September 2018
SaaS Companies - Expansion Stage

Welcome to The Cirrostratus Group September newsletter. This month I have included benchmark information for expansion stage SaaS businesses and some guidance on how to design your products for better up-selling results. I think you'll find this very helpful in growing your SaaS business.

I'm always interested in hearing about your experiences with delivering cloud applications.

Paul Ressler
The Cirrostratus Group  

 SaaS Companies 
Executing the Expansion Stage 
Openview Partners has released the results of their recent survey  of expansion stage SaaS companies. About half of the respondents are in the $2.5M to $50M Annual Recurring Revenue (ARR) range. These are companies that are in the midst of expanding.

One of the interesting results is that two out of three companies increased their pricing including the larger companies. This resulted in a 25% or higher increase in ARR for 40% of the companies and almost all saw an increase in ARR with the price increase. And of course the ARR increase is accomplished without an increase in sales costs. If you're thinking about a price increase here is a great resource for planning out the details of that increase.

The other interesting result is that companies that use a Product Led Growth strategy have faster revenue growth, higher multiples, have higher gross margins and spend less on sales and marketing costs. Although the term product led growth is primarily being used by Openview Partners at this point it is an interesting concept.

    Get your Black Belt in Successful
I've added the posting on The Right Product Structure for Successful Up-selling  to my blog post series on successful up-selling. I think this is one of the most important areas of successful up-selling.
Seven colors of martial arts Taekwondo belts in order from low to high

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