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Customer segments vs revenue base

Most companies waste a big portion of their marketing budget by allocating Marketing spend equally between Best-Fit and Bad-Fit customers.

Your Best-Fit Customers will make up the bulk of the revenue you generate:

-They have higher conversion rates and lower payback periods

-They are more likely to expand their accounts

-They churn at a much lower rate

 

Conversely, your Bad-Fit Customers:

-Have significantly lower conversion rates and sky high payback periods

-Are resistant to expansion, cross-sell and upsell

-Churn much faster, often in the first year

 

This disparity needs to be reflected in how marketing budgets are allocated.

The key is to dig into your customer data to understand who your best-fit customers are and then allocate the bulk of your marketing budget to acquire more of those customers.

The better you allocate your budget to best-fit customers, the faster you'll grow and the more impact marketing will make.

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