How Leaders Are Breaking Through Stagnant Markets to Drive Profitable Growth 

Hey everyone, Matt Slonaker here. As a former colleague at SBI, I still keep tabs on the great work my former colleagues are doing. I recently reviewed their latest analysis, “How Leaders Achieve Profitable Growth in a Stagnant Market,” which dives into data from 300 public mid-market B2B companies across six sectors—business services, financial services, healthcare tech, media/telecom, SaaS, and technology. These are U.S. and Canadian firms with $100M to $5B in revenue.

The report paints a familiar picture: mid-market growth has been tough. Revenue stalled at 9% in FY24, with early FY25 projections (as of 1H) pointing to just 5%. GTM expenses exploded to $1.68 per dollar spent in 2020, fueled by inflation, wages, and overhiring. Macro pressures like interest rates, policy shifts, tariffs, and AI disruptions have kept CEOs cautious, prioritizing cost cuts over bold bets. The “Rule of” metric (revenue growth + EBITDA margin) dropped from 32 in FY21 to 20 in FY24, projected at 17 for FY25.

But fast-forward to mid-2025: fresh data from the National Center for the Middle Market shows things might be stabilizing better than expected. Year-over-year revenue growth hit 10.7% in Q2 2025, with 84% of middle-market firms reporting gains—though that’s down from 12.9% in Q2 2024. 19 Employment growth is at 7.3%, and while economic confidence is dipping (national index at 72), projections for 2026 revenue growth sit at 8.1%. 19 For SaaS specifically, Rule of 40 medians are around 12% in Q2 2025, signaling profitability focus amid slower growth. 10

The real story? Not everyone’s stuck. SBI identified “Rule of” Leaders—21% of companies (64 total) that beat medians in 3-year revenue CAGR (9.5%) and EBITDA (7.1%) from FY22-24. These leaders hit a “Rule of 31” in FY24 (12% growth + 19% margins) vs. the market’s 20, by sustaining GTM investments and executing smarter.

The Current Landscape: Profitability Gains, But Growth Pressures Persist

SBI’s data shows median revenue dipped from 10% in FY23 to 9% in FY24, with early FY25 at 5%. But mid-2025 actuals are holding stronger at 10.7% YoY. 19 The share of profitable growers rose to 53% in FY24 via cuts but was projected to slip to 45% in FY25. Smaller firms ($100M-$500M) slashed harder to protect margins, while larger ones waited out the storm.

GTM spend? Up 68% since 2020, with growth rates crashing from 30% in FY21 to 5% in FY24. As a revenue percentage, it’s declining 1% annually. Yet, revenue and GTM investment correlate strongly (r=0.77)—sustain spend, sustain growth, but efficiency matters.

With tariffs and costs cited as top challenges by 49% of execs, and only 63% expecting growth in 2026, 19 stagnation risks linger. But leaders show a path forward.

What Distinguishes “Rule of” Leaders?

These outperformers didn’t cut when others did. They grew GTM expenses 8% in FY24 (vs. 5% market), spending $1.91 per 2020 dollar and 15% of revenue (vs. 13%). EBITDA expanded modestly (18% to 19%) to fuel this.

Efficiency: Leaders get $6.54 revenue per GTM dollar (vs. $7.81 market) but 31% more growth per dollar ($0.71 vs. $0.54). They prioritize expansion (93% vs. 67% laggards), products (80% vs. 70%), retention (47% vs. 27%), and pricing (37% vs. 10%).

Laggards react: cost channels (80% vs. 20%), GTM redesigns (63% vs. 23%), leadership turnover (77% vs. 40%). This breeds chaos.

Four Core Strategies for Profitable Growth

SBI outlines four actions, validated by leaders:

1. Strategic AI for Market Decisions: Shift from cost pilots to AI spotting expansions. Leaders are 3x more likely to use AI for decisions. Remove biases, predict success, map whitespaces.
2. Pricing as Growth Lever: Ditch ad-hoc discounts for discipline. Control approvals, align increases to value, stratify by willingness-to-pay.
3. Unified Data Foundations: End dashboard fights with a single truth. Integrate for forecasting, attribution—leaders’ edge in growth yield.
4. Engineered Retention Systems: Assign ownership, target high-leverage moments. Focus on savable accounts, measure interventions.

Outlook for 2026: Adapt or Lag

Mid-2025 data suggests growth at 8.1% in 2026, 19 but with slowing expansion and cost pressures, stagnation could return. Leaders prove bold, efficient investments win. As I review this from outside SBI, it’s clear: audit your strategy now.

10 Actions for CEOs and CROs to Drive Growth in 2026

Drawing from SBI’s insights and mid-2025 data:

1. Audit AI Use: Move to strategic AI for expansions—analyze customer patterns for non-obvious opportunities.
2. Rank Market Entries: Use AI TAM analysis to prioritize targets by success odds, reallocating to gaps.
3. Set Pricing Governance: Tier discounts, document value to cut leakage and align with innovations.
4. Segment Pricing: Tailor by willingness-to-pay, using data to premium-price high-engagement accounts.
5. Integrate Data: Build one dashboard from CRM, marketing, ERP for real-time insights.
6. Predict Shifts: Model market changes and needs for proactive tweaks.
7. Own Retention: Assign CS accountability for renewals, with cross-function escalations.
8. Map Key Moments: Pinpoint 4-6 lifecycle points for targeted interventions, tracking impact.
9. Sustain GTM Spend: Aim for 8%+ expense growth, focusing on high-ROI like products.
10. Track Yield: Monitor growth per GTM dollar quarterly, benchmarking vs. leaders for efficiency.

Let’s chat if you want to dive deeper—I’m always up for growth talks. Make 2026 your year.