Dan Martell - June 22, 2020


How to Go Up Market With Your SaaS

Hosted by
Dan Martell
Mentioned
Mark Roberge
Mistakes To Avoid on Product Demos with Steli @ Close.com - Escape Velocity Show #30 Get More SaaS Product Reviews (Easy Way)

Episode Stats


Length

11 minutes

Words per minute

195.15

Word count

2,210

Sentence count

102


Summary

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

In this episode, Dan Martell shares how to move up market in your software business, or any business, really, but to do it without falling on your face because it sounds like a good idea until you realize there s key things that you re missing.

Transcript

Transcript generated with Whisper (turbo).
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
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.