Sell SMB SaaS? He Generates $20m/yr using "Impossible" Outbound, Craver CEO

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Hi, everyone. My name is Amin. I'm the CEO of Craver, a food tech startup working on SMBs. And today, what we're going to be talking about is the SMB SaaS playbook and how you can go building a high-growth SaaS engine by bridging the gap between the enterprise and SMB tactics.

Over the next 20 minutes, this is what we're going to be looking at. So one is, let's have a look at the SMB SaaS landscape. Why SMB SaaS is a goldmine of opportunity? And what are the key differences between SMB and enterprise SaaS? And which one of those differences actually matter? We're going to be then looking into bridging the gap between the two. How to adapt enterprise tactics when it comes to sales and marketing to SMB SaaS? And the importance of diversification when it comes to the sales and marketing tactics is specifically for SMBs. We're going to be talking a little bit more about that. And of course, I'm going to be sharing some of our tactics and the strategies and the

practical tactics that you can implement to accelerate your growth today. Now, why am I talking to you about this? Is because after an initial growth that we had, we've been dealing with six consecutive quarters of stagnation. We hit a wall in early in 2021, and we were not growing anymore. Those six quarters where we were really trying a lot of different tactics, figuring out what's not working.

To be able to reignite our growth. And thankfully, we were able to do that. So those strategies that helped us reignite that growth are going to be what we're going to be talking about today. And how did we go from there to turn around and really start our growth engine again? But first, I want to talk about the SMB SaaS landscape, and it's super important. It is a goldmine in, this is why I'm so bullish on SMB SaaS in general, vertical SaaS. It is a goldmine of opportunity. There's more than 30 million SMBs in the US alone. So the size of the market is very big.

And when it comes to what they need and how you can serve them. These SMBs a lot of times are competing with enterprise. Like, we are in the restaurant market. Our customers, coffee shops, local coffee shops is competing with the Starbucks of the world.

Is it better now? Okay. No worries. So these are competing with enterprise already. So again, a coffee shop, a local coffee shop is competing with Starbucks, is competing with Dunkin', but they don't have the tools and the technology available to them to be able to compete when it comes to technology. And as a result of that, in this David versus Goliath, they're super underserved and that market is very open to disruption. That's why SMB, like you see a lot of vertical SaaS going a little bit deeper. And understanding that these are smaller customers, these are smaller potential buyers

for you, but they have their unique challenges, the smaller teams, the smaller budgets, but able to really work with you and go through, getting a product that might not be as polished as an enterprise and really work with you and iterate on getting what they want is super important because then what you You can do is that you can turn those unique challenges that it comes with an SMB into unique opportunities for you to be able to gain a market and really go deep on that side. And this is why I'm so bullish on the SMB landscape. And what we've learned when we were dealing with that big block of like

grossing plateauing was that a lot of times when it comes to the SMB SaaS, you hit the wall and you would think that the market is the problem. And a lot of times I bet that the market itself is not the problem, but our approach to the market is usually the problem. The way that you can sell to an SMB is different than enterprise. What they need is different, how they buy is different, how they find you is different. So it's very important to take that opportunity to detour and to change your approach on how you sell to them.

So let's talk about bridging the gap. And basically the mantra here is that you don't have to reinvent the wheel. We just need to adapt those tactics. Enterprise, there's a lot of literature out there. The enterprise SaaS has been honing their tactics and strategies over the years. And it's a, there's a lot there to learn and we should do that. We should pick up those pieces. But when it comes to deploying them, you need to adapt those tactics and not just adopt them. We've done that with a bunch of tactics from enterprise early years. We adapted them and they didn't work. I mean, just put them aside. Outbound doesn't work for SMB. Put them aside.

And then we had to come back to it a few years later, figure out why doesn't it work? And figure out the formula and then go from there to actually adapt it to our business, to the SMB market that we are going after and really make it work. And the last thing here is about diversification. For SMB SaaS to really succeed in selling to SMBs and growing, you need to diversify and it's It's very simple. If you have an enterprise SaaS business, in order to get to that one million dollar mark, you, a lot of times, you just need one client. Sometimes you need four, five, maybe ten. But when it comes to SMB, you need hundreds of clients to be able to get to that point.

And the approach that you can get on an enterprise, to go and knock on every door to get to those handful of client, does not work when it comes to SMB. So you need diversification. Because a lot of times, things that happen is that some of those strategies work for a while and stop working. You need to come back to them and fix that. And we had to deal with that a lot. If you don't diversify, you will not be able to succeed there. So, I, I wanna jump on the Alban. I'd already mentioned it. This is, Alban was the strategy that we adapted, adopted first without adapting to it. And it didn't work.

But, we came back to it and we, we were looking at Alban specifically. Why didn't it work for us? We are going, we are working with restaurants. Our ARPU at the time was around four thousand dollar per year. And, what, what the literature was telling us is that if you don't have an ARPU of twenty-five, fifty, better hundred grand a year, Alban doesn't work for you. Well, what, what was missing from that big headline was that there are assumptions in there. The assumption on the number of leads an NSDR can generate in an enterprise, which is around one or two per week. There are assumptions around how long it takes to close a deal in enterprise, which is between three to nine months on average.

And those assumptions were not true for us, so there should have been a way for us to figure this out. And this is what we did. We had to increase and adjust our ARPU and increase that ARPU. And I will talk a little bit more about that a little bit later. We, we were able to increase that from four, four and a half thousand dollar to seven thousand. But then, we figured out, our time to close, our median time to close a deal from a demo to a closed deal is less than seven days. So that, three to nine months does not apply to me. So I can change the formula in a way that can, that can apply to me. So if I put that... One week, two weeks average in that formula.

Then I can, what I can do, I don't need fifty demo booked a week, but I need a seven to nine demo booked a week from an SDR. And the question was that can I go and achieve that? So you can change the formula if you just go look at that and just don't take the headline. So that was, that was something about Outbound. I'm gonna come to this. Outbound is, in my view, is the most underused enterprise tactic that almost any SMB SaaS business with, with about $5,000 in ARPU average yearly contract value should be able to use today. Today, Outbound is producing thirty percent of our top line revenue every month.

Now, let's jump into the tactics and the strategies. So Outbound already spoiled a little bit, so we're gonna go a little bit deeper on, on this side as well. But Outbound is an important one. So increasing ARPU was a key for us to make it successful on Outbound. The other thing that was key was channels. Again, looking at the literature for enterprise SaaS, outbound means cold email. But for us, cold email doesn't work. We are working with restaurant owners. They use email, but they don't really open it. We tried a few different things. We tried Instagram and LinkedIn messaging. Instagram worked a little bit. LinkedIn, they're not on LinkedIn, so that didn't work at all. But we figured out actually what works for us right now today,

what works for us on Outbound is actually the old school cold calling. We pick up the phone, we call the restaurant, and we don't call their, their mobile phone number. We call the actual restaurant, which you can find the data. And for our target customers, a lot of times you can find a manager or an owner at the restaurant. And if we can hone our messaging, we can get them on the call and we can book, book that demo. Right now, we have an SDR team that consistently booking nine to eleven demos a week from cold calling.

The other thing that we had to do, so we had to test channels to figure out what is the actual channel that we can, we need to use to deploy that. The other thing was that you need to find the right team. If I bring an SDR from an enterprise SaaS company, they're not used to the high-volume calling and booking. They will not be able to perform. So you need to find the right team that can do what you need from them to do really well. And that's the hard part of it. But I think it's important to just make sure you don't throw the baby with the bathwater and say it doesn't work. Sometimes it's just a team issue. The second one is, and this one is coming more from the B2C rather than enterprise,

is search and social ads. In SMB selling, you need to think about who's the target customer. And the target customers a lot of times is very similar to the B2C target customer. So our target customers, for example, for the restaurant side, they are on Instagram all the time. They're on Instagram promoting their business. They're not just exploring, but they are on Instagram. And so that if you want, you can start using both search and social ads and really capture them. There are a couple of things that are key we figured out after a bunch of testing. Targeting is key, but you can do targeting really, really well right now with the new

AI tools that are out there. You can do targeting really well. You need to increase your ad budget slowly. You need to give the algorithm time to be able to find the right type of target, the right type of audience for you. You need to train it well. So pixels and like making sure that the algorithm knows what is an actual lead for you, not just a click-through. Super important. We had to learn that, we learned that the wrong, the hard way of really optimizing on something that doesn't convert. If you can tell the algorithm what actually converted, it can go and find you more of that.

And we have been able to do that successfully with Meta at one-third of the cost of our Google Ads. And Google Ads comes with intent, Meta doesn't. But we can convert that much better now because it can find the right type of people for us. The other thing, super important here, and this is a mistake I see a lot of founders do because we don't have time to spend on ads all the time. We set and forget. This has been the biggest mistake that we've done early days. And you, like, the returns become diminished over time and it happens very fast. And the fourth one on this one is planning ahead.

Right now, for example, for us, we're gonna drop our ad budget in the next two and a half months significantly. Why? Because Meta gonna be flooded with ads because of the election. The cost for ad on Meta gonna go through the roof. And we don't wanna spend our money on high-cost leads. But then we're gonna come back in January after everybody have to spend their money and we're gonna double down on January. So you need to plan ahead with this and you cannot really get to the results immediately. And last thing is diversification. I already mentioned that more robust. I have a slide on this and tell you why, what has happened to us.

But you need to reduce your reliance on any single channel. Otherwise, you're not gonna be successful. We have had that problem on this one significantly. Let's talk about increasing ARPU. This is the, this is what we did over 24 months. Increased our ARPU 54% from about 4,500 to 7,000. There are a couple of different small steps here and one big step. Smallest step was that, once we figured out our ARPU is the blocker for outbound. What we did, instead of going horizontally and building for other markets, adjacent market, we went vertically.

Added more features, added more pieces to our software that will make it more valuable to the customer. And if I can create more value for the customer, now I can charge more for that. So we created different tiers for our subscription and we're able to upgrade people through that and really increase our order through that. The other thing, the big jump that you see in the middle is a price increase.

I highly recommend that because I believe most of you right now are undercharging for your tool. Price increase seems scary and our price increase was significant. On average, about thirty to forty percent. The net result of that was a twenty-five percent increase in revenue for us. But basically, we lost customer. We lost customer, but we were better off after the price increase. And it also enabled the outbound strategy for us.

The next one is about different channels. This is an actual text one of our salespeople sent for signing up. Text messages work really, really well right now for our customer base. And again, this is another piece about testing different methods and mediums. And this is true not just for outbound. This is true probably for a lot of other channels that you can use and you can use it at different parts of your funnel. Doesn't have to be at the top of the funnel.

And last piece that I wanted to share here is about not relying on one source. This is an email that we got in February. Google suspended our ad account for two weeks. We had to work with them and bring it back. They thought that we are doing something that we shouldn't be doing. We weren't. We got that back. But if it was a year earlier, my sales would have gone from hundred percent to zero. When this happened, our leads counts for that two weeks period dropped twenty percent. Our sales team did not feel that at all because our outbound team were able to pick that up. And that's the point of diversification. You need that because things like this will happen. Election will happen every four years, sometimes more than that.

So there are things that will happen to your strategy. If you're not diversified, you're not ready for that, you will not be able to survive past that. So, we are coming to an end, a couple of minutes if there are questions. But over the last 20 minutes, what I showed you was, we talked about the SMB SaaS landscape, why I'm so bullish about this space and why you should be as well. How you can adapt techniques from enterprise, but also from B2C when it comes to SMB selling. And of course, the strategies that we shared about, that you can use and implement for your growth today. Thank you so much for being here and listening to me. My name is again Amin.

LinkedIn is the only social media that I use right now. So if you want to connect with me on there, and my email is there if there are any questions. But we do have 2 minutes if there are any questions.