The Percentage Trap: Growth's Silent Killer

You are the founder of a B2B SaaS with ambitious plans for growth.

Which scenario do you prefer? The one where your Lead -> MQL -> and MQL-> Customer ratios are 50% or the one where the same ratios are 10% or less?

Easy answer, right? Who in their right mind would prefer the second scenario?

Wrong. The right answer is that it's not about the % - it's about the absolute number of MQLs and Customers coming from each and ultimately the Cost/MQL, CAC and LTV (and payback) that appears in each scenario.

Some questions are best answered with absolute numbers, whereas some are best suited for relative numbers. It's a skill you need to develop in business (and life – they are intertwined).

Here’s an example from my experience: 

One of the silent growth killers in B2B SaaS when deploying a Self-Serve Motion is focusing on percentages instead of absolutes.

How it plays out: introducing Self-Serve and the inevitable pushback

It's a tale as old as time. The business started with a sales-led motion, Sales would get few inbound leads and/or outbound to a targeted audience. The inbound leads to book a demo were few because of low marketing spend and were typically further down the awareness matrix. The outbound leads were already qualified from the prospecting stage, so every lead hitting the CRM was also an SQL.

And now you just introduced the Self-Serve (or PLG) Motion, letting website visitors sign up to your product on their own and you turn on Performance Marketing.

Suddenly, the floodgates are open. The volume of applications is going up, and businesses that don't fit your ICP are applying to join. The ones that do join and transact are much lower ACV than before. You do get some good customers, but they are very few compared to the small ones and the unfit ones.

The pushback is coming from everywhere. The operational teams start dismissing the marketing activity as noisy / dilutive. The average metrics for customer value go down, a notification for a new inbound lead starts looking less and less exciting, and people start whispering "marketing is targeting the wrong customers".

You are growing fast in terms of customer acquisition, but not as fast in terms of revenue, because you attract smaller customers. You are still growing though – faster than you did before, but everyone apart from the Growth team agrees that you need to kill the Self-Serve motion.

You cave in – you don't want to reduce your average ACV, plus everyone in your team thinks it's a wise idea. Growth stalls, and a competitor who is spending a lot and acquiring customers through Self-Serve eats up your market share.

Where did you go wrong?

You tried to answer a question that was about absolute numbers with percentages.

You were getting more high value customers than you did before Self-Serve, but the fact that you were getting even more low value customers / unfits pushed that fact to the background.

The reality is that you can't have the high value customers without the small customers. You can’t get MQLs without unqualified leads. You expanded your reach so you will attract both small and large customers, and given that there are a lot more small businesses than large businesses, you are bound to have a higher volume of them.

It doesn't matter if the majority of your new customers are small – what matters is whether the unit economics work across your entire customer base. This means looking at how the few large customers boost your cohorts' LTV, ensuring your payback period falls within your target range, and understanding that your marketing costs are already spent – you're not paying extra to onboard smaller customers. If these factors align, you have a successful acquisition mix, regardless of the ratio of small to large customers.

Growth And Operations: Where the pushback becomes valid

Now, let's address something crucial: There's a valid concern about the influx of leads and customers being a strain to the business. That's a very real issue and one that should impact whether you invest heavily in marketing or not.

A lot of times it’s a case of needing to expand your operational capabilities and/or changing your operations in a way that can support the next level of growth. The operational part is intertwined with Growth, and there needs to be alignment in terms of whether shifting gears in Growth is actually absorbable.

What this pushback doesn’t mean at all is the ludicrous notion that you can adjust your marketing in a way that only attracts large customers - forget about that. It's not how marketing works, and it's not how you should approach growth.

An Absolute Statement to Take Away

If you want an absolute statement to take away: Swear off single metrics for anything other than your North Star. It's very rare that one metric can tell you the whole story – every measurement needs a tentpole measurement.

Tentpole Measurements - I’m fascinated by this concept. Add it in your day-to-day and thank me later. It’s the idea that you can easily impact a single metric, if you let another metric suffer. In the case described in this article, you can drastically improve your Lead to MQL % just by spending less and having less leads. The tentpole measurement in this case would be lead volume - meaning that a positive shift in the Lead to MQL ratio is only valuable if the lead volume is on the same levels.

One last note about Self-Serve

It's important to note that your approach doesn't have to be strictly Self-Serve OR Sales-led. Implementing what I call "Self-Serve with Sales-Assist" is often the best of both worlds. This hybrid model allows you to capture the volume benefits of Self-Serve while still providing high-touch support where it matters most, maximizing both growth and efficiency. But that’s a topic for another article.

Don't fall into the percentage trap. Embrace the volume, understand the unit economics, and watch your B2B SaaS thrive.