product engagement and user segmentation.
Offering seamless, trusted payment options strengthens your role in their business, which then promotes long-term retention. Nielsen Behavioral Panel of USA with 29K SMB monthly average desktop purchase transactions, from 13K consumers between April 2022-March 2023. Webinar registration 1.
Rapid SMB adoption with 200K+ customers. Startups, SMBs, and mid-market; teams wanting all-in-one marketing + sales. Best for SMB vs Enterprise: For small and midsize businesses (SMBs) , HubSpot often ends up more cost-effective and straightforward. Market share leader (21.7% Also used by smaller orgs with IT support.
Marchelle’s personal journey took her from early adopter of Mangomint, to 6 years later, VP of Sales over a 25+ person SMB sales team. ” Fast forward to today, and six years later, Marchelle has built a 25+ person SMB sales team handling both high-volume inbound and outbound that has helped Mangomint achieve its incredible growth.
Polis Pilavas , VP of Engineering at ChartMogul SaaS will shift to real-time personalization, enhancing individual user experiences by learning from every interaction, in an attempt to boost retention, increase satisfaction, and drive growth. Traditionally it’s been seen as complex and costly, suitable only for large enterprise motions.
Whether youre a startup , an SMB , or a global enterprise , the right ATS can streamline your recruitment process, save time, and help attract top talent in a competitive market. Its tailored more to SMB use cases. Scaling Limits: For an SMB-focused tool, VIVAHR works brilliantly. complex analytics or deep CRM capabilities).
So if you find that most of the drop comes from the new user retention rate , you now know the problem might come from the primary onboarding process. This step is essential, because if the churn rate has been abnormally high in the last two months, then you can use some data analysis tools like: Retention cohort analysis.
The exact playbook to move from SMB to enterpriseincluding partner enablement, segmentation, and incentive design. Why retention isn’t just a CS metricand how to build a sales team that cares about it. The revenue leader needs to have an overwhelming amount of focus on retention. Um, I mean, that’s incredible.
And why it’s so important is that you can’t just decide to be a PLG business or an SLG business or an SMB business or an enterprise business. Saw historically, the sales that were easier to close had the highest acbs had the higher expansion retention. Your go to market motion has to be driven by the product. So we just.
So there’s like I’ve developed a few philosophies about like hiring, retention and firing, and I have a kind of we can talk about all three, but I’ll start with the hiring piece. How do you think about hiring, maybe at that time, but also now at your current company? That we’ll chat more about as we go.
But Toast went a more “SMB” route focusing on smaller restaurants and chains. larger revenue base by 2025. Sometimes the bigger market wins, even with lower initial margins. When are smaller customers “better”? Olo was just acquired for $2B by Thoma Bravo after 20 years — a big success. That’s lead to a $25B market cap today. 10x larger.
Co-founders Dharmesh Shah (CTO) and Brian Halligan (Chairperson) shared at SaaStr Annual the unfiltered truth on building an SMB powerhouse, pivoting to product-led growth, and why the “M” segment is SaaS gold. The SMB market offered a sweet spot between enterprise complexity and consumer scale. Focus obsessively on churn.
Let’s look at some of the top public SaaS companies: Shopify — very SMB: 100%. Hubspot — mostly SMB: 100%. Surverymonkey — fairly SMB, but going more enterprise: 100%. Zendesk — 116%, mix of SMB and enterprise. 119% net revenue retention. Asana, 130% net revenue retention. And mostly SMBs.
So in theory, SMB SaaS is better than enterprise, at least 9 times out of 10: Deals close much faster. But beyond all the other Pros and Cons of SMB vs enterprise, there’s one looming issue with SMB SaaS: Churn. SMBs go out of business, and quickly. SMBs pay monthly, and often scrutinize every expense.
Takeaway #3: More Than Ever, Retention is Your Foundation For Growth. To make sure you keep customers and revenue in your businesses, pay attention to your NRR (Net Revenue Retention) even more than your ARR. Invest heavily in retention marketing. Key Highlights: Adopt a product-led growth mindset. Focus on your NRR > ARR.
Yamini Rangan, CEO at HubSpot, has many insights on how to serve SMB customers at scale. The Challenge of Digital Expansion for SMB. When the shift began in 2020, everyone wrote off SMBs as unprepared for the necessary changes that lie ahead. As a result, SMBs have recognized HubSpot as a place for solutions.
How To Capture This Global SMBTech Opportunity There is massive market opportunity to sell to SMB businesses. Efficient Go To Market There are a lot of ways to GTM as an SMB. Delighting your customers and their end users means sticky customers and great retention. One thing is for certain. That’s why patience is key.
However, there are practical methods you can use to acquire new customers, drive higher retention, and grow your company. . Gorgias CEO Romain Lapeyre has successfully scaled the Gorgias SMB customer base from 1,000 to 10,000 by relying on data. Lapeyre shares advice on how to use data to acquire more customers and increase ARR. .
If your SMB product requires or has a salesperson involved in closing, that’s a clear sign you also want a human being involved in making sure that customer is a success post-sale, too. Just assign a certain amount of ARR per each SMB customer success manager. Support has to handle a lot of routine SMB issues anyways.
Dorian Stone , Head of Organizations Revenue at Grammarly, is here to share lessons from his experience of scaling the company from consumer to SMB to Enterprise to help you steer your expansion efforts in the right direction. The admin, influential decision-makers, and consumer sales reps can be the same people in a Consumer or SMB setting.
Average NRR at IPO is 119% — but this excludes a bunch of SMB folks who did not disclose their NRR. Folks that are very SMB with mediocre retention often don’t disclose it. Pretty consistent with what we’ve seen on our 5 Interesting Learning series , but helpful to see it distilled to one average number.
100% Client Spend Retention across 139,000 Customers. I would have expected lower than 100% net revenue retention from Upwork, given that much of the spend can be episodic. Net net, even from SMBs, Upwork manages 100% NRR, just as Shopify and Hubspot do from SMBs. 80% SMB, 20% Enterprise. So what can we learn?
112% Net Revenue Retention. Zendesk doesn’t see the 140%+ net retention we see in the enterprise (big deal sizes) or in many B2D companies like Twilio, but it’s still above 110% for a business that is 60% Enterprise / 40% SMB. Sometimes, you just stay a steady mix of Enterprise and SMB. No excuses.
. “Higher growth is generally associated with higher retention and vice versa. The higher a company’s retention, the easier it is to grow, as the company doesn’t have to replace as much lost revenue. T he impact of retention is also cumulative as it repeats and expands on itself year after year.
Traditionally, that has meant even 100% Net Revenue Retention can be tough when 20%-30% of your customers may be out of business in a given year! Smartsheet: 123%+ NRR from all customers, so probably ~110% from SMBs : #2. Zendesk: 112% NRR overall, with 40% SMB. So probably again around 100% NRR from SMBs.: #3.
Some deceleration in net retention. But net retention, while strong, has declined from 135% to 125% over the past 5 quarters. But we’ve seen many SaaS and Cloud leaders manage to maintain consistent net retention at $1B+ ARR. But Slack’s SMBs seem to have accelerated, too, since then. Competition?
In the SMB, month to month is more common. Aim for 90%+ Logo Retention. Higher rates of customer retention are more common in the mid-market and enterprise. Target 100-140% Net Dollar Retention. The top quartile of respondents observe net dollar retention of 120%+. Annual contracts dominate in the mid-market.
self-service customers, at some point, you can potentially have the entire world as customers and mature out in SMB. One worry with SMB and freemium is how big can the market be? 100% Dollar-Based Retention for organizations. This is strong for SMBs, but at the low end of public SaaS companies overall. With 670,000+ (!)
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