The Bow-Tie Model: Purpose-Built for SaaS Companies (Article 2 of 3)

Marketing Strategy — Thu., Mar. 30, 2023

The Bow Tie model is an alternative to the traditional marketing and sales funnel for SaaS and recurring revenue growth. It covers three gaps in the funnel: onboarding, adoption and expansion. The most common impact of a SaaS product is to lower cost or increase revenue. The new First Principle is that growth comes from helping customers achieve their desired impact, both rational and emotional, which is essential for recouping customer acquisition cost and achieving profitability. The Bow Tie model accounts for both the acquisition and expansion, unlike the traditional funnel.

Rational impact benefits the company first, and emotional impact benefits the individual first. Most humans make emotional decisions and seek to rationalize them with facts and figures. Companies should take this into account when marketing and selling, by offering emotional impact rather than rational.

The Bow Tie model accounts for the importance of emotional impact in recurring revenue growth. It helps explain decision-making and the First Principle of growth, and shows companies how to market and sell successfully. Next week, we'll explore how the SPICED framework shows that recurring revenue comes from recurring emotional impact.

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