This week, Ellie Wu and I challenged the TechCrunch Disrupt audience to boost their growth and profitability by forming a PACT between their Marketing and Customer Success (CS) teams. Here were the takeaways:

Growth and profits sunk in 2022. The median B2B SaaS growth rate dropped by 12pp and profit margins by 5pp (1). That’s a 17pp downswing in the Rule of 40.

Why does a slumping Rule of 40 hurt? Beyond the indication that business is turning southward, the indicator also foretells a slump in valuations (2). That’s because markets use, in part, Rule of 40 and its component indicators to gauge a company’s health.

What are smart companies doing about the malaise? We looked to top performers in our portfolio (and beyond) to find out: Many are tapping their customer base. And they’re doing it with Marketing’s support.

We modeled four “benchmark companies,” who were the exact same, save one difference: the Marketing Budget allocated to customers. Our model proved the benefits of expanding customers: it costs less than closing new ones (3).

Your company can seize on this comparative efficiency by forming a PACT between your Marketing and CS teams:

Pick opportunities. Marketing and CS should profile their customer base, looking for those customers that are “in-market” for expansion and prioritizing them by comparative return.

Align to a strategy. With opps prioritized, the joint team should then set a strategy. How will they deliver value to customers beyond the product? Better onboarding? New insights? Whatever strategic value lever they might focus on, Marketing and CS should share in joint objectives and KPIs for it.

Collaborate on plays. Marketing and CS must then bring their strategies to life by producing joint plays: integrated tactical executions that “plus-up” various parts of the buying center. We’ve seen some extraordinarily clever ones in our research–Insight portfolio companies can ask me for the playbook.

Tune the approach. Finally, the teams must balance these incremental investments with acquisition and opportunity costs. Too much, and you kill profitability. Too little, and you risk turning customers into detractors. Pilot every improvement.

There’s more to PACT than that–Insight Partners portfolio companies can reach out to Ellie or me for the full briefing and playbook.

It was a privilege to represent Insight Partners at TechCrunch and meet all the extraordinary founders from across the world. (A dream fulfilled, really.) Massive shoutout to my powerduo partner Ellie Wu, CCXP, and all those who helped us along the way!

(1) Benchmarkit. B2B SaaS Metrics Benchmark: 2023 Report. n = 690
(2) Insight Partners. Analysis of public SaaS companies 2Q22 – 1Q23. 1. Enterprise Value / NTM Revenue
(3) Insight Partners. 1. ScaleUp by The Numbers. 2. Marketing Budgeting & Planning. 2023; The Successful Customer: SaaS Firms 2015-2019 TechCrunch