Hate Planning? The A.R.E. Planning Framework for SaaS Companies is for you.

By Anna Talerico

Apr 23 2019

I love plans: whether they’re formal and detailed or quickly scribbled on a napkin during a moment of inspiration. However, I know my love of planning puts me in the minority. Let’s be honest, most companies and managers say they plan….but it’s one of those things that doesn’t actually happen regularly and is usually ineffective.

Plans get made and then put on the shelf to collect dust. Plans are formulated that are ridiculously too detailed and don’t leave room for change, agility, and learning. Plans are created that are nothing more than a list of goals with no actual steps to attain the goals.

Planning is flawed, and often sporadic and ineffective.

To build, and sustain, a culture of planning AND execution you need a simple way to go about it that is low-maintenance and easy for all types of planning styles.

Here’s a super simple framework for laying out quarterly plans. To create this go-to guide, I got down to the most important health metrics for my Software-as-a-Service (SaaS) company with a list of fill-in-the-blank statements. They are so drop-dead simple they will work for any type of business, not just a SaaS.

Just focus on the fundamentals: Acquisition. Retention. Expansion.

A.R.E has substantial legs outside of the planning process itself and can extend to the day-to-day running of the company. Everything you are considering doing can be passed through this lens.

Your A.R.E plan can be done on a monthly, quarterly or annual basis (although, if you do it annually, it should be updated quarterly and monthly — not left to gather dust on a shelf!).

My recommendation is to have annual A.R.E. goals and a plan that gets updated quarterly and reviewed monthly. But there’s an easy way to get started. Here are a few bullet points for getting your A.R.E. act together.

Acquisition Goal

Of course, one of the biggest priorities for any business is finding new customers, but for SaaS companies, it’s absolutely critical. In fact, according to a study by McKinsey, even if a software company grows 20% per year, it still has a 92% chance of folding. Those stats are pretty sobering, which is probably why 89% of SaaS businesses report new customer acquisition as their top priority.

Planning your approach to new customer acquisition doesn’t have to be a pages long process. Setting a course of action for acquisition can be as simple as filling in the blanks to the following two statements:

  • Here’s how we are going to acquire more customers
    • List the key initiatives to execute to reach the acquisition goal (about 3-5 per quarter)

Retention Goal

And while acquiring new customers is paramount to keeping a SaaS company afloat, keeping customers is also crucial. Retaining customers just makes financial sense. According to For Entrepreneurs, it’s actually nine times cheaper for SaaS companies to retain customers than to acquire new ones. Stats like this make it clear that plans for retention should be just as well-laid as plans for acquisition.

Sometimes the best-laid plans are the simplest. Every great retention plan comes back to these key ideas. Finish these sentences, and you’re well on your way:

  • Here’s how we are going to retain more customers
    • List the key initiatives to execute to reach the retention goal (about 3-5 per quarter)

Expansion Goal

But any SaaS company worth its salt doesn’t just want to stay afloat; growth should be a priority as well. While the cost of acquiring new customers can be substantial, working on improving and expanding relationships with existing customers might just save money in the long run. The same study by For Entrepreneurs found that it’s four times cheaper to upsell existing customers than it is to attract new ones. The average SaaS company spent just thirteen cents acquiring an additional dollar of revenue from existing customer, while they spent over a dollar courting each new customer.

Finish these statements to help prepare for not just a surviving SaaS, but a thriving one:

  • Here’s how we are going to expand more into our customer accounts:
    • List the key initiatives to execute to reach the expansion goal

This plan format is simple and focused. It worked for all of my department leaders too—whether they were great planners or last-minute-rushed planners. Everyone understood it and knew how to go about using the A.R.E. planning framework. It’s focused, simple and rooted in agility.

It’s also easy to come back to at the end of a month or quarter to see what actually got accomplished against the plan. You can close the loop, if you are into documenting things, like this:

  • Here’s how we are going to expand more into our customer accounts:
    • List the key initiatives to execute to reach the expansion goal
      • Note if the initiative was executed (and if not, why not), and the outcome

That’s it! And that’s why I love using the A.R.E. Planning Framework for SaaS companies. It’s specifically applicable to marketing, sales and customer success, but can cross the lines into other teams as well.

It bears repeating: How you plan doesn’t matter. All that matters is that you actually execute. No plan in the world will help you achieve your goals if you don’t then go make it happen. A simple plan can help keep the focus on the most important goals and the key initiatives to execute.

Content by Beacon9 SaaS Business Advisory

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