Why Twitter ditching Salesforce might be start of something big? 🥺

"Good to have SaaS" days are over.

Feb 15, 2023

Welcome to the 125th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more

Twitter ditching Salesforce 🤯
Elon thinks - It's expensive 💸
Here's how SaaS churn will play out in 2023 ⬇️

Quick context 🗓
Fortune magazine reported that Elon Musk is re-negotiating the Salesforce pricing for Twitter. There is a chance he might just pick a cheaper alternative.

And, Zoho founder responded ✨
"We at Zoho would be very happy to serve you. We spend more on R&D than on marketing and pass on the savings to customers. I still write code - working on a compiler!" - A classic founder pitch that might just work.

For the record, Salesforce is an ecosystem in the US 🌁
Multiple billion-dollar revenue companies exist because of it. It hit $1 billion revenue in 2009 and has grown 22X in the last decade ~22B revenue.

So, why should SaaS players be paranoid? ⬇️

1/ The days of "good to have" SaaS are over 🎯
Try speaking to your SaaS sales rep friends. Most will tell you it's been difficult to sell based on benefits. People don't want benefits - they want to either cut costs or grow revenues. Those who can't or don't solve for it will have a harder future.

2/ Pricing is getting attention 💰
You can no longer sell a tool based solely on substitute pricing compared to the competition. You must answer the ROI for every dollar you charge.

3/ Features with little adoption will loose 🤔
Clients don't care about how many features you have. They care about features that solve their revenue growth or cost-cutting problems. Rank your features on how much your clients will pay for different bundles and prioritise your product/sales roadmap for those that will help you convert.

4/ Net revenue retention is getting trickier 🥺
Your place on their cost sheet shouldn't be in the top 5. The more you take their wallet share, the more scrutiny it will attract. Don't push account expansions that don't add ROI for your existing accounts - it might backfire when push comes to shove.

So, what's next for SaaS? 🎯
Short answer: market consolidation 🍯

You will see random categories on Forrester reports vanish in the next few quarters (they should never have existed in the first place). Bigger players will lose to their smaller competition with super low pricing, at least in the short term. Most companies will be brutal on their SaaS budget planning, creating a churn spiral for most good-to-haves.

High ROI products will win 💙
Think SaaS tools in your stack that are absolutely important for running your business - it's pretty clear what those 3/4/5 logos are. They won't change. Plus, it will incentivise the right SaaS building behaviour.

That's all for now ✨
SaaS need to solve for their core marketing pitch (saving cost/ growing revenues) plus it needs to really get it’s perceived value super high compared to it’s perceived price.

Are you in SaaS solving for monetisation strategy?
The GrowthX Monetisation deep dive might be the science that will help you nail the macro & micro of your pricing strategy. Go to the GrowthX rabbit hole & join top SaaS leaders solving monetisation problem statements.