This article comes from Brian Clark and Brad van Leeuwen’s insightful talk, ‘Saas buying trends in the year of efficient growth’, at our New York 2024 Chief Revenue Officer Summit.
With board members and investors pushing for profitability and improved unit economics, there's constant pressure to move upmarket and target higher-paying enterprise customers.
But what if the conventional wisdom is flawed? What if the data tells a different story – one that challenges long-held assumptions and unveils new paths to efficient growth?
Recently, I had the privilege of engaging in a thought-provoking discussion with Brad van Leeuwen, the co-founder and COO of Cledera, sharing our insights on the SaaS buying trends that will reshape your go-to-market strategies.
Backed by a wealth of data, our discussion shed light on some surprising trends that defy traditional thinking.
From the resurgence of SMB buyers to the untapped potential of international expansion, we explored a range of topics that could redefine your approach to customer acquisition, retention, and growth.
So in this article, I'll share the key revelations, offering a fresh perspective on the SaaS landscape. Get ready to challenge your assumptions and gain a deeper understanding of what truly drives efficient growth in today's climate.
So, let’s dive in…
SMB surges by 51%
One of the most exciting insights we uncovered was the recent resurgence of SMB and mid-market buyers. Brad shared data from Cledera's SaaS Buyers Index, a metric that tracks whether buyers are increasing, decreasing, or maintaining their software spend. The data revealed that:
As Brad explained,
"What you'll see over time is that when markets are tough, it hits the SMB and mid-market buyers first, right? They react more and they cut their spend."
However, the trend reversed soon after, with SMB and mid-market buyers outpacing enterprise buyers in software budget growth, challenging the conventional pivoting away from SMBs during economic downturns.
As Brad put it,
"If you've stuck it out, if you've been pushed by your board to go upmarket based on what they're seeing in other companies that they're on the board of, and you've stuck it out with SMB and mid-market, maybe you're starting to find things getting a little easier."
Moreover, Chargebee's own data corroborated this observation, with our SMB cohort growing 51% faster in 2023 compared to 2022.
This revelation has significant implications for SaaS companies' go-to-market strategies. Instead of abandoning the SMB segment, it might be wise to double down on it, especially considering the potential for a product-led growth approach.
As I mentioned to Brad,
"If you're thinking about pivoting away from the SMB, this is an interesting data point to say maybe that's not the right decision. If you're thinking about moving to SMB and you want to do it in a cost-effective way, I think PLG is probably a good answer."
