How Craver Grew ARPU 54% to $7,000 and Reignited Growth After 6 Quarters of Stagnation (Interview with CEO Amin Yazdani)

Introduction: Amin and Craver's SMB SaaS Focus

Amin Yazdani

00:04Hi, everyone. My name is Amin. I'm the CEO of Craver, a food tech startup working on SMBs. And today, what we're gonna be talking about is the SMB SaaS playbook and how you can go building a high growth SaaS engine by bridging the gap between the enterprise and SMB tactics.

Agenda: SMB SaaS Landscape and Bridging the Gap

Amin Yazdani

00:24Over the next twenty minutes, this is what we're gonna be looking at. So one is let's have a look at the SMB SaaS landscape, why SMB SaaS is a gold mine of opportunity and what are the key differences between SMB and enterprise SaaS and each one of those differences actually matter. We're gonna be then looking into bridging the gap between the two, how to adapt enterprise tactics when it comes to sales and marketing to SMB SaaS

Six Quarters of Stagnation and the Need to Reignite Growth

Amin Yazdani

00:54And the importance of diversification when it comes to the sales and marketing tactics specifically for SMBs. We're gonna be talking a little bit more about that and of course I'm gonna be sharing some of our tactics and the strategies and the practical tactics that you can implement to accelerate your growth today. Now, why am I talking to you about this is because after an initial growth that we had, we've been dealing with six consecutive quarters of

01:24stagnation. We hit a wall in early in 2021 and we were not growing anymore. Those six quarters is where we were really trying a lot of different tactics, figuring out what's not working to be able to reignite our growth. And thankfully we were able to do that. So those strategies that helped us reignite that growth are gonna be what I'm gonna be talking about today and how did we go from there to turn around and really

Why SMB SaaS Is a Gold Mine of Opportunity

Amin Yazdani

01:57start our growth engine again. But first, wanna I talk about the SMB SaaS landscape, and it's super important. It is a gold mine in This is why I'm so bullish on SMB SaaS in general and vertical SaaS. It is a gold mine of opportunity. There's more than 30,000,000 SMBs in The US alone. So the size of the market is very big. And when it comes to what they need and how you can serve them,

02:28these SMBs a lot of times are competing with enterprise. Like we are in the restaurant market, our customers, coffee shops, local coffee shops is competing with the Starbucks of the world.

02:44Is it better now? Okay. No worries. So these are competing with enterprise already. So again, a coffee shop, a local coffee shop is competing with Starbucks, competing with Dunkin', but they don't have the tools and the technology available to them to be able to compete when it comes to technology. And as a result of that, in this David versus Goliath, they're super underserved and that market is very open to disruption. That's why SMB, you see a

03:17lot of vertical SaaS going a little bit deeper and understanding that these are smaller customers, these are smaller

03:28potential buyers for you, but they have their unique challenges, smaller teams, smaller budgets, but able to really work with you and go the getting a product that might not be as polished as an enterprise and really work with you and iterate on getting what they want is super important because then what you can do is that you can turn those unique challenges that it comes with an SMB into unique opportunities for you to be able to

SMB Unique Challenges and Turning Them Into Opportunities

Amin Yazdani

03:57gain a market and really go deep on that side. And this is why I'm so bullish on the SMB landscape. And what we will learn when we were dealing with that big block of like the gross plateauing was that a lot of times when it comes to the SMB SaaS, you hit the wall and you would think that the market is the problem. And a lot of times, I bet that the market itself is not the

04:25problem, but our approach to the market is usually the problem. The way that you can sell to an SMB is different than enterprise. What they need is different, how they buy is different, how they find you is different. So it's very important to take that opportunity to detour and to change your approach on how you sell to them. So let's talk about bridging the gap. And basically the mantra here is that you don't have to reinvent

04:54the wheel, we just need to adapt those tactics.

04:59There's a lot of literature out there, enterprise SaaS has been honing their tactics and the strategies over the years. And there's a lot there to learn and we should do that. We should pick up those pieces. But when it comes to deploying them, you need to adapt those tactics and not just adopt them. We've done that with bunch of tactics from enterprise early years. We adopted them and they didn't work. I mean, just put them aside.

05:28Outbound doesn't work for SMB, put them aside. And then we had to come back to it a few years later, figure out why doesn't it work and figure out the formula and then go from there to actually adapt it to our business, to the SMB market that we are going after and really make it work. And the last thing here is about diversification. For SMB SaaS to really succeed in selling to SMBs and growing, you need

05:58to diversify and it's it's very simple. If you have an enterprise SaaS business, in order to get to that $1,000,000 mark, you a lot of times, just need one client. Sometimes you need four, five, maybe 10. But when it comes to SMB, you need hundreds of clients to be able to get to that point. And the approach that you can get on an enterprise to go and knock on every door to get to those handful of

Bridging the Gap: Adapting Enterprise Tactics for SMB

Amin Yazdani

06:23client does not work when it comes to SMB. So you need diversification because a lot of times things that happen is that some of those strategies work for a while and stop working, you need to come back to them and fix that and we had to deal with that a lot. If you don't diversify, you will not be able to succeed there. So I wanna jump on the outbound. I already mentioned that this is, outbound was

Outbound: The Most Underused SMB SaaS Tactic

Amin Yazdani

06:47the strategy that we adopted first without adapting to it and it didn't work.

06:56But we came back to it and we were looking at Alcon specifically. Why didn't it work for us? We are going, we are working with restaurants. Our ARPU at the time was around $4,000 per year. And what the literature was telling us is that if you don't have an ARPU of twenty five, fifty, better, a $100 a year, outbound doesn't work for you. Well, what was missing from that big headline was that there are assumptions in

07:26there. The assumption on the number of leads on an SDR can generate in an enterprise, which is around one or two per week. There are assumptions around how long it takes to close a deal in enterprise, which is between three to nine months on average. And those assumptions were not true for us, so there should have been a way for us to figure this out and this is what we did. We had to increase and adjust

07:48our ARPU and increase that ARPU and I will talk a little bit more about that a little bit later. We were able to increase that from $44,500 to 7,000, but then we figured out our time to close, our median time to close a deal from a demo to a closed deal is less than seven days. So that three to nine months does not apply to me. So I can change the formula in a way that can

08:14apply to me. So if I put that one week, two weeks average in that formula, then what I can do, I don't need 50 demo booked a week, but I need a seven to 9 demo booked a week from an STR. And the question was that, can I go and achieve that? So you can change the formula if you just go look at that and just don't take the headline. So that something about I'm gonna come

08:41to this. Outman is, in my view, the most underused enterprise tactic that almost any SMB SaaS business with about $5,000 in ARPU average yearly contract value should be able to use today. Today, Altman is producing 30% of our top line revenue every month.

Increasing ARPU from $4,500 to $7,000 Over 24 Months

Amin Yazdani

09:05Now let's jump into the tactics and the strategies. So Altman already spoiled it a little bit, so we're gonna go a little bit deeper on this side as well, But outbound is an important one. So increasing ARPU was a key for us to make it successful on outbound. The other thing that was key was channels. Again, looking at the literature of our enterprise SaaS outbound means cold email. But for us, email doesn't work. We are working

09:32with restaurant owners, they use email but they don't really open it. We tried a few different things. We tried Instagram and LinkedIn messaging. Instagram worked a little bit, LinkedIn, they're not on LinkedIn, so that didn't work at all. But we figured out actually what works for us right now today, what works for us on outbound is actually the old school cold calling. We pick up the phone, we call the restaurant and we don't call their mobile

10:01phone number, we call the actual restaurant which we can find the data and for our target customers, a lot of times you can find a manager or an owner at the restaurant. And if we can hone our messaging, we can get them on the call and we can book that demo. Right now we have an SDR team that consistently booking nine to 11 demos a week from cold calling. The other thing that we had to do,

10:27so we had to test test channels to figure out what is the actual channel that we we need to use to deploy that. The other thing was that you need to find the right team. If I bring an SDR from an enterprise SaaS company, they're not used to the high volume calling and booking. They will not be able to perform. So you need to find the right team that can do what you need from them to

10:51do really well. And that's the hard part of it, but I think it's important to just make sure you don't throw the baby with the bathwater and say it doesn't work. Sometimes it's just a team issue. The second one is, and this one is coming more from the B2C rather than enterprise, is search and social ads. In SMB selling, you need to think about who's the target customer and the target customers a lot of time is

Cold Calling as the Winning Outbound Channel

Amin Yazdani

11:21very similar to the B2C target customer. So our target customers, for example, for the restaurant side, they are on Instagram all the time. They are on Instagram promoting their business, they're not just just exploring, but they are on Instagram. And so if you want, you can start using both search and social ads and really capture them there. There are a couple of things that are key we figured out after a bunch of testing. Targeting is key,

11:51but you can do targeting really, really well right now. With the new AI tools that are out there, you can do targeting really well. You need to increase your ad budget slowly. You need to give the algorithm time to be able to find the right type of

12:10the right type of audience for you. You need to train it well. So pixels and like making sure that the algorithm knows what is an actual lead for you, not just the click through, super important. We had to learn that, we learned that the wrong, the hard way of really optimizing on something that doesn't convert. If you can tell the algorithm what actually converted, it can go and find you more of that. And we have been

Search and Social Ads: Meta vs Google for Restaurant Owners

Amin Yazdani

12:37able to do that successfully with with Meta at one third of the cost of our our Google Ads. And Google Ads comes with intent, Meta doesn't, but we can convert that much better now because it can find the right type of people for us. The other thing super important here and this is a mistake I see a lot of founders do because we don't have time to spend on ads all the time. We set and forget.

13:03This has been the biggest mistake that we've done early days. And you like the returns become diminished over time and it happens very fast. And then fourth one on this one is planning ahead. Right now, for example, for us, we gonna drop our ad budget in the next two and a half months significantly, why? Because meth are gonna be flooded with ads because of the election. The cost for ads on meth are gonna go through the

13:33roof and we don't wanna spend our money on high cost leads. But then we're gonna come back January after everybody have to spend their money and we're gonna double down on January. So you need to plan ahead with this and you cannot really get to the results immediately. And last thing is diversification. I already mentioned that more robust. I have a slide on this and tell you why, what has happened to us, but you need to

14:00reduce your reliance on any single channel. Otherwise you're not gonna be successful. We have had that problem on this one significantly. Let's talk about increasing ARPU. This is the This is what we did over twenty four months, increased our ARPU 54% from about 4,500 to 7,000. And there are couple of different small steps here and one big step. Smallest step was that once we figured out our ARPU is the blocker for outbound, what we did in

Price Increase: 30 to 40% Increase Drove 25% Revenue Growth

Amin Yazdani

14:32in instead of going horizontally and building for other markets, adjacent market, we went vertically, added more features, added more pieces to our software that will make it more valuable to the customer and if I can create more value for the customer, now I can charge more for that. So we created different tiers for our subscription and we're able to upgrade people through that and really increase our ARPU through that. The other thing, the big jump that

15:04you see in the middle is a price increase.

15:07I highly recommend that because I believe most of you right now are undercharging for your tool. Price increase seems scary and our price increase was significant, on average about 30 to 40%. The net result of that was 25% increase in revenue for us, but basically we lost customer. We lost customer, but we were better off after the price increase. And it also enabled the outbound strategy for us. The next one is about different channels. This is

15:39an actual text one of our sales people sent for signing up. Text messages work really, really well right now for our customer base. And again, this is another piece about testing different methods and mediums. And this is true not just for outbound, this is true probably for a lot of other channels that you can use and you can use it at different parts of your funnel, it doesn't have to be at the top of the funnel.

Text Messaging as a Sales Channel

Amin Yazdani

16:08And last piece that I wanted to share here is about not relying on one source. This is an email that we got in February. Google suspended our ad account for two weeks. We had to work with them and bring it back. They thought that we are doing something that we shouldn't be doing, we weren't. We got that back. But if it was a year earlier, my sales would have gone from a 100% to zero. When this

Diversification: Surviving Google Ad Account Suspension

Amin Yazdani

16:32happened, our leads counts for that two weeks period dropped 20%. Our sales team did not feel that at all because our outbound team were able to pick that up and that's the point diversification. You need that because things like this will happen. Election will happen every four years, sometimes more than that. So there are things that will happen to your strategy. If you're not diversified, you're not ready for that, you would not be able to survive

16:59past that.

Closing Summary and Q&A

Amin Yazdani

17:01So we are coming to an end couple minutes if there are questions, but over the last twenty minutes, what I showed you was we talked about the SMB SaaS landscape, why I'm so bullish about this space and why you should be as well. How you can adapt techniques from enterprise, but also from B2C when it comes to SMB selling. And of course the strategies that we shared about that you can use and implement for your growth

17:28today. Thank you so much for being here and listening to me. My name is again, Amin.

17:38LinkedIn is the only social media that I use right now. So if you want to connect with me on there and my email is there if there are any questions, but we do have two minutes if there are any questions.