Accelerate through the curve – three key strategies for growth in a downturn

Sage Intacct’s SaaS Success Series kicked of its first session with a focus on three key strategies that software companies can leverage now to achieve growth in a downturn. This panel tackled issues that are especially critical right now around managing cash flow, scenario planning, and forecasting. Access the video and register for other SaaS success sessions here.

Three key strategies emerged during the conversation:

#1 Analyze your business model from multiple perspectives;

#2 Prioritize your initiatives in light of the volatility we face today;

#3 Capitalize on selective investments now, so you can get ahead of your competitors.

To understand how these strategies translate into actions, we brought together experts in a variety of finance roles. Andre Lafayette, Sage Intacct VP of Sage Intacct Budgeting and Planning moderated the panel with:

• Zach Blaine, Expel– a controller with extensive experience in public and private business with an eye for problem-solving using the industry’s leading tech/ software.
• Ben Murray, CFO of Cartegraph and The SaaS CFO, – a CFO with over twenty years of finance experience, whose current focus is on the software industry.
• Eric Gill, Sage Intacct Budgeting and Planning– a solution consultant with twenty years of planning and budgeting industry experience.

Key Strategy #1: Analyze

“Pipeline analysis and sales analysis [help me] understand what’s happening with our customers. A lot of customer success engagement is to understand the vibe out there and what to expect, so we’re not just reactive to any churn notices from our customer base.”

Ben Murray on the types of analysis he’s doing right now

This is the time to analyze your business model from a new viewpoint with these challenging times as your backdrop. Begin by analyzing your buyer to understand how and where they buy your product. Knowing your buyer in this new normal can help you identify and uncover service expansion opportunities.

Buyer behavior and demand may change through each phase of the recovery period. So, it’s important to consistently assess and re-asses buyer behavior to identify any changes. Differences in customer behavior will provide the insights you need to make smart investments and drive product innovations in the new normal.

Key Strategy #2: Prioritize

Our panel is facing the same challenges you are when analyzing business models; how can we make finance-driven decisions about deploying resources and generate the biggest impact?

“Go through all the discretionary expense items, understand what’s there and what levers you have to pull. Start with the levers that don’t hurt the growth of your business so you’re poised for the growth that is going to come up.”

Ben Murray describing the ways he prioritizes in his SaaS business

Building on Ben’s guidance, resist the urge to cut costs solely to make positive margin before digging into your financials. Companies that operate in multiple states should attempt to identify value optimization opportunities by location, if possible, given that reopening timelines vary by state.

The common recommendation across the panel- focus on value optimization, not just cost reduction.

Key Strategy #3: Capitalize

“What we’re hearing from our peers and customers is that living in spreadsheets has made it difficult to adapt to the rapidly changing environment, while an automated system that eliminates manual work has a huge impact on nimbleness.”

Eric Gill on SaaS finance leaders looking for efficiencies

Many SaaS companies are selectively investing in their top priorities. They share common goals- to improve efficiency and automation in financial reporting and forecasting. Investing in automation can provide the agility needed to adapt more quickly. There will be many phases in the recovery, so deploy a rapid response system to support shorter reporting cycles and multiple scenario planning.

“Our marketing spend was thrown-off completely by the pandemic. We do a lot of our marketing through trade shows and events, and account-based marketing. But no one is in the office and events aren’t happening, so we redesigned our strategy to reach our prospective customers and increased our online spend.”.

Zach Blaine on marketing spend strategies in a time of uncertainty

Increasing investment in marketing during a recession is effective in building your brand and market share (Sloan Business School). The knowledge obtained from the buyer analysis we discussed earlier will help prevent blindly spending money on the pre-recession marketing mix.

While these are unprecedented times, finance leaders like yourselves have the opportunity to play a central role in your SaaS companies. Taking the right steps today can help your subscription business weather the storm and accelerate into the curve of the recovery.