SaaS Positioning Matrix: What type of SaaS business are you? And what that means for your marketing.
Updated: 7 days ago
When you’ve worked across over 60 Kiwi SaaS businesses, you can’t help but start to see themes emerge. To try and make sense of our experiences, we started to look at factors that influence how organisations think about marketing and the type of support they need. The result? A simple to use SaaS Positioning Matrix that provides valuable insights for CEOs and Marketers.
Cash versus Growth
The first factor we recognise in this SaaS Positioning Matrix as influencing behaviour is simply cash-on-hand. In this regard, we see organisations sitting on a scale from hand-to-mouth through to cash-to-burn.
The second dimension is growth, where organisations sit on a scale from no growth/slow growth through to exponential growth. And, as every good consultant knows, the best stories are told through a 2x2 matrix - with this being no exception.
In our experience, organisations operating in each of the four quadrants have quite distinct traits and need different marketing support.
SaaS Positioning Matrix Explained
1. Pressure Cookers
Pressure Cookers have high growth (or at least perceived high growth potential) and plenty of investment. They are often VC funded and are being driven hard to achieve well defined goals in tight time frames. By definition, they are demanding, exciting and a rollercoaster of emotions, successes and failures.
From a marketing perspective
Pressure Cookers need strong, experienced and very agile marketers who can cope with the pressure – and indeed thrive on it
They often build a small in-house marketing team, primarily focused on product and content
The key to marketing in a Pressure Cooker is to be ruthless with data-driven insights in order to know where to double down and when to change direction (because there’s generally no defined marketing playbook to work with)
More than any other segment in the SaaS Positioning Matrix, Pressure Cookers tend to come with unreasonable expectations. You get confronted by multiple opinions from a lot of external advisors, which can be tough to manage. Many Pressure Cooker marketers will tell you everyone in their world is a marketing specialist and they spend countless hours on reporting not operating. Reducing noise is rather important to allow them to build the playbook.
Investing in tomorrow today
The other piece of Pressure Cooker marketing is being prepared for the next phase of growth (from a systems and processes perspective). These organisations, assuming they hit the growth curve hard, will outgrow systems and processes at a rapid rate, so they need to be investing in tomorrow today. This is often stressful as it involves significant investment ahead of revenue, particularly into the marketing tech stack, but it’s critical as when the wave comes, there is no turning back.
The biggest risk Pressure Cookers run is wastage. With more money than time, Pressure Cookers have a tendency to ‘add a zero to make it go faster’ which can turn marketing into a blunt-force instrument. Remember when Xero was literally everywhere you looked? That’s brute force marketing, which is effective – but not necessarily efficient.
2. Hard Yards
Lots and lots of Kiwi SaaS businesses are doing the Hard Yards. They’ve got a growing business – or at least the indicators of growth – but they haven’t got the cash to exploit the opportunity and need significant marketing investment to make it happen.
It’s important to understand what ‘growth potential’ really means as it’s easy to convince yourself you’ve got it when the reality is different. Offshore markets are big and exciting but can often be populated with local organisations doing similar with the benefit of being ‘local’.
Risk versus reward
To break out and exploit the market, Hard Yards either need to take a risk, raise money and go for it, which is a big bold call for anyone, OR grind away bootstrapping their own growth marketing with the income they are generating and risk missing the window.
From a marketing perspective
Hard Yards aren’t a whole lot of fun
They need swiss-knife marketers who can do everything themselves, on a shoestring, and are willing to bare knuckle fight for every customer
They need to be deeply resilient and be willing to do the hard yards themselves
The downfall of Hard Yards is often the lack of focus and the scattergun approach to marketing. Their marketers end up with too many balls to juggle and feel quite lonely being a team of one. Bringing some senior marketing experience to coach and mentor them is a great way to add some horsepower whilst allowing them to grow in their role and achieve better outcomes.
3. Life Supports
Organisations on life support generally haven’t found Product-Market Fit but are behaving as if they have. They aren’t generating sufficient cash to fund any meaningful kind of marketing themselves and can’t raise money because they aren’t growing. And if they don’t start growing, they will eventually die of starvation.
From a marketing perspective
Life Supports are challenging because they need magicians, not marketers
Creating momentum with no resource is difficult, but not impossible
Getting an organisation on life support growing (assuming there is growth to be had) typically requires some tough choices about where available funds should be spent
The goal with Life Supports is to find leverage where there is none and that’s often the domain of social media and organic SEO. This approach to build momentum is relatively inexpensive but requires a lot of thoughtful and creative content to be produced internally. It also requires planning and understanding and is definitely not something you can hand-off to the office junior to execute on.
4. Easy Streets
Organisations on Easy Street are fascinating. Easy Streets typically have a stable and sustainable financial position (profitable or at the very least Cash-Flow Break-Even) and are growing fast enough to keep everyone happy, but aren’t on a non-linear growth trajectory.
Their challenge is they have limited incentive to change what they’re doing because what they’re doing isn’t broken (think ‘Boat, Bach and BMW’). They’re oddly trapped and unless they are led by a truly dynamic leader who is willing to risk the status quo for a payday later, they are motivated to simply ‘farm’ what they’ve got.
Service versus SaaS
Interestingly, a lot of SaaS businesses end up on Easy Street thanks to services income from a small number of large enterprise clients. In fact, if you look closely, a whole lot of Kiwi SaaS businesses are actually services businesses masquerading as SaaS businesses. These businesses also have long tenure teams who find it hard to innovate or think of new ways of doing things.
Of course, the challenge in SaaS is, unless you are reinventing yourself, you’ll eventually start going backward and those businesses who are sitting on Easy Street today could very easily find themselves on life support tomorrow. For most SaaS businesses, there’s a relatively narrow window of opportunity and timing is key.
From a marketing perspective
The challenge on Easy Street is convincing owners and leaders to push, grow and change because the incentive to do so often isn’t there
Getting Easy Streets into aggressive growth mode requires strong leadership (both at the CEO and marketing level) and significant investment in marketing
Bringing new people with proven experiences and new perspectives is key to driving change and getting the marketing team firing up
Often, in looking at entering into a new market, they require a grown-up marketing team with a diverse set of experience. The opportunity here lies in conducting a full 360 audit of the marketing capability, looking hard and deep into data, systems and processes, as well as interviewing customers to identify areas of improvement and come up with an ingenious plan. It’s a big, bold, high-risk call.
So, what type of SaaS business are you? Have you got the right marketing support on hand to get to where you want to go?
We recently publish the 2021 edition of our Serious About SaaS Marketing Capability Report. Assessing your marketing capability at a high level is a good way to identify the levers you can pull to power up this function. If you need help in this department, feel free to contact us for an informal chat about how our team of virtual Chief Marketing Officers can support your growth ambitions.