Dan Martell - How to Define A Customer Avatar For Your B2B SaaS Company

00:00:00.000 Hi there, I'm Dan Martell, serial entrepreneur, investor

00:00:02.340 and creator of SaaS Academy and in this video I'm gonna teach

00:00:05.380 you how to define your perfect customer for a B2B SaaS business

00:00:10.140 where you can get clear on who you're targeting and ensure

00:00:13.140 that they're excited to buy your product and be sure to stay

00:00:15.980 at the end.

00:00:16.980 We're gonna share with you my Rocket Demo Builder.

00:00:19.360 It's a strategy you can use in your product demos to get

00:00:22.460 customers to buy fast without giving you the cold shoulder.

00:00:30.000 Choosing your perfect customer is probably the number one

00:00:41.580 biggest decision you have to make as a founder and one of the

00:00:45.480 things that I get to do with my new SaaS Academy clients is sit

00:00:48.280 down, the first thing we do is sit down and get clear on who

00:00:51.860 they're serving as a customer base, ideally focusing on three

00:00:55.500 primary buckets but then here's the kicker and it always gives

00:00:58.360 some angst is I ask them to choose the one customer

00:01:01.600 that we're gonna focus on over the next 12 months

00:01:03.800 that they feel if they made that investment

00:01:05.960 it would allow them to hit their next level of growth.

00:01:08.940 And some of my clients, I'm gonna teach you

00:01:10.280 how we break down the criteria of what makes

00:01:12.980 an incredible customer but one of my clients

00:01:15.820 grew two and a half million in ARR in a six month period

00:01:19.240 by not trying to serve too many customers

00:01:21.380 but by focusing on on the one that they knew

00:01:24.460 could actually drive revenue and still have

00:01:26.720 the halo effect of other companies using their product

00:01:29.820 but in regards to driving marketing, sales

00:01:32.000 and content creation, we need to pick the one.

00:01:34.500 So in this video, I'm gonna share with you guys

00:01:36.300 the six criterias that I use and you should use

00:01:40.500 in defining a great customer avatar.

00:01:43.140 Number one, firmographics.

00:01:45.280 This is deciding what industry you actually wanna serve.

00:01:48.980 Now some of you guys are saying, well a vertical

00:01:51.540 or an industry is not big enough for me to succeed.

00:01:54.520 Just take one step back.

00:01:56.040 Think about how hard it is for me to sell to a law office

00:01:59.380 and to a fitness studio.

00:02:01.540 Both of those have different ways

00:02:03.520 that they talk about their customers.

00:02:05.240 One might call them athletes or dancers.

00:02:07.360 The other one's gonna call them clients.

00:02:08.920 They have different structure for compensation

00:02:11.280 how they make decisions.

00:02:12.380 Obviously, law firms have partners.

00:02:14.060 A gym owner might just be a solopreneur.

00:02:16.060 They're totally different, yet I see constantly,

00:02:18.420 every day, companies trying to serve both markets.

00:02:20.960 So if you want to dial this in,

00:02:23.100 figure out from a revenue point of view,

00:02:25.040 What's the revenue band that you wanna serve

00:02:26.780 within that vertical?

00:02:27.940 My favorite question to ask is what percent growth

00:02:31.140 would you assume those companies are growing every year

00:02:34.540 that you would want as a customer?

00:02:35.720 Because do you want a company that's failing,

00:02:37.880 that's struggling, that's been declining

00:02:39.580 over the last five years, or do you want one

00:02:41.160 that's been growing 20, 30, 40% year over year?

00:02:44.220 Those are the number one.

00:02:45.460 It's the firm of graphics, you gotta get clear on that.

00:02:47.820 Number two is the demographics.

00:02:49.560 If you think about it, you wanna concentrate

00:02:52.240 your focus on a region.

00:02:54.240 This is called the trading zone.

00:02:56.080 When you're going to market,

00:02:57.480 if you're selling e-commerce software

00:03:00.120 to the luxury brand market,

00:03:03.740 you could probably crush it with two cities,

00:03:06.920 New York and LA.

00:03:08.580 Yet, many times when I ask companies who, you know,

00:03:11.060 where do your customers buy from,

00:03:12.800 they'll go Canada, US, Australia, and the UK.

00:03:16.760 And I always challenge them,

00:03:18.140 if you could pick one over the next 12 months,

00:03:20.800 one country, which would it be?

00:03:23.060 US, perfect.

00:03:24.720 It's gonna hurt but if we went even further we pick cities.

00:03:28.400 Which top cities would those be if I gave you five?

00:03:30.640 They know exactly, they name them off.

00:03:32.600 Could you hit your goals in the next 12 months

00:03:35.040 focusing on those five?

00:03:35.940 Look, you'll still have the halo effect.

00:03:37.480 You'll still be able to serve people outside of that.

00:03:39.480 I'm not saying geo-fence your website.

00:03:41.680 I'm just saying let's focus.

00:03:43.140 Content, paid advertising, marketing, partners,

00:03:46.080 customers in those cities, could we do that?

00:03:48.280 Because think about it, when you're serving

00:03:51.220 two or three of the similar companies in the same city

00:03:54.520 that maybe that founder knows about,

00:03:55.760 and those people are case studies on your website,

00:03:57.860 the ability for you to close that customer

00:03:59.660 against your competitor is like three or four X,

00:04:02.340 and that's the power of focusing on the right demographic.

00:04:05.500 Number three, technographics.

00:04:07.540 This is probably the most interesting and fun

00:04:10.900 and advanced targeting that you can really add

00:04:15.120 to your customer avatar.

00:04:16.180 So one question I love to ask my customers is,

00:04:18.680 what are other tools or services

00:04:20.220 that your best customers buy?

00:04:22.120 What are things that your top customers probably also use

00:04:26.260 in regards to products, tool sets, et cetera?

00:04:28.320 If they bought your product, is there anything else

00:04:30.260 that they would likely buy right after they buy you?

00:04:32.440 In answering that question, you get very clear

00:04:35.700 on the tool set that those companies use.

00:04:38.840 And the reason why that's so powerful is from

00:04:40.540 a qualifying point of view is you can actually find out

00:04:43.720 and target those companies.

00:04:44.880 So there's two ways to do this.

00:04:47.180 One is to actually look at the tool sets

00:04:49.920 that are being used on the public marketing website.

00:04:52.360 So you can get understanding of their analytics tools,

00:04:54.820 of their recruiting tools.

00:04:56.560 You can get a lot of data just by looking at how they build

00:04:59.960 and the tools that they've plugged into

00:05:01.500 their public marketing sites.

00:05:02.760 And there's a bunch of companies online

00:05:04.740 that'll help you do that.

00:05:05.900 The second is, there's actually ways that you can look

00:05:08.740 at the job postings for those companies

00:05:12.300 and see what kind of technology that they require

00:05:15.520 in different roles within the organization

00:05:17.440 for experience levels from the new hires.

00:05:20.440 So you can defer by, well, if they're looking to hire

00:05:22.440 a VP of marketing and in there they say,

00:05:24.240 well, you have to have experience with Salesforce

00:05:26.820 and HubSpot and, you know, Google AdWords.

00:05:29.680 Like, you can start to defer the types of technologies

00:05:33.160 that they're using, or decipher, sorry,

00:05:35.320 that they're using so that you can get clear on,

00:05:37.960 hey, these are my perfect customers

00:05:39.600 and these are the links to the different websites.

00:05:41.700 How do I, and again, there's data providers

00:05:43.660 that'll give you that information to make that super clear.

00:05:46.640 So technographics to me is a very new thing that's kind of

00:05:50.040 come online with the power of the internet that a lot of

00:05:52.820 founders are not using in their SaaS businesses.

00:05:55.340 Number four, psychographics.

00:05:57.080 So it sounds kind of crazy because it's got the word

00:05:59.180 psycho in it but just think about it this way is there's

00:06:02.060 probably a certain attitude, if you think you're best

00:06:05.820 customers, there's an attitude that they have in regards to

00:06:08.960 the way they communicate, the way they ask for information,

00:06:12.260 the way they talk to your team.

00:06:14.000 It's crazy how I can tell when I get on a call with a founder

00:06:18.280 just based on the flow of the conversation

00:06:21.000 if there's somebody that I would love to coach.

00:06:22.780 And I can know that within the first three minutes.

00:06:25.080 That's a byproduct of the psychographic makeup 0.79

00:06:27.880 of that person or that organization.

00:06:30.040 So just think about it this way.

00:06:31.720 You have values in life that you live by.

00:06:33.880 You may not know that but you do.

00:06:35.260 They drive you.

00:06:36.220 Your customers have similar values.

00:06:37.920 When you work or accept a new customer in your business

00:06:41.300 especially if you're more of a mid-market sale

00:06:43.860 and you've got a customer success team that's got to work

00:06:45.660 with these clients, you will frustrate your team if you bring

00:06:50.740 on the wrong customer.

00:06:51.740 So one of the things that I highly recommend is getting

00:06:53.900 clear on what types of psychographics or values the

00:06:57.600 companies, the best customers that you'd love to serve would

00:06:59.980 have, just think about it this way.

00:07:01.640 Early adopters have a certain approach to life.

00:07:04.120 If you try to sell technology to a laggard, 1.00

00:07:07.180 you are going to be fighting an uphill battle.

00:07:08.880 It'll be like swimming upstream.

00:07:10.480 Yet, if you could filter out based on some questions of their

00:07:13.860 approach to innovation and technology,

00:07:16.160 then you can know right from the beginning,

00:07:18.040 your SDRs, your sales development reps,

00:07:19.660 the way they qualify the customer,

00:07:21.440 that your sales people would never talk to somebody

00:07:23.540 that isn't an early adopter.

00:07:24.440 Because if you have innovation that's truly like

00:07:26.800 AI for the restaurant industry,

00:07:28.740 you can't be talking to the late adopters or the laggards 0.98

00:07:32.120 because they'll just frustrate your sales team,

00:07:33.680 even if you're successful at getting them

00:07:36.140 into your sales pipeline.

00:07:37.520 So to me, psychographics is a huge opportunity

00:07:40.320 for you to just align on values between the way

00:07:42.480 your company wants to operate or who they can serve

00:07:44.580 and the customer's default values.

00:07:46.720 Number five, roles.

00:07:48.580 If you sell mid-market to enterprise,

00:07:50.680 there's a very good chance you have multiple people

00:07:53.200 in your organization to you sell to

00:07:55.120 or the CEO or the founder or the owner is not the buyer.

00:07:58.860 So I call this a multi-threaded account

00:08:01.140 where you have to go in and identify your champion

00:08:03.440 and figure out who the purchasing decision

00:08:05.500 or who's got the budget approval

00:08:07.340 and really define those roles.

00:08:09.080 So when you're sitting down, you're creating

00:08:10.440 that customer avatar, if you serve those types of markets,

00:08:13.480 you might have two or three folks that you would need to

00:08:16.240 build relationships with from a sales point of view to actually

00:08:19.580 get a deal closed.

00:08:20.380 So be sure you sit down, you get clear on the roles,

00:08:23.420 the titles, maybe use some LinkedIn to do the triangulation

00:08:26.520 and research and also understand what kind of background are

00:08:29.760 things that drive them in their career.

00:08:31.560 The fears and frustrations of their roles in the business and

00:08:34.840 make sure you speak to those individually when you're having

00:08:37.240 that sales conversation but it needs to be clear when you're

00:08:39.960 defining your customer avatar.

00:08:41.720 Number six, give them a name.

00:08:44.100 So many great companies like HubSpot and Slack and Dropbox

00:08:48.640 and many, they're very deliberate and clear on what

00:08:51.600 their customers are called in for different segments.

00:08:53.940 So Marketing Mary is one you know, you probably have heard

00:08:56.780 for HubSpot.

00:08:58.180 Jeff Bezos from Amazon is famous for creating an extra,

00:09:01.820 I think, a chair that's open in a meeting room to represent

00:09:06.320 the customer that they're serving, right?

00:09:08.060 So just like this symbol of the customer's voice

00:09:11.360 in all meetings.

00:09:12.560 The reason I, and I do this with all my coaching clients,

00:09:14.740 is we give them a name so that all the strategies,

00:09:17.560 when we talk about marketing and sales and customer success,

00:09:20.700 we always can refer back to, how does this buyer,

00:09:23.840 and I've had names so funny.

00:09:25.620 Everything from Edward to Ollie to Eddie to Vanessa to Claire,

00:09:29.880 you name it, my customers have called it.

00:09:31.920 For me, it's Software Scaling Sam.

00:09:33.780 You, behind the camera right now,

00:09:35.520 if you have a software business that's doing 10K plus

00:09:37.920 per month, you're software scaling Sam and the reason why

00:09:41.160 is that that way the whole team can talk about it.

00:09:43.460 For me, it's like, oh, is this video gonna serve Sam?

00:09:46.260 It's like, yes, these are the types of challenges

00:09:48.400 that he's running into, the questions he's asking.

00:09:50.460 So let's do some content around that.

00:09:51.800 So I think it's really important that you take

00:09:54.400 the characteristics of your best customer,

00:09:57.280 your target avatar, and you actually give them a name.

00:09:59.600 It's a label and you put it on.

00:10:01.040 I even had one of my coaching clients, David out of Philly,

00:10:04.140 He showed me in his office he had a printout poster

00:10:08.480 of his perfect customer and what was great is he went

00:10:11.640 to the next step, he put the opposite, the PETA customer,

00:10:14.860 the pain in the butt customer next to it so he could remind 0.58

00:10:18.280 everybody when they're in the conference room talking

00:10:20.060 about anything, we serve this person, not this person.

00:10:23.160 So that, when we talk about values, is a huge representation

00:10:27.160 of how that could show up as an artifact in your startup.

00:10:30.400 So quick recap, number one, firmographics.

00:10:33.300 Two, demographics.

00:10:35.160 Three, technographics.

00:10:37.400 Four, psychographics.

00:10:39.240 Five, define the roles.

00:10:41.300 And six, give them a name.

00:10:44.340 So as I mentioned at the beginning of this video,

00:10:45.880 I want to share with you my Rocket Demo Builder.

00:10:48.720 Essentially, it's these five core principles

00:10:51.060 that I use when I'm coaching my clients

00:10:52.860 to close demos, product demos faster.

00:10:55.320 So it's a demo, not a tour.

00:10:56.620 That's number one.

00:10:57.960 And also talk about how to use the virtual close

00:11:00.820 to get customers to pre-sell in their mind using your product

00:11:04.960 within their organization.

00:11:06.320 You can click the link below to get your copy.

00:11:08.300 It's super powerful.

00:11:10.200 One of my clients actually just told me they close a Fortune 100

00:11:13.300 company to a 100K deal using the demo process their first time

00:11:17.300 so they're pretty pumped and excited.

00:11:18.800 So click the link below and get your copy and I also want to ask

00:11:23.280 you if you love this video as much as I love creating it,

00:11:25.920 click the like button, share it with somebody you care about

00:11:28.680 and leave a comment below and let me know

00:11:30.480 what part were you missing in identifying

00:11:32.980 your customer avatar.

00:11:34.560 As per usual, I want to challenge you to live a bigger life

00:11:37.060 and a bigger business and I'll see you next Monday.

Dan Martell - October 08, 2018

How to Define A Customer Avatar For Your B2B SaaS Company

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