Growth Science for B2B SaaS Companies from Mosaic Growth Solutions – Détails, épisodes et analyse

• Is Your Pricing Strategy Holding Back Growth? 

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• Let’s address a hidden growth lever in B2B SaaS: pricing strategy.

• Across the many companies we’ve worked with, the most common pricing “strategy” is to price a bit lower than the industry leader. But here’s the reality—this shortcut approach can hurt long-term profitability, brand perception, and customer loyalty. A thoughtful pricing strategy, however, can boost all three. 

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• To highlight how little thought goes into B2B SaaS pricing, Paddle found “that companies only spend 6 hours on their pricing strategy in the entire history of their business.”

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• Here’s why “a little cheaper” isn’t a winning approach and why CEOs should rethink their pricing model:

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1. It misses the mark on prospect needs.Prospects may share similar goals, but their specific needs and priorities differ. Some value integration, others prioritize ease of use, and some want customization. When pricing doesn’t reflect these distinctions, it can turn prospects away or attract the wrong customers.

2. It erases your differentiation.If your only advantage is being slightly cheaper, you’re not giving prospects a reason to choose you. Pricing should reflect your product’s unique strengths, not just its position relative to a competitor.

3. It devalues your product.You’ve invested in building a valuable product; pricing it as “the discount option” downplays that value. Discounted pricing signals to the market that your product is second-rate, undermining your efforts to establish a premium or differentiated brand.

4. It insures prospects will choose the market leaderIf prospects see you only as “a cheaper alternative,” they will go with the leader unless savings are substantial. Real differentiation is about adding value, not shaving off dollars.

5. It ignores switching costs and perceived risk.Challenger brands face significant barriers with switching costs and perceived risk. Simply mirroring the leader’s price doesn’t address these concerns. Pricing strategies that consider these barriers can help gain customer trust and convert more effectively.

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• To build a more effective pricing strategy, involve your marketing, finance, product, and sales teams in the conversation. As part of the process, make sure to address these three areas:

1. Customer Needs: Use insights from marketing to understand what each customer segment values most and build pricing tiers or options that cater to those specific needs.

2. Differentiation: Highlight your unique strengths and position your pricing as a reflection of that value. Your pricing should tell a story about your brand and stand out against competitors.

3. Brand Integrity: Maintain consistent pricing that supports your brand image. A well-respected brand builds trust, and price integrity is essential for sustaining that reputation over time.

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• Action Step for CEOs

• If you haven’t revisited your pricing strategy in the past year, consider holding a cross-functional pricing audit with finance, marketing, product, and sales. This audit can help you identify where your pricing may be misaligned with customer value and where opportunities exist to communicate your differentiation and reinforce your brand.

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• Pricing is more than a number—it’s a strategic reflection of your brand and product value. Bring in marketing, shape your pricing around value, and avoid the trap of “a little cheaper.”  Your customers, brand, and bottom line will thank you.

The Demand Gen Death SpiralWe were recently brought in to do an assessment for a B2B SaaS company, when we looked at their data we quickly realized then were in what I call the "demand gen death spiral." Sounds ominous, doesn’t it? It should—this is a place no company wants to be, yet many end up there.When we recognize this spiral during an assessment, it’s like watching a horror movie where the characters make the choice to go down into the basement. You can see the disaster coming and wonder: why head in this direction?So, what exactly is the demand gen death spiral?The demand gen death spiral happens when companies divert resources from effective strategies to double down on ineffective demand generation tactics. This reallocation causes performance to decline even faster, while marketing teams and agencies cherry-pick positive data points to justify the increased spend. This selective view hides the bigger picture of overall performance decline.Warning Signs You’re in the Demand Gen Death Spiral:- Missing revenue targets- Decline in branded search impressions year over year- Drop in direct traffic year over year- A high percentage of paid search revenue tied to branded search terms- Rising cost per click and overreliance on PMax campaigns- Spending across multiple channels that generates high volumes of low-quality leadsUnfortunately, many B2B SaaS companies are caught in this cycle.How to Escape the Demand Gen Death Spiral:Stop, reassess, and return to marketing fundamentals. Shift your focus to understanding core performance metrics and building a strategy grounded in your brand and true value creation.

There’s a famous quote often attributed to W. Edwards Deming: “Without data, you’re just another person with an opinion.” Pretty catchy, and it’s a mindset many of us default to. But Kevin Gray nails it better: “With data, you’re just another person with an opinion. Data by themselves have no meaning.” https://www.linkedin.com/pulse/hard-hat-stats-some-common-uncommon-sense-june-23-2024-kevin-gray-gegwc/ One of the hardest jobs for a CEO is determining what opinion on the data is correct. Two recent stories showcase this challenge: Amazon’s massive losses on smart devices and Nike’s recent struggles as part of a data-driven pivot. These stories are intriguing, but I’m more interested in how the decisions behind them were made. In an article by Dana Mattioli, Amazon’s continued investment (and losses) in smart devices were driven by a metric called "downstream impact" (DSI). This internal measure aimed to track how a product influenced spending across Amazon’s ecosystem but had significant flaws, including double-counting revenue. Why bet so much on DSI? It was developed by a team that included a Nobel laureate—in a world of opinions on data, this team would have a strong argument. https://www.linkedin.com/posts/dana-mattioli-7b09779_alexa-is-in-millions-of-householdsand-amazon-activity-7221495240203866112-b8_I/ Another example is highlighted by Massimo Giunco’s recent article on Nike which breaks down three critical decisions by CEO John Donahue that have hurt Nike: - Eliminating categories from the organization (brand, product development, and sales). - Becoming a DTC-led company, moving away from wholesale. - Centralizing and digitizing marketing, making it heavily data-driven. Nike used data science to help make these decisions. The result? Nike has lost billions in market cap, its share price has hit lows not seen since 2018 and it now has a new CEO. https://www.linkedin.com/pulse/nike-epic-saga-value-destruction-massimo-giunco-llplf/ Both articles point out that data played a key role in these strategic choices. If data is the Holy Grail of decision-making, how did these decisions go so wrong? It’s clear that data alone isn’t enough. What does this mean for CEOs and marketing? Marketing teams are flooded with data yet still make poor choices—pursuing ineffective growth strategies, wasting money on unproductive marketing channels, and rolling out initiatives that damaged the customer experience. So what can CEOs do? Before making significant marketing decisions, make sure your team addresses these points: - Ensure the decision aligns with your company’s vision and principles. - Explain how it supports customer needs and enhances the experience. - Present opposing viewpoints. - Define how success will be measured using real numbers, not vanity metrics. - Set clear goals and decision criteria upfront. If these steps don’t lead to clarity, you have to trust your gut.

The playbook mentality in marketing is one of the most damaging mindsets for an organization because it can lead your company to negative outcomes all while making it seem like you are doing the right thing. It is the “road to hell is paved with good intentions”.The most popular posts on LinkedIn are some sort of playbook, tips, hacks or rule;  Increase your LinkedIn presence, here is how I closed X number of deals through cold email, the ABM playbook, tips to grow organic search through AI etc… Learning about what others have done is important, but just following a playbook will not lead to meaningful results and can be harmful. The playbook mindset is thinking that executing simple steps can replace complex ideas and hard work. It is very appealing, the promise of the playbook is that you follow these steps and you will achieve these results.  Who doesn’t want a simple guide to success? Except it doesn't work that way. The deception is that you think you are doing the right thing because you are following steps that resulted in success for someone else. - Companies follow the product-led growth playbook and ruin their inbound marketing efforts.- Companies follow a Lean Startup playbook and put out low-quality MVPs that kill their business.- Teams execute the demand gen playbook wasting hundreds of thousands of dollars to no results. These companies thought they were doing the right thing while headed in the wrong direction. There is value in all of these strategies, but the value is never in simple steps. Why does the playbook mentality exist? Because it is easier. - It is easier to read an article on customer satisfaction than to talk to our customers and prospects- It is easier to have AI generate an article for SEO than create great content. - It is easier to justify the strategy by using someone else’s results than doing the analysis yourself. - It is easier to buy branded paid search terms than taking the time to build our brand awareness. It is so important to get out of that mindset. There is no playbook to get out of the playbook mindset, but there are some steps that will help get out of the marketing playbook mentality- Set a vision and create a brand based on truly understanding your customers’ needs. - Require your team to do customer research that has them communicating with customers and prospects- Give your team goals to go out and build relationships within the industry and their area of expertise- Before running any playbook, have them speak with others who have run the playbook to hear about the successes and challenges- Do not rely just on the results of others, have your team do their own analysis on how the changes will impact the business and define the goals of the effortIt would be great if there were simple steps we could follow to success, but success requires hard work and thinking.

I often emphasize the need to find evangelists for your company. While the concept is gaining traction, it still doesn’t get nearly enough attention. This is a huge missed opportunity. Throughout my career, I’ve seen firsthand the incredible impact of evangelists. Simply put, there’s almost no other marketing activity that can deliver such immediate and significant results. In this post, I am going to share two examples of the power of evangelists. The first case is from when I led marketing for Pentagon Federal Credit Union. PenFed was the second largest federal credit union, but compared to the big banks it was a relatively small player and my marketing budget was a rounding error compared to the budgets of the big FIs. While we may not have had big budgets, we did have exceptional products with the lowest mortgage rates, highest savings account rates and the richest credit card rewards. Our cards were so good they attracted the attention of Curtis Arnold founder of cardratings.com. While there were credit card comparison sites whose primary focus was to generate affiliate revenue, cardratings.com was not one of them. Curtis’s mission was to find the best credit cards for his users. Because we had a great product and treated our members well, PenFed was a good match with Curtis’s mission. The power of evangelism was really demonstrated in earned media. Financial reporters trusted Curtis and he was often their source when they wanted to write an article on the best credit cards. PenFed was at the top of his list. This led to coverage in the NY Times, USA Today, Money Magazine, Forbes, Fortune, Kiplinger’s, the WSJ, The Today Show, and more—worth millions in exposure and thousands of new cardholders. No other marketing tactic could have matched Curtis’s impact. Can this work in B2B? Absolutely. My second example is more recent and comes from Mark Kosoglow. He recently wrote a post about trying to find a good CRM for his business. In the post he described his selection process and why he eventually chose NetHunt CRM. https://www.linkedin.com/posts/mkosoglow_when-i-resigned-as-cro-at-catalyst-i-got-activity-7212432051625492481-hSEk Two weeks later he posted an update, NetHunt shared that they had received over 200 signups from Mark’s post. https://www.linkedin.com/posts/mkosoglow_if-i-mention-a-product-in-a-post-a-couple-activity-7219728726773673984-QN_O Once again, there is almost no marketing activity NetHunt could have implemented that would have that big impact so quickly. Curtis and Mark probably do not think of themselves as evangelists, but they meet the three requirements of a great evangelist. The 3 Traits of a Great Evangelist - A person who believes in the product - A person who has authority and is trusted - A person who has an audience Great evangelists can have a significant impact on growth, has your company found yours?

In the early 1900s, there was a marketing “law” known as cumulative value. Publishers used this concept to convince advertisers that they needed to advertise frequently and consistently in their publications. The idea was that repeated exposure would maximize the impact of an advertisement on readers.William A. Shryer, outlined the reasoning behind cumulative value in his 1912 book ‘Advertising Analytics’:- A single ad placement isn't an effective test of its success.- To gauge effectiveness, an ad must run at least three times in a publication.- Consistent repetition will eventually yield profitable returns.- Sporadic ad placements won't work; persistence is key.- The longer you run your ads, the more profitable they become.But Shryer himself wasn’t convinced. He stated:“Their cumulative value theory attracted me mightily, first because it violated every principle of psychology, logic, and reason and nevertheless appeared to be the guiding principle of every seller of space I met, as well as the accepted belief of most advertisers.”Shryer set out to test this theory through empirical research, meticulously tracking the performance of hundreds of ads across different advertisers. The results were surprising: contrary to the cumulative value “law,” the first ad placement had the most significant impact, while the benefits of additional exposure were limited.As Shryer wrote:“The first insertion of a tried piece of copy in a new medium will pay better, in every way, than any subsequent insertion of the same copy in the same magazine.”Now, you might wonder why you should care about what someone you never heard of said over 100 years ago about a law that is never discussed.Here’s why: much of today’s marketing still relies on the idea of cumulative value. Companies invest in martech assuming that if one email works, wouldn't a workflow that will send 5 or 10 or 15 be better? Do a Google search and you will see many results that recommend prospects need to see an ad 7 or 9 or 15 times to act.But if cumulative value isn’t true, how much money are we wasting on ineffective marketing?Many modern studies also cast doubt on the cumulative value theory.  For instance, Shryer's book brought to mind a post from Dale W. Harrison where he referenced a study (link in comments), which found that “ad response is ENTIRELY flat after the initial exposure to a given brand's advertising.”https://lnkd.in/eNU5fm3FI don't know if there is a definitive answer, but there is enough research to at least make us question this belief and ask why it is so entrenched in marketing.

Some time ago we were brought in to work with a mid-sized B2B SaaS company and their CEO, let’s call him Jim. Jim had a big personality, and if he was in the room, you knew it. Everything he or his company did was "the best." The company had achieved some initial growth by tapping into Jim’s network, and their product was well-received by early customers. But when it came time to scale, growth stalled.They expanded their sales team and invested some money in marketing, but growth was hard. Worse yet, a new competitor was getting noticed, and Jim was frustrated. “We have a great product. Why don’t they care?” he asked.Here’s the hard truth: No one cares about your business… unless you give them a reason to.The Reality Check Many Companies Need: Most CEOs are deeply passionate about their companies and because of this, they think other people will care as well. But the truth is, most people don’t think about your company at all. They don’t care if it thrives or dies — unless you earn their care.People don’t like or dislike your company; they’re simply indifferent.Your business is just like any other, unless you deliver undeniable value or build an emotional connection.If you can’t get people to care, you will be ignored.Many companies worry about being liked or disliked, but being ignored is far worse. Research shows that for growth and retention, the biggest threat isn’t being disliked — it’s being ignored.Is your company acting like people care already or does it know that care must be earned?  When companies approach prospects as if they care, they think:- The value they offer through their product or content is enough- People will be convinced to buy with one more email, call or ad - Their product features are what they should lead with- Relationships within the industry, customers and prospects aren’t necessaryThis misperception is what caused Jim’s company to struggle to grow. - Their existing customers valued the product, but it was in the “nice to have” category, not “must-have”- The company wasn’t creating any content that provided actual value to prospects or demonstrated expertise- Their marketing materials just talked about their product features and didn’t address prospect needs (and they wouldn’t add pricing to the website)- Demand gen tactics were ineffective and they tried to force people into the funnel- They lacked focus on relationships with partners and within the industryHere’s How to Earn Their Care:- Deliver value that’s impossible to overlook.- Create emotional connections.- Build relationships.Remember, the world doesn’t care about your business — but that’s your opportunity to make them care. Go beyond the ordinary. Deliver extraordinary value. Make an impact. Don’t let them ignore you.

How did three entrepreneurs grow Shibumi to $75 million in sales with almost no advertising? They followed the challenger playbook almost to perfection.

Here’s how they did it:

- Differentiate based on customer needs and competitor weaknesses.

- Be the best in the world where you differentiate.

- Validate your product-market fit through word of mouth and emotional resonance.

- Build a distinctive brand and product.

- Capture your competitors' customers as you grow.

- Continuously improve what you do best.

- Expand by entering adjacent markets.

These steps can work for almost any challenger brand.

If you’re wondering whether your company could leverage marketing more effectively, feel free to reach out.

Article:

https://slate.com/life/2024/07/shibumi-shade-beach-cover-north-carolina.html

Ray Rike provides a terrific resource for finding benchmarks and some guidance on how to utilize benchmarks correctly. https://www.linkedin.com/posts/rayrike_b2bsaas-benchmarks-activity-7232404615386836992-HlA2/?utm_source=share&utm_medium=member_desktop My take: I have seen some people railing against the use of benchmarks, but used the right way, they can be incredibly useful in identifying issues and setting priorities. There are many different aspects of marketing so it can be extremely difficult to know what to prioritize. Benchmarks shouldn't be your sole or even primary guide, but if one of your company’s metrics is significantly different than peers, it is worth looking into. Benchmarks help you quickly identify differences. Also, check out Omar Akhtar for benchmarks. Omar has some great data and a good post on how to use benchmarks. https://www.linkedin.com/posts/omarbilalakhtar_a-prospective-client-asked-me-a-great-question-activity-7232023554324672512-X1iD?utm_source=share&utm_medium=member_desktop Linas Beliūnas posts that startup failures are through the roof but also says this actually isn’t bad https://www.linkedin.com/posts/linasbeliunas_wild-the-rate-at-which-us-startups-are-going-activity-7232344786391711744-6z-4/?utm_source=share&utm_medium=member_desktop My take: Startup founders are either getting incredibly bad advice or not following good advice. Linas says the increase in the rate of failure isn't actually a negative, but to me, all of these failures seem wasteful. Not because startups are bad, but without the right approach they will never succeed. Following a path that won't succeed is a waste of time, money and emotions. For mid-sized brands, this also makes it clear that competition is increasing. To protect your business, this means that it is time to invest in brand and make sure you are so good in a specific area that customers can't switch away from you because they need what you offer. ------------------------------------------------------------------------------------------------------------------------------------------------------------- If you want to know if your company can utilize marketing more effectively, send me a note.

“A manufacturer whose plant is estimated to be worth about two million dollars recently remarked : "If I were forced to choose between sacrificing my plant and the good-will which this company has established thru continuous advertising for the last twenty years, I should willingly say, ' Burn down the plant . I can obtain capital to rebuild it tomorrow, because our advertising has created a demand which has a bankable value and will bring new capital . '”

This is a passage from a textbook called ‘Advertising Campaigns’  written by Mac Martin in 1917.  

It is hard to imagine a mid-sized B2B SaaS CEO today reaching a similar conclusion. 

I have no idea if the manufacturer’s brand was worth more than the plant, but I do know the concept that a brand has actual value is rarely expressed by SaaS CEOs today.  Having worked with many different B2B SaaS companies I have never had a CEO assign value to their brand.  A few CEOs might say we need to improve our brand or increase brand awareness, but they wouldn’t have an answer if asked what their brand was worth.  

Yet in 1917, the manufacturer was very aware of the value of his brand.  

Why does it matter if a CEO knows that their brand has value?

It matters because if they don't see the value, it will affect investment decisions.  While a CEO will never have to choose between burning down a factory or maintaining the brand, the same decision is made writ small with every budgeting decision.  Do we add or take money from brand?  Without understanding value, it is easier not to invest in brand because the impact seems illusory.  

Two examples that highlight that a brand has real value:

1. Warren Buffet invested in Coca-Cola in 1988 because he saw its brand value as a moat

2. Research shows that large and growing brands continue to grow for a time after stopping advertising

Three takeaways:

- Your brand has value: It is important to realize that your brand is more than how your company is perceived, it has an actual value.  Imagine there were two SaaS companies in a category that were similar in almost every way, but every prospect in the category was familiar with one of the companies, but very few were familiar with the other.  Which company is worth more? 

- Think about brand Investment: When making investment decisions it is important to understand the value of brand is more than the measurable impact it has on current sales or perceptions.  An investment in brand is also an investment in future growth. 

- Brand is bigger than advertising - Investment decisions on brand are about more than just whether you should increase or decrease your advertising spend.  It is important to think about brand impact in other areas as well.

Over 100 years ago it was understood that brand had a value and that is still understood among many consumer good companies today, but it seems like the lesson has never been learned for many in B2B SaaS.