This whitepaper is for historical reference only. Some content might be outdated and some links might not be available. # Key Activities To successfully bring a SaaS solution to-market, it is necessary to align commercial forecasts and budgets with effective sales motions and marketing plans. You must also have a plan to understand and measure whether customers are adopting the product and realizing its value. Even if a SaaS business can exceed new customer acquisition goals, it will struggle financially if customers do not use the solution effectively and efficiently. Such customers will not renew; this attrition is commonly referred to as churn. Without the large, up-front payments common to perpetual licensing software models, unexpected churn can often leave your company at a financial loss, unable to recoup customer acquisition costs (CAC). As a result, sales team compensation economics must be structured to incentivize customer retention. Most businesses can’t afford to pay sales representatives heavily up-front for customers that might churn, and never become profitable. Therefore, it is important to establish rigorous pre-sales methods, lead qualification standards and effective onboarding processes. The MVS phase plays an important role in refining the GTM strategy for GA, and should directly influence decisions related to packaging, selling and operating the GA solution. Prior to bringing a new offer to-market, you should apply lessons-learned in the MVS phase to revise buyer and user personas, update customer journey maps, and set product adoption targets, to complement customer acquisition and expand-selling sales motions. ![\[Diagram showing the market and sell with a customer-centric, adoption-driven approach.\]](http://docs.aws.amazon.com/whitepapers/latest/saas-journey-framework/images/market-and-sell-approach.jpg) Below is a list of steps you should follow when building a GTM strategy for new SaaS offerings: ## Update customer journey maps + **Goal:** Enhance buyer and user personas built in the Product Strategy and Roadmap Development phase; incorporate lessons learned during MVS phase to append attributes linked to buying behavior, onboarding experiences and product utilization patterns. Update customer journey maps to align team-level responsibilities with a series of predictable buyer and user experiences. + **Outcome:** Buyer and user personas include measurable attributes common to customers likely to succeed at adopting the product. Sales and marketing teams are armed with accurate expectations, qualification standards and demonstrable value propositions. You are able to measure and manage team and individual-level effectiveness, at all stages of the customer experience. + **Key Decision Point:** What lessons have we learned during the MVS phase that can help us to create a better customer experience at GA launch? ## Establish commercial and operational frameworks for new customer acquisition + **Goal:** Define year-one customer acquisition objectives, inclusive of revenue targets and annual contract value (ACV) goals. Divide these targets among your portfolio of complete offers, which are the packaged (bundled and/or tiered) features and services that you will bring to market, and segmentation model. Determine the skills, structure and processes required to efficiently acquire and stand new customers up, and align these requirements with a cost model. + **Outcome:** Budgets are approved for sales and marketing-related customer acquisition costs (CAC) and operating costs. Forecasts are established for year-one revenue (via new customer acquisition). Operational model includes a plan to onboard new customers in a timely manner, in line with acquisition forecasts. + **Key Decision Point:** What are investor expectations related to profitability and revenue in year-one? How much support does it take for a customer to onboard and realize value for the first time? ## Set customer retention and expansion objectives + **Goal:** Forecast retained revenue (net of churn) and expansion revenue (up-sell, cross-sell). Set budgets for funding customer expansion costs (CEC) and customer retention costs (CRC). These budgets are frequently used to fund Customer Success or Renewals teams, in SaaS companies. Forecast customer lifetime value (CLTV) to include plans for customer retention and growth, over time. + **Outcome:** From here, set effective ratio targets for CLTV vs. your acquisition, retention and/or expansion costs, to ensure that sales motions are executed under profitable conditions. This exercise also enables you to align sales quotas with end-of-year annual recurring revenue (ARR) targets. + **Key Decision Point:** Can we actually release enough new features, services and products in year-one to achieve up-sell/expansion targets? How long can we expect to retain a customer? ## Determine appropriate sales motions and compensation incentives + **Goal:** Determine a relevant distribution model for new customer acquisition, typically some combination of pre-sales, inside sales, field sales, and partner/channel sales resources. Build sales motions (e.g. acquire, renew, expand) that qualify opportunities with rigor and align appropriate sales processes with offer complexity. Pair complex, high-ACV SaaS offers with higher-touch, consultative processes, and pair less-complex, low-ACV solutions with a lower-touch, product-led, try-and-buy processes. Create sales compensation models that include product adoption and customer retention incentives. Establish boundaries related to discounting to ensure that deal-making variables align with your profitability requirements. + **Outcome:** Sales teams operate efficiently and meet buyer expectations without unnecessary friction. They are rewarded for acquiring customers that adopt the solution efficiently and renew. They leverage prescriptive, personalized sales tactics to align buyers with solutions, and are willing to walk away from deals that are unlikely to result in renewal. Margins are protected by sales playbooks, which include acceptable discount parameters. + **Key Decision Point:** How complex is the SaaS offering? Does it require a high-touch consultative approach? ## Establish Marketing operations + **Goal:** Plan marketing operations to span the entire customer lifecycle, covering new customer acquisition and expansion opportunities. You should leverage an account-based marketing (ABM) framework and/or in-product marketing resources to trigger low-friction, point-in-time campaigns, targeted to specific industry firmographics, buyer personas, and user patterns. + **Outcome:** Marketers can leverage a combination of people and automation to drive demand generation, marketing analytics and lead-scoring tactics through appropriate channels. They are able to progressively-profile and qualify leads as they move through the funnel. Sales representatives are able to focus on supporting highly-qualified leads. + **Key Decision Point:** How much of the sales funnel is the marketing team able to own? ## Define Customer Success (CS) charter and services + **Goal:** Establish the primary CS charter - typically adoption or renewal, less-commonly, expansion, and a handshake process between sales and CS, preceding the onboarding of new customer. CS teams should create success plans aligned with desirable customer outcomes. + **Outcome:** An effective partnership between sales and CS teams leads to faster TTV for customers, reduces friction in onboarding, expansion and renewal lifecycle stages. An effective CS function serves to increase CLTV and reduce churn. CS teams earn customer trust by delivering results against the promises made by a SaaS brand. They also ensure effective product adoption, which is a pre-requisite for both retention and expansion. + **Key Decision Point:** How will you monetize the CS function? Will CS carry a revenue quota? ## Launch and Product Communication Strategy + **Goal:** Define the scope of your product updates and its impact on your customers, including metrics that will help you measure effectiveness and ongoing improvements of your communications plan. + **Outcome:** Definition of your target internal and external audiences, beyond technical users or admins, including business leaders and other stakeholders. Development of content types that would resonate with each target audience the most, and multiple communication channels to reach out them. + **Key Decision Point:** How can you announce a launch of a new SaaS solution? Which communication strategies would resonate the most with your customers, investors, and internal teams? # Guiding Questions As you build your SaaS GTM strategy, it can be difficult to stay connected to the details when thinking big about subscription models and recurring revenue. The trade-offs linked to decisions about inbound/outbound sales models and product-led/marketing-led growth strategies are complex, and have significant impact on operating costs and efficiency. To simplify the process, this section lists a series of guiding questions that you should answer to inform your GTM strategy: ## Update customer journey maps + What assumptions made during earlier phases (Product Strategy and MVS) about buyer and user behaviors have been validated or debunked? + What are the team-level responsibilities during each stage of the customer acquisition process? For example, how does Sales interact with Customer Success to ensure effective onboarding? + What are the measurable indicators that tell you if a customer is using the product efficiently when onboarding? + What attributes are common to customers who struggled to realize value during the MVS phase (e.g. low technical acumen, thus slow to integrate and onboard)? + What product utilization patterns were common to customers who succeeded or failed during the MVS phase? + What company skill gaps do you need to address (train, outsource, hire) prior to launch? + What technology and educational material can you introduce to reduce friction for customers? ## Establish commercial and operational frameworks for new customer acquisition + What is the customer acquisition (revenue) target for your first year in-market? + What is your year-one margin expectations? + How many new customers do you need to onboard (per each tier) on an annual, quarterly, monthly basis, to meet your revenue target? + How much will it cost you to onboard these customers? What is the budget for CAC, inclusive of comprehensive sales and marketing costs? + Do you have the skills and resources to acquire new customers and stand them up, at a pace in-line with your targets? + How long will it take to recover CAC for a new customer? + How much flexibility do you have with your discount strategy? + For transformation scenarios, how and when will you deprecate the legacy solution? How will you structure revenue quotas for the legacy model as its sunsets? + For transformation scenarios - do your investors and executive leaders understand the economic ramifications of transforming to a SaaS model, the required investment, and the transition from up-front payments to recurring revenue streams? ## Set customer retention and expansion objectives + What is an acceptable annual churn (revenue)? + How much churn may come from down-sizing customers to more-appropriate offer tiers? + How much churn may come from customers declining to renew, or exiting early? + How complex are expansion and renewal negotiations? + What are your CEC and CRC budgets? + How long can you expect to retain a customer? + What is your expected CLTV? + What is your target CLTV to Total CAC (CAC / CEC / CRC) Ratio? + For transformation scenarios, are you migrating customers to SaaS from an on-premises legacy solution? If so, when? What are the economic impacts? ## Determine appropriate Sales motions and compensation incentives + Do you align dedicated sales representatives to specific offer tiers/geographies/verticals? Will this differ from your legacy operation? + How many sales representatives can you dedicate to the SaaS model, given CAC budgets? + Can you leverage a remote inside sales team to generate qualified leads and/or deliver solution demos, as part of the pre-sales process? + What information do you need to discover during the pre-sales process to properly qualify prospects likely-to-succeed, and thus reduce downstream churn? + Will the customer acquisition quota include customers migrated from legacy solutions? + Who will own renewals and expansion revenue quotas? + How complex are your negotiations? Do they require a high-touch consultative approach? Can you simplify the process? + Are your sales teams enabled, and able to articulate the unit economics and competitive value proposition which underpin your pricing and services? + What is your strategy to land a customer, and then, expand the relationship? + Can you define data-driven up-sell opportunities? + What role will channel partners play in your sales model? + Can you enable channel partners to drive the adoption of your services? + What compensation incentives can you offer our Sales representatives to reward product adoption and retention? ## Establish Marketing operations + How do you measure the quality of a new lead? How can you tell if a lead is likely to succeed in using your platform? + How will Marketing team interact with product teams, to create and execute product marketing initiatives? + What are the demand generation → lead generation → customer conversion funnel ratios you need to achieve, in order to support customer acquisition objectives for year-one? + How will marketing and sales teams divide responsibilities associated with funnel management? + What technology can you introduce to make lead qualification and lead scoring processes efficient? + Can you publish content (videos, user manuals, FAQs) to educate customers and reduce friction during the sales process? + How will you market to customers ahead of a new feature release, to support expand-selling motions? + What focus groups should you use to analyze the effectiveness and profitability of your marketing campaigns? Offer-level? Vintage/time-based? Channel-based? ## Define Customer Success (CS) charter and services + What is the primary aim for the CS team? Expansion? Product adoption? Renewal? + Who owns the customer relationship with the deciding party, during renewal? + Will CS carry a revenue quota for expansion or retention? + Can you monetize the CS team by selling it as a premium service? + What role does the CS team play in coordinating cross-functional activities with other teams? + Will CS also provide Customer Support? + Will you align CS representatives with customers based on tier, industry or vertical expertise? + How many customers can each CS representative manage effectively on an annual basis? + Where will you find CS representatives? What skills should they possess? + How many CS representatives can you fund, and (as appropriate) how much up-sell and cross-sell revenue can you drive, given your CEC and CRC budgets? ## Launch and Product Communication Strategy + What is important for your target audience? What type of information do they need or expect from you? + What is your communication goal (e.g. number of users/accounts reach, product/feature adoption, revenue, etc.)? + What’s the best way to reach out to your target audience? How can you leverage multiple channels to create an immersive experience? + How are your customers impacted? Do some of your customers need additional support to communicate the product updates and train their employees? + What should be the timing of this communication? How much time do your customers need to adopt new features/releases? + Do you have any commitments to let customers know certain changes in advance? + How can you a/b test your message? + Do you have a mechanism for your customers to provide feedback about product communications and suggest new features to be developed? + What are the most important metrics to measure reach, engagement, and adoption? How can you optimize your plan for next iteration?