Maybe you had a stellar first quarter, maybe it was terrible, or maybe it was somewhere in between.
But we’ve got almost three full quarters to go and 2023 is still full of potential. GTM and revenue leaders are under pressure to deliver results, no matter how crazy and unpredictable the economy is.
Our research shows that 96% of Fortune 500 companies are worried about market volatility, and overall concern about volatility is up 163%. (source: GTM Partners Economic Impact Report, p. 14)
We’re going to be releasing lots of research on ROI soon and you can get a sneak peek at the 5 types of ROI in this session from our Leadership Session (ROI discussion starts at about 36:40). But today, let’s talk about how to know if you have an ROI problem.
According to our research, 60% of technology companies think they have an ROI problem.
Our research shows that credible, validated, third-party ROI studies can address all these problems.
We do ROI studies here at GTM Partners using validated G2 data, but you can also get an ROI study from other analysts (Forrester calls their version Total Economic Impact (TEI)).
We don’t care who you get it from, but it should definitely be a short-term priority.
An ROI study is the number one thing you can do to:
Shorten sales cycles
Close bigger deals
Get the CFO on board
Improve renewals
Increase expansion deals
Tip: ROI is not just for pre-sales. Use ROI data throughout the customer journey to prime the pump for renewals and upsells.
Growth Lever #2: Sell to your TRM, not your TAM
We talk about TAM when we pitch investors. We come up with the biggest potential market we can. But too often, we then drink our own Kool-Aid and imagine we can sell to the whole TAM we pitched in an investor deck.
Narrowing in on the Total RELEVANT Market (TRM) is crucial for accelerating growth and will produce more return on our efforts.
The RevOps function, if you have one, should play a key role in identifying TRM and ICP, building cohorts, choosing target accounts, developing model scoring, and getting all the data that will make this an accurate and worthwhile exercise.
Here are 4 steps to defining your TRM. For more information, watch the Leadership Summit replay (the part about TRM starts at 46:25)
Starting with the right customers matters!
While companies can grow with, or without having ideal customers identified, the sustainability of growth will decrease as you scale your business.
By identifying and focusing on your TRM you will be able to:
Retain more customers
Acquire business through expansion, which typically has a cost of acquisition (CAC) that is 50% of new business
Create focus for your Go-to-Market organization and avoid inefficient use of resources
Source: GTM Partners Total Relevant Market Report, p. 10
Growth Lever #3: Customer Expansion
Customer expansion is the heart of Net Revenue Retention (NRR). Customer acquisition costs are increasing, budgets are shrinking and it’s a GTM truism that it's easier to sell to customers than new prospects.
Our research shows that the market is responding, and that mid-market, enterprise, and F500 companies are all increasing a focus on customer expansion (source: GTM Partners Economic Impact Report, p. 16)
Our view goes deeper than just “spend more time on customers than prospects.” We want you to spend more time on the customers that are the best fit for expansion throughout the customer journey. How can you serve your best customers more and your less ideal customers less?
Step 1: Identify customers with an opportunity to expand and willingness to pay. Consider customer cohorts if your install base is large.
Step 2: Build a package / pricing that moves buyers and existing customers to want to do and spend more with you.
Step 3: As you go from product to platform, work to expand the number of Axes in your pricing model. This will mean more complexity but should pay dividends in expansion deals.
To dig into customer expansion as a growth lever, watch the Leadership Summit replay starting at about 48:30.
That’s a lot of information for today’s GTMonday.
We’ll be digging further into all these topics in the future.
We’re sharing useful, actionable research and insights every Monday.
Please share this newsletter with any colleagues who you think might like it. They can subscribe here.
Thanks for your support!
Love,
The GTM Partners Team
P.S. If you are struggling with ROI, TRM, expansion, or looking for other growth levers, book a strategy call with us. We’d love to help.
