Turning Around a Declining SaaS Market: Restoring Profitability in Brazil Ahead of a Product Relaunch
Two core sub-markets had fallen by around two thirds year on year, and the product itself was being rebuilt. The task was to stop the losses and protect market share until the new product was ready.
At a glance
- Client
- SaaS subscription business
- Market
- Brazil
- Starting point
- Loss-making, with the product being rebuilt
- Decline
- Two main sub-markets down 66.1% and 65.8% year on year
- Advertising spend
- £204k a year
- My role
- Head of Commercial
- Timeframe
- Three months
A declining market with no new product to sell
The Brazilian market had previously performed well, but by 2023 its sales and marketing activity had become cumbersome and was operating at negative ROI. Between 2022 and 2023, its two main revenue-generating sub-markets fell by 66.1% and 65.8% respectively, and the market as a whole was making a loss.
The root cause sat with the product: it was no longer competitive and was being rebuilt. That narrowed the options considerably. Marketing could not solve a product problem, and a major campaign behind a product due to be replaced would have compounded the losses.
The objective was therefore defensive rather than expansive: protect market share and return the market to positive ROI, so that it could rebuild from a sound base once the new product launched.
Activity that had outlived its returns
Assessing spend against the revenue it generated revealed the scale of the inefficiency. Of £204k in annual advertising, £156k, more than three quarters, was producing negative ROI. Approaches that had once been effective had continued long after their returns had faded.
The cost base had not adjusted to the market either. Customer service was resourced for a larger customer base than the market now supported, while the two most important sub-markets had little activity designed to retain existing customers or reach new ones.
The problem was not a lack of investment, but its allocation. Resource was concentrated where it no longer produced a return, and absent where it could.
Cut what was not working, concentrate on what could
Three interventions ran in parallel, each designed to improve return on the resource already in the market rather than to add more.
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Stopping negative-ROI spend
I ended the £156k of advertising that was losing money. The remaining budget was redirected at specific customer groups identified as having high lifetime value potential, using ads to secure their first purchase and positioning paid media as the entry point to the sales pipeline.
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Rebuilding reach in the core sub-markets
I launched search engine optimisation, content and a communications plan for the two main declining sub-markets, refining customer communications as performance data came in.
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Right-sizing the cost base
Customer service was reduced by two agents while maintaining customer response times, aligning operating costs with the market's current scale.
What I chose not to do
I did not try to buy growth through volume or a broad brand campaign. With a product due to be replaced, the priority was to protect margin and the customer base, not to fund growth the current product could not sustain.
A leaner market, with revenue growing again
Revenue responded quickly. Within a month of the revised search and communications activity going live, revenue rose by 10.3%, followed by a further 15.1% the next month. The retained advertising budget moved into positive ROI, acquiring first purchases from high-lifetime-value customers.
The engagement also left the market with:
- a sales pipeline operating at positive ROI
- a clearer understanding of its customers, and communications built around it
- a stable, profitable base from which to rebuild after the new product launched
Positioned to rebuild, not relaunch from a loss
With costs aligned to the market and revenue growing again, the business could approach the new product launch from a position of stability, building on an established customer base rather than recovering from a loss-making one.
If a market is costing you more than it returns, I would welcome a conversation.
Whether you are facing a single commercial blocker or need someone to lead the strategy, we can start with a call.