Bringing together clients, colleagues, and partners, our goal was to provide a great opportunity to grow networks, learn from peers, and connect in-person. Our focus for this event in particular was the demise of the outdated ‘Growth at all Costs’ approach and the emerging need for ‘Efficient Growth’ as the only path forward for sustainable business growth. Knowing this is a hot topic amongst the SaaS businesses we work with, we were eager to bring people together to share in their experiences.
The Failure of ‘Growth at all Costs’
In recent years, the business landscape has witnessed a growing recognition of the limitations and pitfalls of the ‘Growth at all Costs’ mindset. This approach, once hailed as a path to success, often results in unsustainable growth fueled by excessive spending, a lack of focus on profitability, and a disregard for long-term viability. Together, we shared our experiences and insights on why this approach is no longer valid, which have played out in actuality since January 2022 with extremely high levels of layoffs, the slowing down of deals, and cuts to budgets.
Key Stats
Deal volumes down 12% QoQ, Q1’23 vs Q4’22
Huge volume of layoffs, with 563k people let go since Jan 2022
Fundraising round are taking an additional 5 – 9 months
Embracing ‘Efficient Growth’ and Healthy Unit Economics
The concept of ‘Efficient Growth’ emerged as the alternative strategy for achieving sustainable business growth. This approach emphasises the importance of healthy unit economics, focusing on optimising the balance between revenue generation, profitability, lifetime value, and resource utilisation. Businesses must prioritise generating sustainable profits while maintaining an unwavering commitment to delivering value to customers and the role that marketing teams need to play.
The Changing Role of Marketing Teams
In light of this shift towards ‘Efficient Growth,’ marketing teams find themselves in a pivotal position to prove their contribution to revenue generation and demonstrate their value within organisations. Upstream metrics such as MQLs are no longer enough. To secure their budgets and resources, marketing professionals must now prove to their CFOs that their activities directly contribute to the business’s revenue. This is achieved by adopting data-driven decision-making, focusing mostly on revenue-generating marketing initiatives, and being measured on metrics such as LTV, CAC, and LTV:CAC.
The Proof Is In The Data
To align marketing efforts with revenue generation, it is imperative to be able to access, read, and understand the science behind the data. By leveraging this information, marketing teams can translate data into performance insights, allowing them to identify which initiatives drive revenue and which may require adjustment or reallocation of resources.
Above all, this data empowers marketers to identify their high-value customer verticals – measured by LTV:CAC and summarised as those that come with the highest average contract values and longest lifetime. Focusing on these verticals will play a significant role in how big of a contribution marketing can make to overall revenue.
Bloomreach, a B2B SaaS company delivering customer experience and engagement software, shifted their whole go-to-market strategy to verticals where they win the most and enjoy the longest lifetimes – fashion, retail and D2C. This helped them cut spending from non-critical areas and focus that investment in areas where efforts contributed most to revenue. This helped them cut cost per Opp by -65% and grow Pipe by +115% between Q422 to Q123.
We hope our event provided an invaluable platform for clients, colleagues, and partners to explore the paradigm shift from ‘Growth at all Costs’ to ‘Efficient Growth’ as the foundation for sustainable business growth.
“The conversations were very insightful, and it was a great format as well, no death by PP!”
If you were unaware of the event, or unable to attend, don’t panic. Our next event will be in November. If you’re interested in joining us, let us know at hello@ziggy.agency
We look forward to seeing you there!
Journal
