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📅 GEEKS OF THE WEEK

5 bookmark-worthy links:

• Time management techniques that actually work!

• Integration and Android

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• Mapping your entire buying universe

• Scaling Your GTM Team: Full-Cycle vs Specialized Sales Roles

🧠 GEEK OUT

Designing future revenue mix to level-up your growth plan

I’m always surprised when I meet a founder who can roughly tell me what their revenue mix looks like today, but is unable - or hasn’t yet considered - what they think it should be in 12, 18, 24 or 36 months from now.

I’ve found that incorporating the detail of revenue mix shift into the planning cadence - and as an overall gauge on the business - to be a very effective way to increase alignment across the company around the things we need to change to achieve the overall business goals that we've set.

Of course, the right way to do it is to incorporate this as an integral part of how you set those overall business goals.

Different types of revenue mix

I like to apply two types of revenue mix shift in planning, but your business may benefit from others (for example if a significant portion of your revenue is services based and you aim to reduce that over time in favour of more efficient recurring software subscription revenue, then you’d want to include that perspective).

For B2B SaaS companies I find the below two perspectives most valuable:

1. Sales motion

• Product-Led, Self-serve

• Product-Led, Sales-assist

• Sales-Led

2. ARR band

• $0-100

• $101-1000

• $1001-5000

• $5001-20000

• $20001-50000

• $50001-100000

• $100001-500000

• $500001-1000000

• $1M+

For ARR band, the values you use for each band should make sense for your business. So long as they are appropriate* for your business and market, the specific numbers are less important.

What matters is creating the bands and using them to track revenue over time and to plan how you want that to change.

A simplistic planned mix shift focuses on change over time to the sales motion, with an assumed ACV for each motion.

A more detailed model brings in revenue bands for a more granular perspective.

Here’s a simple example from a PLG-native company with an initial 100% reliance on low-ACV self-serve revenue, shifting over time to a hybrid go-to-market model, increasingly capturing larger opportunities with an enterprise sales motion.

You’ll need to look at percentages (for a macro perspective) as well as actuals as you more deeply explore and discuss the implications.

Implications of planned revenue mix shift

There are many potential implications of a planned revenue mix shift.

• Need to support new use cases in product

• Need to add enterprise specific governance capabilities

• Need to evolve your ICP

• Need to target different personas within your ICP

• Need to introduce a self-serve motion

• Need to introduce product-led sales

• Need to introduce outbound sales and marketing

• Need to change GTM hiring velocity

• Need to adjust sales floor (typically via some of the other things in this list)

• Need to introduce new marketing channels

• Need to retire features and/or products

• Need to invest in greater support efficiency

• Need to drive more top-of-funnel new user acquisition

• Need to increase month X account-level retention

• Need to reduce ramp time for new reps

• …

Considering that all these changes imply some varying degree of implementation lead time, as well as further ramp time to take effect, you can see the importance of having greater clarity in your target.

It’s important to note that you don’t do this in isolation, or even to lead your strategic planning, but rather to augment and support it. 

It should provide an additional level of fidelity in your product and go-to-market planning.

Use it to more confidently answer questions like

and, given some assumptions on S&M spend across different ARR bands,

It will never exactly go to plan of course, but this analysis and asking and answering the right questions will lead you to create better plans that the team can understand and rally behind.

If we look again at our scaling PLG company, our plan might look something like this:

• Q4 2024: First Sales Hire and Launch Product-Led Sales to begin to drive adoption in mid-tier+ segments.

• Q1 2025: Add support for key adjacent use case in product to open expansion revenue opportunities, attract a wider range of customers and increase product stickiness.

• Q2 2025: Add Product Growth Team to drive top-of-funnel new user acquisition and improve activation and engagement to fuel PLS expansion revenue.

• Q4 2025: Introduce Outbound Sales and ABM to target high-value accounts proactively.

• Q2 2026: Launch single-tenant SaaS offer to target F500 enterprise customers and unlock $500K+ opportunities

• Q3 2026: Launch Partner Program to further accelerate enterprise adoption.

• Q4 2026: Introduce New Brand Marketing Channels to drive demand gen amongst F200.

It’s not set and forget

You need to monitor progress and consciously adjust your execution accordingly.

How are we tracking against our plan at any given point?

• Is the plan still valid?

• Have our assumptions changed?

Or more specifically ask questions like

• Did the change in our ABM strategy lead to the revenue impact and mix shift that we expected?

• Is our new self-serve motion driving the coverage we wanted it to at the lower end of the market?

• Did our new product offer lead to the attach rates and ACV change that we planned?

You’ll also want to look back at historic mix shift.

Doing so will help you identify trends that you may need to act upon.

For example unexpected and unplanned relative increase in growth in a lower revenue band at the expense of a higher band could indicate issues such as

• Incorrectly defined ICP

• Poor positioning

• Misaligned targeting

• Sales skills gaps

• Product gaps and deficiencies

• …

So the data here can be a signal that alerts you to potential issues needing further diagnosis.

Summary

None of this is rocket science, and plans inevitably change, but whenever I’ve seen this done as part of a regular planning cadence it’s generated incredibly useful discussions that forced assumptions to be stated, tested and challenged, and ultimately led to better informed and aligned plans. The bottom-up input also helps to create goals that are better considered, with increased buy-in across the org.

Give it a try!

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Until next time!

— Ben

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