Dan Martell - How to Go Up Market With Your SaaS

00:00:00.000 Hey there, Dan Martell here,

00:00:01.100 serial entrepreneur, investor, and creator of SaaS Academy.

00:00:03.420 In this episode, I'm gonna share with you

00:00:04.760 how to move up market.

00:00:06.720 If you're trying to move up market

00:00:08.460 in your software business or any business really,

00:00:11.000 but to do it without falling on your face

00:00:12.760 because it sounds like a good idea

00:00:14.360 until you realize there's key things that you're missing,

00:00:16.420 be sure to stay to the end

00:00:17.940 where we tell you how to get access

00:00:18.900 to my game tape reviewer worksheet.

00:00:21.680 This is where we listen to sales calls

00:00:23.720 with upmarket customers

00:00:25.600 and understand the key learnings and takeaways

00:00:27.420 that we should be using to guide our decisions.

00:00:30.800 Let's get into it.

00:00:43.960 So I have the extreme privilege of coaching

00:00:47.280 some of the most ambitious, driven, kind entrepreneurs

00:00:51.700 out there in the B2B software space.

00:00:54.100 folks like ClickFunnels and Proposify and carrot.com

00:00:58.800 and just literally dozens of others.

00:01:02.500 And one of the things that comes up very often

00:01:05.200 is their want or need to move up market

00:01:09.040 to increase what's called their account,

00:01:10.660 their average contract value, ACV.

00:01:14.200 Now, what I've seen doing this in my own companies,

00:01:17.500 I've built, you know, I've been building companies

00:01:19.280 for 20 years now, multiple seven figure businesses.

00:01:22.760 I've realized there's so much more to consider

00:01:24.760 than just having what typically is a customer comes in,

00:01:27.880 they're upmarket, they're more enterprise,

00:01:29.360 they're more mid-market, whatever it is,

00:01:30.960 and they pull you up into that market

00:01:32.900 and you just like say yes and you wanna do it

00:01:35.420 and you don't take into consideration

00:01:37.580 the impact it's gonna have in your go-to-market

00:01:39.920 in regards to your marketing and your sales process,

00:01:42.260 your sales motion, or even into the product side of things,

00:01:45.740 the demands and features and needs from a,

00:01:47.900 you know, even getting deals done with compliance

00:01:50.260 and securities and financials and all these things

00:01:52.860 and key features, integration.

00:01:55.060 So what I wanna share with you is the lessons learned

00:01:57.800 of coaching dozens of founders

00:01:59.360 into moving up market successfully

00:02:01.840 because what typically happens

00:02:04.300 is somebody raises a ton of money,

00:02:06.100 they tell the investors,

00:02:07.000 I'm gonna go and scale this business up

00:02:08.600 and then they fall flat.

00:02:10.160 You know, they hire seven salespeople

00:02:11.720 and then six months later, they gotta fire everybody.

00:02:14.080 So I actually talked to my friend, Mark Roberge.

00:02:16.300 He wrote a great book called

00:02:17.360 The Sales Acceleration Formula

00:02:19.120 and what we talked about is his process that he used

00:02:22.780 that really inspired the conversation

00:02:24.380 we'll be having with you today

00:02:26.060 to assess different key metrics,

00:02:28.800 the strategy to moving up market

00:02:30.380 and really understanding the map we need to be following

00:02:33.060 so that we can be successful.

00:02:34.980 Let's get into it.

00:02:36.080 Number one, GTM metrics, the go-to market metrics.

00:02:40.000 So the way I think about it is regardless

00:02:42.700 where you're at in your business,

00:02:43.660 if you look at a segment of customers,

00:02:45.720 let's just call it inbound and mid-market customers

00:02:48.500 or inbound and SMB, small, medium businesses.

00:02:51.220 We wanna look at three key factors.

00:02:53.860 Number one, annual reoccurring revenue,

00:02:55.800 the percentage of the total revenue

00:02:57.940 for that customer segment.

00:02:59.620 Number two, we wanna look at the CAC payback period,

00:03:02.660 the cost acquired customer payback period,

00:03:04.380 meaning how many months does it take you

00:03:06.340 to pay back that new acquired customer

00:03:09.380 in regards to their revenue if it's on a monthly basis?

00:03:12.860 How many months does it take to pay back?

00:03:15.200 And then also the percent of logo churn.

00:03:18.100 Logo churn means the account itself churns,

00:03:20.760 means they cancel.

00:03:22.320 If you don't have a significant amount of ARR in a category,

00:03:28.560 and your CAC payback period is way too long, right?

00:03:31.800 Because you haven't figured out the go to market,

00:03:33.560 and you have high logo churn for that segment,

00:03:37.140 then there's an area of improvement.

00:03:39.500 Because I think people talk about

00:03:40.980 product market fit all the time.

00:03:42.560 What they don't talk about is go to market fit.

00:03:45.220 And this strategy in our conversation today

00:03:47.420 is gonna help you understand if you have go-to-market fit.

00:03:50.480 So for each segment, you need to understand

00:03:53.320 the percent of annual reoccurring revenue for that segment

00:03:56.560 and your total business, the CAC payback period,

00:03:59.860 and the percent logo churn.

00:04:01.500 If you don't have that, then don't even move up,

00:04:03.960 like go baseline those numbers and then come back.

00:04:06.600 Number two, segment the map.

00:04:09.000 So the way to think about it,

00:04:10.200 it's a three by three matrix, right?

00:04:11.920 So a grid, and on one side you have at the top inbound,

00:04:15.580 in the centre, outbound, at the bottom, partners.

00:04:18.680 And then across there, you have small, medium and large.

00:04:21.460 So you think about kind of the go-to-market strategy.

00:04:24.060 So are you doing an outbound strategy,

00:04:25.460 an inbound strategy or a partnership strategy?

00:04:27.000 Those are kind of the big three.

00:04:28.200 And then do you sell to small business,

00:04:31.000 medium size or enterprise?

00:04:33.220 And then what you wanna do is essentially get the numbers

00:04:35.860 that I just mentioned, your go-to-market metrics,

00:04:37.760 your ARR, your CAC payback period and your percent,

00:04:40.680 logo churn, and put those into that map

00:04:43.600 so that you can visually see how those things stack up.

00:04:48.140 And then what you wanna do

00:04:49.360 is you want to communicate to the rest of the team

00:04:52.820 that these are the segments that we're focused on, okay?

00:04:55.500 Red means like we're not doing partners

00:04:57.680 and we're not doing SMB, right?

00:04:58.920 You might say red for the whole stack of SMB

00:05:00.920 because maybe you don't sell the SMB.

00:05:02.540 But it's just a really clear communication tool

00:05:05.340 to let everybody on the team know

00:05:07.160 like these things are check marks, they're good, right?

00:05:10.580 These things are yellow, we're exploring them,

00:05:12.920 we're seeing if we can make them better.

00:05:14.100 Let's say inbound enterprise.

00:05:15.860 Maybe we don't have a good inbound enterprise strategy,

00:05:18.120 which typically happens when you're moving

00:05:19.540 from SMB to mid-market.

00:05:21.300 You've got a great content funnel,

00:05:23.920 product-led growth strategy for SMB,

00:05:25.920 but it doesn't work for a mid-market customer.

00:05:27.860 So you might need to invest in that.

00:05:29.640 So that's yellow.

00:05:30.660 And you might say, look,

00:05:31.880 we're not doing enterprise right now.

00:05:33.440 Enterprise, we're keeping it off.

00:05:34.740 So if any big customers come in,

00:05:36.140 they can use our product set the way it is,

00:05:38.980 but we're not committing to any feature change, et cetera,

00:05:41.180 cause it's gonna dilute our focus and ability to succeed.

00:05:44.360 So we want to segment the map around those three accesses.

00:05:48.660 Again, inbound, outbound partners,

00:05:50.840 small, medium, and large, those three metrics.

00:05:53.040 How are you doing for each one of those squares on the grid

00:05:57.220 to let you know how to communicate that to your team.

00:05:59.920 Number three, triple review.

00:06:02.020 One of the most powerful strategies you can

00:06:04.900 to learn from a customer is to listen to the game tape.

00:06:09.440 If you're a professional athlete, you know,

00:06:11.660 it doesn't matter who you are,

00:06:12.460 you are definitely listening or listening,

00:06:14.480 watching your plays, you know, on the field of play,

00:06:17.140 you're watching the tape, you're watching how you perform,

00:06:19.120 you're watching how the team you're competing against perform

00:06:21.480 and you're looking for opportunities to learn.

00:06:23.360 And to me, working backwards from the customers

00:06:26.300 is no different.

00:06:27.140 So here's how it works.

00:06:28.220 I want you to, you know, talk to one of your sales reps

00:06:31.320 and say, hey, pull a call from a customer

00:06:33.120 that was maybe mid-market that came through

00:06:35.760 a partner channel.

00:06:37.680 And then what you do is you sit down with that sales rep

00:06:40.200 prior to coming in, you ask them to prep.

00:06:41.820 I want you to come up with like two to three things

00:06:43.880 that you felt you did good on that call,

00:06:45.500 two to three things that weren't so good, right?

00:06:47.500 So they come ready and prepared.

00:06:50.040 They present that to the team on the game tape review.

00:06:53.200 And you might do this every, you know,

00:06:54.660 if you're trying to iterate fast product market fit,

00:06:56.500 go to market fit, you might do it every day.

00:06:58.360 You might do it every other day or at least once a week.

00:07:00.600 And you wanna sit down with the product lead,

00:07:02.440 the marketing lead and the sales lead.

00:07:04.720 And you want each one of them to listen to the call

00:07:07.820 and come up with some suggestions or ideas

00:07:10.640 to improve the conversation.

00:07:12.380 And these are, that's why I call it a triple review.

00:07:14.480 You've got those three people in there

00:07:16.280 and they're providing key feedback.

00:07:19.080 As I mentioned, I'm gonna share with you a worksheet

00:07:20.500 on how to do this.

00:07:22.140 Key feedback that you can use to improve that conversation

00:07:25.920 if you're focusing on that specific segment

00:07:28.340 and go to market to iterate around it.

00:07:30.900 We always wanna work backwards from our customer

00:07:32.440 And the best way is to just listen to a real person

00:07:34.960 with a sales rep, explaining their pain,

00:07:37.380 talking, hearing how the sales rep explains our solution,

00:07:40.200 figure out where the gaps is from those three perspectives

00:07:43.000 and providing that or capturing that.

00:07:44.980 Number four, capture, fix.

00:07:47.060 So part of that meeting of the triple review,

00:07:50.880 the game tape is to capture those insights.

00:07:53.240 So we want all three participants, marketing, product,

00:07:57.020 sales, to write down the three things that they took away

00:07:59.800 that they think they can do

00:08:00.700 to improve the conversation with the sales rep

00:08:03.260 and the prospect, especially for that segment.

00:08:05.460 And then we want to share and communicate.

00:08:07.600 Some things are obvious like,

00:08:09.080 hey, we don't have Salesforce integration.

00:08:11.000 Eventually we'll get it done,

00:08:12.300 but, or whatever it is that there's missing,

00:08:14.580 but at least let that be known that,

00:08:16.200 hey, there is a workaround if we use Zapier as an example,

00:08:19.320 or we do have an API that we have a consulting team

00:08:22.040 that can code against that, that deals with that objection.

00:08:24.820 As an example, from a product point of view,

00:08:26.960 marketing, same thing.

00:08:27.820 They could take some insights and say,

00:08:29.080 wow, I never thought customers at that scale

00:08:31.380 would have that specific problem.

00:08:32.680 Let's write a blog post around speaking to,

00:08:35.380 you know, seven strategies to overcome that challenge

00:08:37.380 and see if it generates more higher relevant quality leads

00:08:40.760 for that type of conversation with the sales rep.

00:08:43.560 And then the salesperson can just give some coaching,

00:08:45.580 some cues to move things forward.

00:08:47.700 But we wanna capture the fixes.

00:08:49.760 Number five, lock in the playbook.

00:08:51.840 So if a segment's yellow, if you're like,

00:08:54.320 hey, we're going inbound, mid-market,

00:08:56.860 and we feel like we really need to perfect

00:08:59.160 our go-to-market fit,

00:09:00.520 then as you're learning

00:09:02.140 and you're doing these game tape reviews,

00:09:03.760 which ideally you're doing,

00:09:05.100 if you wanna move fast, you can do them daily

00:09:06.420 if there's enough volume or weekly,

00:09:08.120 you're locking into the playbook.

00:09:10.260 The go-to-market playbook

00:09:11.980 or what's called the sales motion for inbound SMB

00:09:16.080 is not the same as inbound SMB

00:09:19.120 and is not the same as inbound enterprise.

00:09:21.540 And you need to build its own go-to-market playbook,

00:09:25.200 take those lessons learned,

00:09:26.440 capture the fixes for the next calls.

00:09:28.900 And slowly, as you see these repeatable patterns,

00:09:31.360 lock them in, document them into a playbook

00:09:34.180 designed specifically to work through that sales motion

00:09:37.660 for that segment of your customers.

00:09:39.740 And by doing that, we build the engine.

00:09:42.220 Everything I talk about is a growth engine of throughput.

00:09:45.400 We wanna increase the throughput of having a conversation,

00:09:47.980 getting a customer, having customer success,

00:09:50.280 succeed with that customer,

00:09:51.300 getting them their desired outcomes

00:09:53.220 and making sure that we repeat that velocity

00:09:56.080 and get it faster and faster.

00:09:58.000 So real quick recap, how to move upmarket

00:10:00.140 without falling flat on your face.

00:10:02.580 Number one, we need to get our GTM metrics

00:10:04.560 or go-to-market metrics.

00:10:06.340 Two, segment the map.

00:10:08.400 Three, triple review those calls.

00:10:11.120 Four, capture the fix insights.

00:10:13.560 And number five, lock in the playbook

00:10:15.420 to build a repeatable, scalable process to move upmarket.

00:10:20.020 So as I mentioned at the beginning of this episode,

00:10:22.100 I wanna share with you an exclusive resource

00:10:23.560 called the Game Tape Reviewer.

00:10:25.360 It's a worksheet, it's pretty straightforward.

00:10:28.060 You're gonna use this with your sales rep

00:10:29.800 for that segment of the call.

00:10:31.040 They're gonna fill out the three things they did good,

00:10:32.920 the three things they could have done better, bad,

00:10:35.640 or opportunities to improve.

00:10:36.820 And then there's a column for each person

00:10:38.980 from a product sales and marketing

00:10:40.300 that they can fill in their three biggest takeaways,

00:10:43.120 insights, fixes that they wanna capture.

00:10:45.520 You can use that worksheet and continue to work through it

00:10:48.240 so you can build a stack of those

00:10:49.840 and use that to really build a case to go to the business

00:10:52.360 and maybe fund that growth channel,

00:10:54.340 that go-to-market fit, but that is your exclusive download.

00:10:58.520 Click the link below to get your copy.

00:11:00.400 If you like this video, be sure to smash that like button,

00:11:03.140 subscribe to my channel.

00:11:04.320 And if there's anybody you know in the software space

00:11:06.640 that's moving up market and you think this video could serve,

00:11:09.700 feel free to share it with them directly.

00:11:11.520 As per usual, I wanna challenge you

00:11:13.060 to live a bigger life and a bigger business,

00:11:15.180 and I'll see you next Monday.

00:11:16.000 Ready to move.

00:11:17.560 Without fall, fall flat on your face.

Dan Martell - June 22, 2020

How to Go Up Market With Your SaaS

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