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AWARD: GrowthCap Top 25 Growth Equity Firms of 2022

Insight Partners has been named a Top 25 Growth Equity Firm of 2022* by GrowthCap Advisory.

Read the article and complete list of winners on the GrowthCap website here.

* The award referenced herein is the opinion of the party conferring the award and not of Insight Partners. GrowthCap, LLC (“GrowthCap”), an independent third party that is not affiliated with Insight, issued the award. The time period upon which the award was based was 1/22 – 12/22. The award was given on 1/26/23. After being notified by GrowthCap of Insight’s selection for the award, Insight paid a fee to secure award receipt. In general, the receipt of compensation influences, and is likely to present a potential material conflict of interest, relating to any granted award. GrowthCap’s recognition is not indicative of Insight’s future performance and was not based on evaluations of clients or investors of Insight. There can be no assurance that other providers or surveys would reach the same conclusion as the foregoing.

 

Compensation 101: Building Consistent Salary Ranges and Bands from Scratch

Key Insights

  1. With new pay transparency laws in New York and California, companies with as few as four employees now need to consider their compensation philosophy.
  2. For early-stage companies that might not have HR resources or guidance yet, establishing a compensation philosophy often falls to founders.
  3. Establishing salary ranges can help founders communicate their company’s compensation philosophy and stay compliant with the new pay transparency laws.

New year, new laws. One of the latest: California’s Pay Transparency Law. The new law states that companies with 15 or more employees and at least one employee in California must include pay ranges in all job postings. According to enforcement guidance issued by the California Labor Commission, the pay scale must be included in the job posting if the position may ever be filled in California, either in-person or remotely. New York City and New York State have recently enacted similar legislation. It is crucial for founders of early-stage companies to stay updated on these new regulations and understand their potential impact on their businesses.

To comply with the pay transparency laws, companies need to post salary ranges in “good faith,” i.e., a salary range the company honestly believes and reasonably expects it will pay for the role at the time of posting the job opening.


Deeper insight: Pay Transparency is Here to Stay. How Can You Build Salary Ranges in Good Faith?


One way to help simplify the compliance process is by standardizing your company’s compensation structure with clear salary ranges and pay grades/bands. While this doesn’t guarantee compliance, it does help streamline the process. But the benefits of this standardization exercise go beyond helping to meet legal requirements. Establishing a consistent compensation structure can also promote pay equity and help foster a culture of fairness and transparency throughout your organization. It is also a prime opportunity for founders to take an active role in shaping the company culture and values.

While some companies may have already established compensation bands, for many ScaleUps, this is a new endeavor. So, how should companies think about creating salary ranges and pay grades/bands if they need to start from scratch? 

Here are seven key considerations to help founders or early-stage HR leaders establish consistent and fair salary ranges.

1. Define your compensation philosophy

Your compensation philosophy explains the “why” behind your pay decisions. It provides guidance to your organization on how to make pay decisions. Your philosophy should include how you approach each compensation element (i.e., base salary, bonus, target total cash, equity). You will need to determine what proportion of pay is tied to base salary versus short-term (cash bonus) or long-term incentives (equity). You will also need to specify market targets (i.e., percentiles) for each compensation component.

2. Conduct a job analysis based on internal data to align on job families, roles, and levels

First outline the key responsibilities, qualifications, and day-to-day tasks for each role at your organization. There are several ways to do this:

  • Leveraging your own general knowledge of the organization
  • Observing employees in their roles
  • Conducting surveys
  • Referencing job descriptions
  • Interviewing employees

You will then group the roles at your organization into the appropriate job families and levels (e.g., manager, senior manager, director). Once you’ve established these groupings, stack rank the importance of these roles to your organization.

3. Leverage broad-based compensation market data based on job family and level

Market data is key to building pay grades/bands and salary ranges that are competitive. When leveraging market data, you should match your job families and roles to the data based on the overall job description and responsibilities versus relying only on the job title. Sometimes you might have to combine two different roles within the market data to ensure it covers all aspects of your role.

Additionally, it is important to note that many compensation benchmark tools leverage historical salary data and might not reflect current salary trends. Keep this in mind as you build your pay grades/bands and salary ranges.

4. Determine pay grades/bands

Start by grouping positions of similar worth at your company (i.e., they fulfill similar expectations and have similar levels of responsibility). Entry-level positions often act as the starting point of a pay grade/band because they have less training and experience.

Early stage companies might only have 3-4 pay grades/bands, whereas later-stage companies might have upwards of 10. It is important to note that there is no limit to the number of pay grades within an organization.

pay scale skills analysis

salary ranges and pay grades

This is an illustrative example. Sources: University of Florida – HR, Case Western University – HR

5. Build your salary ranges

Now you can begin building your salary ranges.  These ranges should include a minimum, midpoint, and maximum dollar (or other currency) value for each role and level. It is common for salary ranges to overlap to enable career progression in a cost-effective way.

6. Educate your managers

You want to ensure your managers understand your company’s pay philosophy so they can more easily explain to candidates and current employees how the organization makes its compensation decisions. This should include how compensation levels are determined, how the bonus plan works, and the ability to speak to equity.

7. Regularly reassess your salary ranges

Building salary ranges isn’t a one-and-done exercise. You will need to reassess your compensation philosophy and adjust as needed. These adjustments will be based on both internal (i.e., cash reserves) and external factors (i.e., market conditions).

Hiring managers should also review the established ranges prior to including them in any job postings. This will help ensure they accurately reflect what the company honestly believes and reasonably expects it will pay based on the specific considerations of the role and fine-tune if necessary. To the extent a posted salary range deviates from a role’s salary band, you should document why.

While salary banding may seem like a daunting task, getting this exercise right will help ready you for the new pay transparency laws coming online. While this work doesn’t replace the compliance process, it is complementary and will help streamline the process. Beyond compliance, a consistent pay policy will help you attract, retain and motivate employees, and build a healthy culture and organization long-term.

Want to discuss further? Onsite’s HR experts can help. Contact us: HRonCall@insightpartners.com

Please note that this guidance is not legal advice.  We suggest consulting with an employment lawyer if you have any questions about complying with pay transparency or pay equity laws.

Insurtech startup OpenEyes emerges from stealth with $23M, catering to fleets with tech-powered commercial auto insurance

NEW YORKFeb. 14, 2023 /PRNewswire/ — OpenEyes, an insurtech company serving commercial automotive fleets, today emerged from stealth with $18 million in Series A funding led by global software investor Insight Partners and Pitango First, with participation by MoreVC, which led the seed round together with Pitango First. OpenEyes will use the funding to fuel the development of its cutting-edge technology and to hire additional team members to support its increasing US operations. To date, OpenEyes has raised a total of $23 million.

OpenEyes offers commercial automotive insurance to fleets of all kinds at more competitive rates, first and foremost by reducing the frequency and severity of traffic accidents. Using OpenEyes’s innovative technology, fleet managers and safety officers can identify the sources of risk in their fleet, empowering them to implement practices that reduce the frequency of accidents. In addition, OpenEyes enables precise underwriting and streamlines claims handling and prevention. Having rebuilt commercial automotive insurance for fleets from the ground up, OpenEyes offers competitive rates to a commercial automotive insurance market that has been plagued for years by rising costs for carriers and fleets alike.

“Large numbers of accidents and high costs of claims in commercial fleets are leading to ever-increasing premiums on commercial auto insurance, making it difficult for fleet to afford coverage and maintain operational efficiency. In addition, insurance companies have been losing money for years paying out accident claims, and little or nothing is being done to address and reduce the core risks. Instead, carriers raise premiums each year to cover the ever-increasing costs of accidents,” said Yoav Oron, Co-Founder and CEO of OpenEyes. “This broken market dynamic is particularly difficult in a recessionary environment and, moreover, it disregards the human cost and impact of these accidents.  Truckers and bus drivers are the essential workers that power the American economy, and without proper insurance that leverages technology to reduce accident frequency and severity, their families can suffer dearly after an accident.”

Co-founded by Yoav Oron (CEO), Dr. Omry Sendik (CTO) and Dan Charash (Chairman), OpenEyes is committed to reducing accidents while reducing the cost of insurance. The National Highway Traffic Safety Administration (NHTSA) estimated that the number of people who died in motor vehicle traffic crashes in 2021 increased by 10.5% from 2020—the highest numbers of fatalities since 2005 and the largest annual percentage increase in history. In addition, studies by NHTSA show that large truck crashes are roughly three times more likely to result in injuries when compared to passenger vehicles.

OpenEyes is already being used by fleets driving millions of miles nationwide. The independently validated results demonstrate that OpenEyes has helped reduce the frequency of accidents by over 25.5%, and the severity of claims by over 30%.

“Since our launch two years ago, we have witnessed first-hand how OpenEyes’ solution lowers the insurable risk and the cost of claims, but more importantly, we have seen accidents reduced and lives saved,” continued Oron. “We look forward to using the proceeds of our recent round to bring this to more customers in the North American market.”

“We set out to turn the tables on insurance losses by equipping fleets, insurance partners and ourselves with a pair of eyes. Our goal is to become the first insurance company that is actively reducing accidents and saving lives while saving money,” said co-founder and CTO Sendik.

In addition to the specialized backgrounds of its co-founders and R&D team in both engineering and actuarial science, OpenEyes is partnering with leading insurance veterans and driving safety professionals to ensure it provides the best possible product. “We are proud of our achievements so far, and together with our outstanding team, we are looking forward to bringing a massive positive change to this critical industry,” said the founders.

“OpenEyes provides a novel one-stop-shop solution that enables fleets to truly understand their source of risk, from both the fleets’ as well as the insurers’ perspective. This precise understanding allows OpenEyes to power their underwriting, driver coaching and prevention, and claims handling,” said Daniel Aronovitz, Principal at Insight Partners. “We look forward to partnering with OpenEyes as the company continues to grow.”

“OpenEyes leverages cutting edge full stack technological solution to fundamentally alter the risk model of commercial fleets insurance. The integration between In-vehicle technology and insurance creates a new experience for fleet owners,” said Eyal Niv, Managing Partner at Pitango First, which co-led OpenEyes’ seed round. “In the intersection between technology and InsureTech-play, the company’s proprietary solution increases driver safety and collision avoidance while providing a faster and more accurate claim management process.”

“When we met the OpenEyes founders in the dark days of the Covid pandemic in February of 2020, we knew that they had the core values and product direction to bring light and relief to one of the largest insurance markets in the world,” said Jack Levy at MoreVC.  “We are incredibly proud to have led their seed round, and excited to continue to support their mission driven approach that has already saved many lives and brought much needed financial relief and a better experience to their customers.”

About OpenEyes
To learn more about OpenEyes visit www.openeyes.com.

About Insight Partners
Insight Partners is a global software investor partnering with high-growth technology, software, and Internet startup and ScaleUp companies that are driving transformative change in their industries. As of June 30, 2022, the firm has over $80B in regulatory assets under management. Insight Partners has invested in more than 700 companies worldwide and has seen over 55 portfolio companies achieve an IPO. Headquartered in New York City, Insight has offices in LondonTel Aviv, and Palo Alto. Insight’s mission is to find, fund, and work successfully with visionary executives, providing them with right-sized, right-time practical, hands-on software expertise along their growth journey, from their first investment to IPO. For more information on Insight and all its investments, visit insightpartners.com or follow us on Twitter @insightpartners.

[Recording] What a Unicorn Knows: 5 Principles for Growth in 2023

With the new pressures of the 2023 economy, founders are looking for ways to scale back while still being able to scale up.

Insight Partners hosted “What a Unicorn Knows: 5 Principles for Growth in 2023” to help SaaS leaders answer:

• What are the implications of the new economy, and how do they impact my business model?
• Which strategies are most important for sustainable growth?
• How do we shift our focus in 2023 and still hit our numbers?

Harnessing their deep expertise in growing B2B SaaS Startups, Insight Partners’ Matthew E. May and Pablo Dominguez will address these questions by applying the five principles from their soon-to-be-released book, What a Unicorn Knows. Join us for a snapshot of how to apply The Unicorn Model™ to your own startup.

During this session, our panelists cover:

(1:19) – Intro to the authors

(2:36) – 3 goals for the session

(3:26) – Introduction to The Unicorn Model™

(12:31) –  Principle #1 – Strategic Speed

(17:51) – Principle #2 – Constant Experimentation

(25:52) – Principle #3 – Accelerated Value

(30:55) – Principle #4 – Lean Process

(44:03) – Principle #5 – Esprit de Corps

 

Learn more about the newly released book: What a Unicorn Knows: How Leading Entrepreneurs Use Lean Principles to Drive Sustainable Growth.

Behind the Investment – AtomicJar

Insight Partners has a rich history of investing in developer testing tools. We’re proud to have supported companies like SmartBear, Tricentis/QASymphony, Browserstack, Waldo, and others which help their  customers accelerate release cycles and deliver better, more stable end products.

An emergent technique within testing we have closely monitored is integration testing – the testing of interdependent code and resources to ensure components operate as expected. As developers shift toward microservices, testing the interconnection of application components is becoming ubiquitous and an integral part of the development process.

Testcontainers has widely become the leading open-source software for integration tests, with ~7 million monthly Docker downloads and a vibrant and passionate developer community. The community’s growth is accelerating. Using Testcontainers, developers can spin up testing environments for common integration and UI tests using Docker containers, which act as “throwaway” instances for production-like replicas of external resources (e.g., databases, web browsers, other microservices). This enables faster creation and execution of integration tests and mitigates many painful issues for developers that come from spinning up and taking down tests manually.

There are lots of obstacles to using integration testing, particularly for more complex software. Keeping local testing environments up-to-date with new code releases is cumbersome. Running integration tests is taxing on local developer machines. Replicating tests from one machine to another is not as simple as it seems. Many developers we’ve spoken to have had some form of the “works only on my machine” problem where a test is successful on their laptop but not a teammate’s!

The Testcontainers’ founders set out to build a cloud-hosted, commercial version – driven by the simple belief that running Testcontainers in the cloud would provide clear improvements to development velocity and better enterprise deployments.

For this they are now launching Testcontainers Cloud (TCC). Through this new product, developers can seamlessly route integration tests to cloud servers and fine-tune their test environments to production-grade specifications, resolving the “works on my machine” problem. By sending tests to the cloud, developers also free up local compute resources and enable tests to run up to 3x faster. Developers do not even need Docker installed on their machine and can now take advantage of Cloud IDEs and other live collaboration tools.

With the launch of Testcontainers Cloud to public beta, AtomicJar offers a full suite of integration testing products. AtomicJar streamlines integration testing for software projects, regardless of scope or complexity.

Before making our investment, we conducted extensive diligence that included surveying hundreds of developers, talking to many of AtomicJar’s beta customers, and deeply understanding the product and its roadmap and were amazed by the size of the opportunity that will continue to grow as microservices continue to get adopted by companies of all sizes. We are thrilled about AtomicJar’s potential to improve the productivity of the almost 90M software developers across a wide range of industries, geographies, and software development methodologies. We’re excited to partner with them as they help lead the “shift left” of best-in-class software testing and delivery.

How to Select an Investor in 2023

Preparing to raise capital in 2023 might feel daunting given the market, but it doesn’t need to be. For great businesses, there are investors (like Insight) who are ready to invest.

Before thinking about raising money, we’re going to assume founders have checked off some of the basics listed below:

  1. Know your specific business needs for the investment. This should be deeper than the amount of money you need to raise. Founders/CEOs seeking funding should have a well-defined business plan that outlines company growth goals, target market, financial projections, and competitive advantage. This helps articulate the value of your business to potential investors and demonstrates an understanding of the industry and market.
  2. Prepare your leadership team. Fundraising takes time away from running the business, which means your leadership team must have the skills, experience, and dedication to execute the business plan and drive the company’s growth. Assemble a team that has a diverse range of skills and expertise needed to achieve the company’s goals.
  3. Have a clear plan for using the funding. Investors want to see a clear plan for how the new funding will be used to drive the company’s growth and generate a return on investment. Be prepared to present a realistic, detailed plan for how the investment will be used to achieve specific milestones and grow the business.
  4. Finally, map the market of potential investors. Asking other entrepreneurs for advice and introductions is a great way to start the fundraising process.

Once these steps are done, you’re ready to begin seriously contemplating your next fundraising partner. Deciding to bring someone new onto your cap table can significantly strengthen your business for the years ahead and inject the capital needed to move from a startup to a scaleup.

Some tips for founders:

Prenup discussions on the second date.

Being prepared with your goals and expectations for raising capital is great, but in today’s market, it’s important to have an open mind and willingness to have a conversation. In the negotiation of final documents, there is always a clear set of rights regarding rules of engagement if things go right — and if things go wrong. While this can feel as off-putting as discussing a prenuptial agreement early in a relationship, it is important all sides understand rights and agreements for all scenarios. Consider your position if things go wrong. What happens when things go wrong is as important as the conditions when things go right.

Consider dilution in addition to valuation.

You’re obviously seeking out capital, but don’t simply fixate on your company’s valuation number or the specific amount of money you want to raise. The more important consideration in the long run will be understanding the percentage of the cap table you are hoping to raise. While value is always important, if you are only raising primary capital you should consider dilution more than the post-money value. For example, if you are hoping to raise $25M at a $125M post (20% dilution), you can offset a 25% price disappointment by lowering the amount of capital raised. You can raise at $80M while limiting the raise to $20M. This is also 20% dilution. The only difference between the two deal structures is $5M on your balance sheet. The point? Valuation matters, obviously. But it’s only one of the variables. You can control the impact of valuation by adjusting the investment amount.

You want a partner that has enough capital to ideally support you through your next few rounds, and ultimately, deliver enough value to scale your business in meaningful ways beyond a sky-high valuation or fundraising amount.

Have conviction in what a new investor can do to add value.

This means two things. Firstly, what does the investor’s investment horizon look like? Do they have the capital and patience to be able to support you long-term? Secondly, how will the investor work with you and your team? It’s critical to know the skillset of your lead investor and ensure that they understand your industry, business, and goals for the years to come.

Besides the financial support of your investor, different firms will have different levels of deeper support available. At Insight, for example, there is a large team set up to support each individual portfolio company, streamlined through a portfolio management function. This ensures impactful, personalized support is delivered when and where it is needed most for each portfolio company.

Most CEOs and founders who choose to work with Insight are particularly excited by having access to Insight Onsite, a team of more than 130 of the software industry’s best operators, dedicated to supporting portfolio companies as they scale up. Understanding what resources different investors have available to you will help you strategically map out your board and partners to best support you at your stage of growth.

Select an investor with a network you can leverage through your journey.

Investors can be incredibly valuable partners and bring a unique perspective to the boardroom. However, being a CEO (or another C-Suite role) at a growing business in today’s climate can be an intimidating and lonely job. Insight’s portfolio of 600+ companies provides CEOs with an unparalleled peer network to lean on and learn from. Having a pool of people who are in your shoes and navigating the same challenges can be one of the most transformational assets for CEOs when building their business.

Insight’s portfolio experience programming is one of the most robust in the industry, made possible because of the global breadth of the portfolio. In 2022 alone, executives accessed nearly 80 intimate digital roundtables and webinars, and over 30 in-person events. Many of Insight’s CEOs choose to participate in the MINDSET CEO Summits, where, alongside their peers, they’re able to dive deep into the leadership and operational challenges they’re facing today and walk away with trusted advice on what to do next. Insight’s portfolio events are all designed to forge strategic connections and actionable tactics.

Raising money can be a challenging process, especially in 2023. But prepared with the proper guidance and expectations, finding the right partner can be transformational to the future of your business.

4 Reasons Founders Should Bookmark the New Insight Website

With more than 25 years of experience, Insight has established a top-tier position in software investing through times of market turbulence, a global pandemic, political unrest, and multiple tech hype cycles. Coming off a record-breaking 2022, we’re excited to tell our story with a completely new website. The new site is a testament to the expertise of Insight’s team and our dedication to being the best partner to software companies at every stage of growth.

Here are the four useful things founders should bookmark on the new site:

  1. Sectors: Powerful insight into the market
  2. Onsite: Insight’s secret engine for scale
  3. Stories: The journey from startup to ScaleUp
  4. Ideas hub: More than a blog

Sectors: Powerful insight into the market

Sector pages offer an unprecedented look into the pulse of the market as Insight sees it. These new sector pages showcase how we’re tracking a space, how much we’ve invested in the sector, and our most recent investments. This data is live and updated regularly, so be sure to bookmark sectors of interest and check back frequently.

In this section, you can find:

  • How much Insight has invested in a particular sector
  • How many companies we have invested in within the space
  • Thoughts from our investors on the space and what we’re looking for
  • How many companies Insight is tracking in the space
  • Our recent investments

For example, you can see from our AI/ML sector page that (at the time of writing) Insight has invested $4.7B across 104 companies in this space, tracking over 13,612 companies since 2016.

With our expansive network of buyers, builders, and talent, founders should bookmark their sector’s page to stay up to date on Insight’s investment activity in the space.

Onsite: Insight’s secret engine for scale

As an investor, Insight’s responsibility is to help our portfolio companies grow and scale. What sets Insight apart from other investors is our team of 130+ operators in sales/customer success, marketing, product/tech, and talent. The Onsite team provides operational expertise to accelerate our founders’ vision. See examples of the specific engagements our Onsite team has made in our sectors pages, or click into the team page to browse Onsite leadership and get a sense of the expertise they offer.

Insight Onsite engagement

Stories: The journey from startup to ScaleUp

There’s a reason our portfolio stories are featured at the very top of our homepage. Insight is a dedicated partner at every stage of ScaleUp growth, and our team knows software better than anyone. Our new homepage is focused on telling these success stories to celebrate our portfolio and inspire the next generation of founders.

Monday.com IPO

For example, from Insight’s homepage, you can read the story of our portfolio company monday.com. Beginning with Insight’s investment in series B, advising with a company rebranding and creation of a successful channel partners program through Onsite expertise, and participating in their series C fundraising round. In mid-2021, the partnership and hard work paid off as Insight supported monday.com through a successful IPO.

There’s a reason top founders partner with Insight — we’re committed to doing the hard work required to scale a company, and we’re equally committed to celebrating success.

Ideas hub: More than a blog

Just by reading this, you have discovered our new ideas hub. In this section, you’ll find curated content on the growth strategies, benchmarking data, industry insights, and stories that founders and leaders need. Bookmark this page as our team publishes exclusive ScaleUp reports and industry data on the topics data ScaleUps need to be successful throughout the year. Prefer to get this content in your inbox? Sign up for our newsletter, Field Notes, at the bottom of this page.

With more than two decades of investing experience, Insight’s team has learned the patterns that identify winners. With our new website, any founder can take advantage of this expertise and knowledge.

5 Strategies Marketing Leaders Need to Succeed in 2023

The famous Roman Stoic Seneca once said, “Luck is what happens when preparation meets opportunity.” Ultimately, you need both to succeed. The same might be said to marketing leaders in 2023: prepare, prepare, prepare!

There is no way to predict how the macroeconomic climate is going to shift or how it will impact B2B SaaS marketing teams. But one thing is clear — marketing leaders have their work cut out for them to thrive in what is likely a challenging environment. Many best practices that previously worked will be challenged, and agility remains critical.

Based on Insight’s close partnership and expertise in helping companies scale, we’re tracking the emerging questions we believe will shape marketing strategies in the coming year:

  1. How should you change your digital marketing strategy?
  2. What role will customer marketing play?
  3. Events: In-person? Virtual? Hybrid?
  4. How can personalization and generative AI help?
  5. What can be done to keep the marketing function whole in the face of organizational restructuring?

Read on for the marketing strategies we think will make a meaningful impact this year.

Organic efforts can yield higher ROI

One of the most significant challenges B2B SaaS organizations will face is the increasing cost of demand generation. With buyers pushing decisions out, there is a need for more touches to drive leads through the buyer’s journey, and marketers will have to be creative in order to keep their costs low.

Additionally, social media is becoming increasingly difficult to use for targeting given the recent changes across the major platforms and increased scrutiny around privacy. Facebook, LinkedIn, and TikTok have all seen CPM (cost per thousand) increase significantly in 2022. Facebook, and parent company Meta, is particularly difficult since they’ve been at the center of numerous data-related scandals, while Twitter’s shifting focus and paid options have been difficult for marketers to navigate. Twitter’s Ad Manager volume and roster of advertisers both fell sharply in October and November 2022. LinkedIn remains a great platform for targeting, though limited inventory and expensive ad spaces are becoming more common.


Key Insight: Your ROI on investing in stronger organic will likely be higher than paid digital. Reallocate budget to content and SEO.


Invest in customer marketing

As businesses started to experience a slowdown in new business ARR in 2022, customer retention and expansion became critical. Across the Insight portfolio, we saw our companies experience a 4% increase in expansion ARR between Q3 FY21 and Q2 FY 22, while new ARR was flat over the same period. Furthermore, our high-performing companies tend to see greater marketing spend efficiency due to a focus on retention and expansion.

marketing spend vs new and expansion ARR

It’s clear that customer retention will continue to be a major focus for B2B SaaS marketers. As the world continues to grapple with an unfolding economic crisis, businesses across all industries need to fight harder than ever to keep their customers from jumping ship and going to competitors that offer a cheaper price. Investing time into creating an effective customer marketing function is essential.


Key Insight: Expansion revenue will be cheaper and easier to drive than new logo this year. Consider reallocating both budget and people resources to these initiatives.


For more on the importance of customer retention and the role of marketing, read How to Grow by Marketing to Customers.

Shift the events mix

Overall, 41% of Insight portfolio companies indicated event budgets in 2023 will remain the same compared to 2022, while 25% are increasing budgets, and 34% are experiencing a decrease in budget.

events budgets in 2023

With inflation hitting everything from travel expenses to on-site cappuccino machines, events may become a more difficult and expensive prospect in 2023. Data from Insight portfolio company, Bizzabo, suggests that in-person events remain important and are here to stay: 72% of event organizers indicated that in-person events remain a crucial part of their overall event strategy, 98% plan to host at least one in-person event next year, and 85% plan to host at least three.

However, for companies experiencing significant budget constraints, virtual event platforms could provide the solution. Think webinars, tailored content facilitated by virtual assistants and AI bots, as well as interactive 3D experiences. These solutions can help marketers reach new customers and keep current ones engaged in a more cost-effective manner, allowing them to maximize their budget. According to Bizzabo, 68% of event organizers plan to have a virtual component at their next in-person event, and 53% are “focused” or “very focused” on a virtual events strategy for 2023.


Key Insight: Maximize your event budget by getting the right mix of virtual, live, and hybrid events. Make sure to include multiple tactics to drive multiple objectives for events such as brand building, pipeline acceleration, and partner marketing.


For a full playbook on how to think about Hybrid Events, read Virtual, In-Person & Hybrid Events? Oh, My!

Enlist help from AI

Personalization will be key in 2023. As the target market continues to become more demanding, B2B SaaS markets must lead the way in providing a bespoke journey for each customer. From tailored content and products to automated emails and personalized ads, marketers need to find ways to make their customers feel like they are the only ones that matter — and it needs to be done at scale.

Many companies are also starting to experiment with generative AI in creative ways. From creating short-form bespoke content and LinkedIn posts, to brainstorming webinar ideas and product names, the use cases for generative AI are expansive. Be careful to validate content produced by generative AI to ensure the facts are correct.


Key Insight: Personalization demands more content than most marketing teams are capable of creating. Begin experimenting with tools like Jasper and Writer to leverage the power of generative AI and bridge the gap.


For more on generative AI, read What Marketers Need to Know About AI-Generated Content.

Keep marketing’s seat at the table

Marketers will need to fight hard to keep the marketing function whole in the face of organizational restructuring. Marketers need to be aware of the dangers of “siloing” their team. It’s becoming increasingly common to split off demand generation and put it under the CRO’s domain, product marketing connected to the product organization, and marketing operations placed under revenue operations. As B2B SaaS organizations continue to become more complex, it’s important for marketers to have a seat at the table and ensure that their efforts are aligned with business goals. Tools like BlueOcean can help marketers quantify their collective business impact by providing insight into how ads, content, brand messaging, and more compare to competitors. By directly tying brand value and other marketing activities back to business impact, marketing leaders can maintain a seat at the table.


Key Insight: While some marketing activities may seem to fit better under another functional area, the loss of integrated messaging and tactics will cost the organization far more.


2023 is likely to be an interesting year, but with the right strategies in place, B2B SaaS marketers can emerge as winners. So, start preparing now and maybe your organization might get lucky with a strong year of performance.

Editor’s note: Jasper, Writer, BlueOcean, and Bizzabo are Insight portfolio companies.

How to Grow by Marketing to Customers

With many ScaleUps prioritizing customer retention and growth in 2023, marketers must deepen the impact of their customer marketing program.

Engaging customers is good for business, as they can be a company’s most efficient source of growth. GTM teams can generate additional revenue from customers for as little as 1/10th the cost of new business. It takes less time, effort, budget, and companies typically win customer opportunities at a higher rate.

When new business demand wanes or customer churn increases, ScaleUps must respond by changing how they market throughout the revenue cycle. But, in our mid-2022 survey, only 11.1% of Chief Marketing Officers (CMOs) reported feeling “very well prepared” amidst increasing macroeconomic uncertainty. Meanwhile, 87.3% were experiencing softening demand.

CMOs’ uneasiness might, in part, stem from their comparative lack of engagement with customers after the deal is won. Throughout recent boom years, most CMOs have focused on generating new business. As a result, they’re ill-positioned to retain and expand business from existing customers.

From Insight’s Budgeting & Planning survey of ScaleUp companies, we know that customer marketing has received the least investment out of the seven key marketing functions. By comparison, the typical ScaleUp adds a CSM for every 19 enterprise and 34 mid-market customers. Additionally, just 1 in 5 account-based marketers say customer expansion is in their remit.


Read more: CMO Playbook for Economic Headwinds: Make Your Move Before It’s Too Late


To mitigate softening demand and diversify a business’s revenue mix, marketers must help expand customers. Doing so will supplement near-term deficits in growth and improve marketing’s efficiency over the long term.

“It’s a team effort. Marketing must play a role in driving growth throughout the revenue cycle. They connect sales with new buyers and help close deals. After the sale, marketing partners with customer success to deepen our relationships with our existing customers, driving product adoption and expanding across divisions or territories within a single account.”

-Tal Kain, CEO of Velocity

How? By collaborating with their peers in sales and customer success to do the following:

  1. Forecast addressable customer revenue
  2. Set objectives, goals, and KPIs
  3. Develop a post-sale strategy
  4. Resource and integrate post-sale teams
  5. Execute a joint tactical playbook
  6. Operationalize a unified “go-to-customer” process

Forecast addressable customer revenue

Why it matters: Know the size and types of opportunities within your customer base to decide where to focus and how much to invest. Consider how investments in customer retention and expansion impact your firm’s “Rule of 40” performance (e.g., X% growth rate + Y% profit margin = 40%).

Analyze your current opportunity mix:

  1. How quickly and efficiently do you generate profit?
  2. What changes could you impart on your opportunity mix by investing in post-sale marketing
  3. How might your changes to your opportunity mix impact how efficiently you generate profit?

Based on your forecast, scope your post-sale marketing initiative:

  • Pilot. If the size of the opportunity seems modest or uncertain, plan a narrowly scoped, but representative, pilot. You might focus on improving one or two post-sale outcomes by deploying a small tactical play in a limited customer segment.
  • Sprints. If the opportunity is significant and certain, introduce customer marketing elements in waves, evaluating their impact along the way.

You’ll likely need to make tradeoffs, prioritizing which investments you make within your opportunity mix.

“As a startup company, your rapid-growth strategy for Year 3 should have a lot more customer opportunities than Years 1 and 2.”

-Kerry Cunningham, Senior Principal of Product Marketing, 6sense, and co-author of The Demand Unit Waterfall™

Set objectives, goals, and KPIs

Why it matters: GTM teams must align on goals and how they measure their progress toward said goals.

Once you’ve forecasted the ideal opportunity mix, define your objectives to focus your post-sale program plan. You could:

  • Accelerate time-to-value.
  • Improve product adoption and/or drive more utilization.
  • Upsell to more and/or higher price tiers.
  • Cross-sell the same buyers to additional products.
  • Cross-sell new buyers within a customer account.
  • Secure renewals, reduce churn, and/or prevent downgrades.

Once you’ve homed in the changes you seek to impart on the customer lifecycle, determine which KPIs best measure those changes and set goals for each KPI.

You can use benchmarks to help you set goals. But the benchmarks aren’t your goal, they’re a conversation starter. Consider variables, such as growth stage, expansion motion, and customer characteristics.

Develop a strategy

Why it matters: Businesses must focus on just a few key ways they can provide value to customers–beyond the product itself–and a few key ways in which they can enable staff to deliver on said customer value.

Here’s how:

  1. Brainstorm all the levers you could employ to create value.
  2. Prioritize those levers which create the most value. Pick no more than a few.

Once your go-to-customer strategy is set, refine your customer marketing strategy. Develop customer ICPs, personas, and buyer journey models. Then use those models as a basis for your post-sale messaging strategy.

Customers can be different than buyers in several ways:

  1. Marketers should clarify the differences between pre- and post-sale customer profiles.
  2. They must get to know which personas emerge once the buyer has purchased a product.
  3. They must understand their customer’s journey.

With these insights in hand, marketers can develop messages that motivate a customer to move through the post-sale cycle.

Resource and integrate post-sale teams

Why it matters: Resource your post-sale team well enough to deliver value to the customer, without burdening post-sale efficiency. Hire the right people and place them into the right structure.

Start first by identifying who in your company already owns each part of the customer journey (e.g., Customer Success Manager, Account Manager). Then, consider which marketers might be best suited to partner with them:

  • What capabilities do I need?
  • Given my targets, how will I resource the team? Which hires must I prioritize?
  • How will I balance in-house and outsourced talent?
  • How will I structure my staff?

Your opportunity mix offers clues, as does the functional scope of other GTM teams. Though the marketing team could outsource some of the work, it’s best done by in-house staff who have the skills and business acumen to engage precious customer points of contact.

Execute a joint tactical playbook

Why it matters: GTM teams can employ a nearly endless array of tactics. So, they must draw on their go-to-customer strategy to determine which tactics to execute. The delivery must be well-orchestrated if the message is to have its intended effect. The right tactics, at the right time, with the right people.

Like a sports team might coordinate its offensive players against the defense, a GTM team executes a post-sale play oriented to a target customer’s traits and the business’s objectives.

  1. Based on your objectives and strategy, which plays will you run?
  2. How do those plays suit your customer ICP, personas, and journey?

Based on your answers, create a playbook in partnership with cross-functional GTM teams.

Operationalize a unified “go-to-customer” process

Why it matters: Ensure customer-facing stakeholders know what, when, where, and how to support the customer.

“Our marketing team is partnering with customer success to offer additional value to our customers. We host product release webinars for customers, where they learn how early adopters are putting to work new software capabilities. We’ve found our customers respond better to learning from their peers — and are more likely to ask for a demo — versus a marketing email alone.”

– Jamie Walker, EVP Marketing at Keyfactor

Build boosters and remove blockers to ultimately create value for employees, suppliers, and customers.

  • Incentives. Evaluate your performance-based pay to ensure incentives align to customer outcomes and KPIs.
  • Recognition. Revise your internal communication and meeting cadences to celebrate customer wins.
  • Technology. Evaluate your tech stack to determine if you have the right tools, configured to meet the requirements of customer engagement. If you don’t, procure new tools and/or change the configuration of your existing ones.
  • Vendors. Evaluate the capabilities you have on-staff, the capabilities you need, and the gap between. Outsourcing might be the most efficient way to fill these gaps.
  • Enablement. Seek out ineffective elements of your cross-functional customer operations. Then, develop a “learning agenda” that addresses those elements via an enablement program.
  • Documentation and monitoring. Evaluate your operational performance. Then, define essential processes and monitor their performance.
  • Report. Brainstorm the key questions post-sale staff must answer for themselves. Then, consider which metrics they’ll need to answer those questions and how best to present the metrics in a self-service dashboard or report. Finally, decide which systems to use for reporting.
  • Automate and outsource. Audit your processes and procedures for opportunities to outsource and automate.
  • Fun and relationships. Foster an engaging culture for your post-sale staff and create avenues by which they can build relationships with your customers.

For many businesses, customers represent a compelling source of efficient growth. This growth results from strategically creating value for customers, as well as for employees, suppliers, and partners.
GTM teams can carefully craft tactical plays, executed by way of tightly coordinated go-to-market operations, to deliver an excellent customer experience. In doing so, they’ll earn their customer’s loyalty and advocacy, generating better margins for the business.

 


Examples in practice

To illustrate the strategies outlined above, let’s use an imaginary drone data analytics company to show how these principles work in practice.

Forecasting addressable customer revenue

A drone data analytics company offers software modules that each process three different types of aerial images: photographs, infrared, and thermal.

  • Most customers start by purchasing the photography module.
  • The software provider licenses the modules on an annual subscription and charges a small fee for each image processed.
  • Infrared costs more than photographs; thermal is the most expensive.

Here’s how they might evaluate their opportunity mix:

  1. Increase Utilization: Photography. The marketing team forecasts that it would cost $0.05 per image to drive more photograph processing (i.e., increase utilization). But they earn just $0.01 in revenue for each image processed.
  2. Cross-sell Infrared to the same buyers. They expect that marketing the cross-sale of the infrared module would cost $2,500 per sale, but earn the business $10,000 ARR.
  3. Cross-sell Thermal to different buyers within existing customer accounts. Supporting cross-sales of the thermal module would likely cost $5,000 per sale, but earn the business $20,000 ARR.

So, the marketing team will prioritize support for the thermal module, since it has the best dollar-cost return ratio, followed by infrared (if they have budget leftover). They won’t help drive more photographic image processing, since they forecast a net negative outcome.

Set objectives, goals, and KPIs

KPIs (Output Metrics)

1. Cross-sell thermal modules to 50 new buyers within customer accounts.
2. Cross-sell infrared module to 100 existing buyers within customer accounts.

Key Results (Input Metrics)

1a. Generate 100 cross-sale opportunities
1b. Improve win rates for thermal cross-sales from 35% to 50%

2a. Generate 135 cross-sale opportunities

Develop a strategy

Customer Value
• Community. Create an “advanced imagery” community, where pro users of infrared and thermal imagery can share best practices with novices.
• Training. Develop an “advanced imagery training program” to help photo users learn how to use infrared and thermal imagery.
• Discounts. Offer “existing customer” discounts for infrared and thermal modules.

Staff, Vendors, and Suppliers Value
• Incentives. Offer a spiff/bonus to relevant GTM staff for attaining net new cross-sale goals.
• Training. Direct all GTM staff to take the same “advanced imagery training program” we offer to customers.
• Data-based targeting. Develop a predictive data model to identify prime cross-sale targets.

Resource and integrate post-sale teams

The drone company will hire:
• Community Marketing Manager
• Learning & Development Content Marketing Manager
• Product Marketing Manager, Infrared and Thermal Sensors

They’ll outsource:
• Customer community event production
• Technical copywriting
• Training content design

Execute a joint tactical playbook

Here is an example of how a customer marketing playbook could look for our drone company.

customer marketing playbook example

Six Best Practices for Your First 90 Days as a Data Leader

For newly hired data leaders, the first 90 days are crucial. For existing data leaders, it’s prudent to take a step back at least once a year, think about the business with fresh eyes and ask: What would a new data leader try to address in the next 90 days?

Regardless of title, CxOs of young and established organizations realize their ability to make excellent data-driven decisions is a must to achieve the company’s business goals. In the current resource-stretched climate, the CTO, CIO, or CxO often wears the data leader’s hat. This is especially the case at early-stage companies too small to have this position. But while the role of the data leader is still often shared, a data leader’s acumen and approach for data-driven decisions can be adopted by many leaders to have a significant impact on revenue and growth.


Key Insights

Every enterprise and business case is unique, but today’s data leaders have established a set of best practices to chart the digital pathway to profitability:

  1. Unify data and AI strategies
  2. Cultivate an open data culture
  3. Solve customer problems
  4. Capitalize on early opportunities
  5. Align stakeholders on priorities
  6. Inspire the team

Unify Data and AI Strategies

Young organizations often struggle to create meaningful data strategies. The key is to recognize where emerging trends and company needs intersect, and then create a roadmap to fulfill short- and long-term needs with technology that provides a competitive advantage. The data leader is aware of the importance of aligning data and AI strategies to better serve the organization’s overall mission.

A 2022 survey revealed that over half of the data executives surveyed expect AI to become “critical” to multiple facets of their business by 2025. While most companies expect to adopt AI technologies, many data leaders are looking even further ahead to more advanced forms of artificial intelligence. Techniques such as generative AI — capable of creating rather than simply predicting — has a fast-growing number of use cases.

 

Read more: 8 Tech Investors Share Predictions for 2023

 

A sophisticated AI model requires a modern data stack. Companies that can invest in their data infrastructure will be able to more successfully capitalize on emerging AI techniques. A full-stack approach to ETL (extracting, transforming and loading) data, creating data lakes and lakehouses and de-siloing data architectures can give companies a real competitive edge.

Similarly, powerful AI needs DevOps and MLOps tooling to support it. As the role of AI grows within an organization, data leaders will need a more robust foundational toolset if they want to identify which features of their data provide signal (a process known as feature engineering). This also holds true if they want to improve model training, deployment, and monitoring. Additionally, not all MLOps stacks are created equal — AI working with unstructured data requires different pipelines than those working with structured data. The same distinctions exist for generative versus predictive AI.

Today’s data leaders are seeing these AI trends play out in real-time and are adapting their enterprises to take advantage of what AI can offer for data-driven decisions and strategies. This is important not only to promote growth and accelerate innovation but to build resilience during periods of austerity. With the global economy in a period of stagflation (stagnation and inflation), the ability of business leaders to extract value from data could be a deciding factor in how well a company weathers the storm.

Cultivate an Open Data Culture

How a strategy is defined is up to leadership, but how well it is executed is often a function of company culture. Executives are reshaping their organizations to become more data-oriented, but the vast majority still point to culture as the greatest challenge in becoming a data-driven organization.

Successful data leaders hit the ground to build a data-driven culture by identifying stakeholder needs and responding to them with data-driven decisions. Bear in mind that the ultimate stakeholder is the customer. Organizations invest heavily in research to identify who their customers are, what their needs are, and how they differ by region and culture. Expanding these data sources and creating channels where data can be translated into actionable insights is a fundamental part of a data-driven culture.

The organization itself has hurdles to overcome: diversification of customer base, changing business priorities, and infrastructure and scalability concerns. External regulators demand certifications and scrutiny to ensure compliance with standards.

To succeed amid this tangled web of expectations, data leaders have established a practice of identifying objectives that are mission-critical to meet — those actions or failures that could cause a loss of stakeholder confidence.

Solve Customer Problems

Without data, there is no visibility in customer buying patterns, adoption, and behavior. For SaaS companies in particular, identifying a common enterprise data model is foundational to learning about their customers and fulfilling core business responsibilities. This is especially critical in the wake of multiple mergers and acquisitions, when customers may have to deal with multiple quotes, orders, contracts, and invoice formats that don’t match.

At the heart of all data is customer identity data, and your process for customer identity conflict resolution will be key. Unified data models allow businesses to integrate multiple data streams into enterprise resource planning pipelines. How to create and interpret information gleaned from data models might be beyond the technical capabilities of the data leader. However, data gleaned from the data model can provide an easily accessible wealth of information about how well the organization as a whole is able to fulfill customer needs.

Read more: 7 Habits of Effective Data Leaders

Merging these data streams provides much better visibility into customer buying behavior. This includes better insights on lead generation, sales conversions, annual recurring revenue (ARR), customer acquisition cost (CAC), net revenue retention (NRR), and more. More insights allow for better decision-making in every department of the organization. As with software quality and usability for an engineering department, this is a case of operational details determining strategic success. For companies growing through mergers and acquisitions, this is especially important.

Capitalize on Early Opportunities

Understanding where the business’s data organization performs against key performance indicators (KPIs) is an important part of a data leader’s job. Data leaders use a series of self-assessments to understand the strengths and weaknesses of their organization’s data strategy and capabilities. To really deliver value, however, executives often chart a series of phases for their data strategy — the so-called “Crawl, Walk, Run” progression.

As with any “baby steps first” approach, the essential “crawling” phase sees the development of the initial capability by building out the data stack and analysis pipeline. Once a process is in place, leaders can advance to the “walking phase” — fixing the parts of the process that are present but broken. The good news is the switch from walking to running is the easiest, as process fixes eventually become process optimizations.

It’s also important that this process is iterative. At some point, a process can no longer be optimized. In strong data-driven organizations, there is a point at which the team will look for more advanced technology to build, introducing more capabilities than previous optimizations could accomplish. This is also where the data leader’s leadership in building a data-centric culture, their attention to instituting policies for governance and security, and their investment in technologies such as generative AI and MLOps pay off.

This step is important for new data leaders. The average tenure of a data leader is 30 months, significantly shorter than for other executives. Data leader turnover, driven by a gap between expectations and results, often happens because leaders do not seize these early opportunities. This applies equally to data leaders hired to build data departments, and to those hired to make structural architectural changes (especially after a big data breach). Data leaders that fail to deliver demonstrable improvements — both in the department’s operations and overall business impact — struggle to make it past the two-and-a-half-year mark.

Align Stakeholders on Priorities

Balancing a host of competing priorities — investing in emerging tech, building culture, and process optimization — is difficult. Today’s data leaders have adapted by creating a prioritization framework along two axes:

  1. Importance to the business
  2. Difficulty of implementation

Understandably, data leaders often pursue the low-hanging fruit first, consisting of high-priority and low-difficulty items. Although those characteristics seem mutually exclusive, there are changes data leaders can make to secure easy wins. Achieving success for these items can be as simple as instituting transparency policies to keep the board updated on data-driven processes, such as the company’s data privacy and security efforts.

In 2021, less than half of surveyed corporate boards received reports about cybersecurity risks. Another survey revealed progress continued to be slow — only 37% of surveyed board members felt confident that their company was secure. Providing transparency and clear reporting can be on the lower end of the required-effort scale, while it boosts the board’s confidence in the company’s data initiatives and security posture.

Data leaders can use clear reporting to secure buy-in from board members and other stakeholders, demonstrating that their leadership and priorities are leading the company to a better place. Creating this continuous feedback loop helps keep board members, other executives, vice presidents, directors, and even customers, on the same page. It also smooths the way for future initiatives.

Inspire the Team

Finally, every data leader is a team leader. Inspiring the data team to reach new heights provides a force multiplier for growth. Storytelling using data and visuals can serve as a way to lead by example to inspire the team, ultimately changing the company’s trajectory from being a follower to becoming a leader — even a disruptor — in an industry segment.

Investing in technologies like generative AI not only unlocks new capabilities for the company but also provides opportunities for employee growth. It creates better data scientists and engineers.

It also ensures that, as the company grows from early-stage to ScaleUp, the data department remains competitive from a talent standpoint. Data leaders today are capitalizing on the investment in new trends to attract diverse and capable data professionals.

Taking charge of an existing data department — or taking on the role of building one — is a daunting challenge. But data leaders are tackling that challenge with careful prioritization, an eye on the technological horizon, and attention to the intersection of customer problems and business opportunities. They identify low-hanging fruit and communicate their early successes. Make that your plan for your first 90 days, and you’ll be off to what everyone can see is a great start.