Dan Martell - October 08, 2018


How to Define A Customer Avatar For Your B2B SaaS Company

Hosted by
Dan Martell
Mentioned
Jeff Bezos Edward Claire Ollie David
How To Build a Forecasting Process For Your SaaS Business How To Use Transformational Leadership to Inspire And Motivate Your Team

Episode Stats


Length

11 minutes

Words per minute

197.7

Word count

2,305

Sentence count

101

Harmful content

Misogyny

1

sentences flagged

Hate speech

3

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Choosing your perfect customer is probably the biggest decision you have to make as a founder and one of the things that I get to do with my new SaaS Academy clients is sit down and get clear on who they re serving as a customer base, ideally focusing on three primary buckets. But then here s the kicker and it always gives me angst is I ask them to choose the one customer that we re gonna focus on over the next 12 months that they feel if they made that investment it would allow them to hit their next level of growth. And some of my clients, I'm gonna teach you how we break down the criteria of what makes an incredible customer.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
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.