This post is ahead of our upcoming free webinar on October 19 with OpenFin, Color, Ordway and CompStak. RSVP here »
It’s predicted that the global SaaS market will reach $185.8 billion by 2024. The past 18 months have been revolutionary for SaaS companies, with some far exceeding their growth trajectories. Zoom’s sales guidance for January 2021 estimates a 330% increase from a year earlier, while Salesforce grew its sales cap by $40 billion in the last year. For many, these are aspirational figures. But how can SaaS start-ups compete? And how can they keep up with the growing and ever-changing demand?
Behind every successful and fast-growing SaaS business is a highly efficient and driven finance team. The scalability of a SaaS business depends heavily on its finance team. Changes in customer buying preferences are causing SaaS businesses to adapt the way they do business. As a result, finance teams are faced with the unenviable task of evolving legacy systems and scaling up revenue operations functions such as billing, collections, investor reporting, and revenue recognition.
We recently caught up with Steve Keifer, VP of Marketing at Ordway, to talk about the reimagining of finance in the fast-growing SaaS space and how Ordway wants to take the pain out of the whole thing.
What makes Ordway different from your competitors?
We’re trying to reimagine the way that we view the revenue side of finance. Ten years ago, most tech companies adopted a subscription model. The pricing is simple, you pay the same fee every year. But increasingly, people are adding in things like usage-based pricing or percentage model pricing. That’s creating a ton of complexity for finance organizations. A lot of the systems in the market just weren’t designed with that level of complexity in mind. So we’ve come in with more modern technology to enable innovative, scalable companies to do those things more cost-effectively.
How do you measure your client’s engagement?
We look at the percentage of their revenue in their customer base that they’re using us for and how it grows over time. So if we get 100% of their billing, revenue recognition and investor reporting and then continue to help them grow as they’re introducing new products, expanding internationally, or making acquisitions, that’s success to us.
How does your dual role with best practices and research practice work with educating your customers?
The most effective marketing is when you’re not marketing or selling at all. When you’re just helping people do their job and providing them helpful information. That’s the stuff that tends to rise above the noise on Google. So we spend a lot of time understanding the problem that our customers are trying to solve as they’re growing and scaling up and then learning from our experiences.
What’s the company vision over the next five years?
For too long, companies have been forced to design their pricing and contract strategies around the limitations of their billing system. That slows down innovation and makes organizations less competitive. We want to put an end to the tyranny of crummy billing systems and free up businesses large and small to experiment with new forms of commercial innovation – new pricing strategies, new contract structures, and new packaging models.
What are your tips and best practices for billing and pricing strategies for SaaS companies, and how can that mitigate churn?
One of the best practices is simply improving communication between the finance team and the rest of the business – working with peers across the company from the product management group, the CEO, and customer success, and understanding what’s going on in the business will help them better predict what comes next. The systems they have in place today that you might have bought two or three years ago based on your requirements may not be adequate or appropriate for what you need to do going forward. There’s value finance can provide to the business by providing more data and analytics to help people understand the financial impacts of things, both in terms of cost and revenue.
To hear more from Steve Keifer, join him for a live webinar on Automating & Optimizing Finance Operations at Scale on October 19, 2021, 2:00 – 3:30 PM ET. Steve will be moderating a panel including Jeff Woglom, VP Finance at OpenFin, Johanna Burke, Controller at Color, and Jeff Yellin, VP Finance at CompStak. RSVP here »