4 Ways To Grow ARR Other Than Increasing Spend

The end of the year is approaching, and B2B SaaS marketers are in annual planning mode. This year’s conversation with your CFO and the board is very different from past conversations. This year you won’t be able to ask for a massive increase in marketing budget without one of two things:

• Having a track record of past success with the current budget

• Having a clear roadmap that shows how the budget will be used, clear ROI, and timeline to achievement

Even then, your budget request may get scrutiny…which is actually a great thing. It’s now forcing you to explore your other growth levers amongst your department and your fellow GTM leaders.

I’ve observed in numerous B2B SaaS companies, where historically it took [x] amount of leads and ad spend to hit a specific ARR target. Then, next year a new ARR target was set, and the first lever the marketing leaders wanted to pull was increase ad spend to match the new ARR target with the hopes of doubling the leads.

It’s not that linear and simple when driving towards a larger revenue target, and cash is more expensive than it has been in over a decade.

So then if increasing ad spend isn’t the only way to grow ARR, what other levers do you as the Head of Marketing have as options to pull (along with your GTM leaders)?

We’ll there’s 4 of them. Let’s dive deeper into each one:

1. Increase Demo to Opportunity Rate

Which in simple terms means create more at bats or revenue opportunities for your sales team to attempt at closing. This is a conversion metric that looks at the quality of pipeline being created by marketing. If you bring in 100 leads that attend a demo with sales in a month, and only 5 turn into opportunities, then you have a top of funnel issue which can be:

• You’re targeting the wrong ICP/audience

• Your marketing message is different from what sales is selling

• Sale is dropping the ball on demo’s

Two ways to address these issues in improving demo to opportunity rate:

1. Speak with sales and align messaging with what’s being sold on demo calls

2. Speak with CS and see which segments are most profitable and have the best experience with the product, and adjust targeting accordingly

2. Increase Win Rate

Which in simple terms means close deals better, so it takes less attempts to hit your revenue target. Win rate is less on marketing and more on sales, however you as the marketing leader plays a huge role in improving win rate by:

1. Bringing in qualified leads who fit buying criteria

2. Launching demand generation programs that create high-intent hand raisers who want to speak with sales organically

3. Increase ACV

Increase how much you’re charging on your annual contracts. The bigger the ACV, the less closed won deals it takes to hit your revenue target. This will take buy-in from the GTM team and leadership to either increase ACV across the board, or go after larger scale prospects. In the second case, you’ll have to adjust targeting and potentially partner with sales to launch an ABM program to go after top accounts.

4. Shorten Sales Cycle

Close deals faster so that you can hit certain volume benchmarks. As the head of marketing you can contribute to shortening sales cycles by understanding buying signals, launching demand gen and revenue programs that create interested prospects, and knowing when to handoff leads to sales based on buying behavior.

Disclaimer (It’s Not Just One Lever)

The answer isn’t just picking one lever and using it in a silo. THE BEST B2B MARKETING AND REVENUE LEADERS KNOW THAT IT’S A BLEND OF ALL 5 LEVERS. Trying to increase win rate from 15% to 30% is a huge jump, or doubling ACV. The idea of growing ARR is finding your perfect blend of all 5 factors (including spend).

Start with the variables that take the least amount of investment and resources (which is usually improving demo to opportunity rate), and adjust metrics until you’ve struck gold.

Trying to double any of those levers is a huge task, that many companies just don’t have the infrastructure and resources for. So instead of overextending your efforts on one lever, you look for more incremental gains on each that together get you to your ARR target.

Wrap Up

Evron is a B2B Demand Generation and Campaign Development Firm for vertical SaaS marketers. We deliver always-on, integrated B2B marketing campaigns for vertical SaaS marketers dealing with missed sales goals, disengaged audiences, and disconnected buyers.

Discover more about Evron at evron.io. Join the GTM and Demand convo on our socials: LinkedIn and YouTube. Listen to The A2B Series Podcast on Spotify, Apple, and YouTube.