- Hey there, Dan Martell here.
Serial entrepreneur, investor, creator of SaaS Academy.
In this episode I'm gonna share with you
how to move upmarket.
If you're trying to move upmarket 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 realise
there's key things that you're missing.
Be sure to stay to the end where we tell you
how to get access to my game tape reviewer worksheet.
This is where we listen to sales calls
with market customers and understand the key learnings
and takeaways that we should be
using to guide our decisions.
Let's get into it.
(upbeat music)
- [Dan] So I have the extreme privilege of coaching
some of the most ambitious, driven, kind
entrepreneurs out there in the B2B software space.
Folks like ClickFunnels and Proposify and Carrot dot com
and just literally, dozens of others
and one of the things that comes up very often is
their want or need to move upmarket to increase
what's called their average contract value, ACV.
Now.
What I've seen, doing this in my own companies,
I've built, you know, I've been building companies
for 20 years now, multiple seven figure businesses,
I've realised there's so much more to consider
than just having what typically is a customer comes in,
they're upmarket, they're more enterprise,
or more mid-market, whatever it is
and they pull you up into that market.
And you, just like, say "Yes."
And you wanna do it.
And you don't take into consideration the impact
it's gonna have in your go-to-market,
in regards to your marketing
and your sales process, your sales motion.
Or, even into the product side of things,
the demands and features and needs from a,
even getting deals done with
compliance and securities and financials
and all these things and key features, integrations.
So, what I wanna share with you is
the lessons learned of coaching dozens of founders
into moving upmarket successfully because
what typically happens is somebody raises a tonne of money,
they tell the investors
"I'm gonna go and scale this business up,"
and then they fall flat.
You know, they hire seven salespeople and then
six months later they gotta fire everybody.
So, I actually talked to my friend Mark Roberge.
He wrote a great book called
"The Sales Acceleration Formula"
and what we talked about is his process that he used
that really inspired the conversation we'd be having
with you today to assess different key metrics,
the strategy to moving upmarket
and really understanding the map
we need to be following so that we can be successful.
Let's get into it.
Number one.
GTM Metrics.
The go-to-market metrics.
So the way I think about it is
regardless where you're at your business,
if you look at a segment of customers
let's just call it inbound and mid-market customers
or inbound and SMB small medium businesses,
we wanna look at three key factors.
Number one, annual recurring revenue.
The percentage of the total revenue
for that customer segment.
Number two, we wanna look at the CAC Payback Period.
The cost acquired customer payback period meaning
how many months does it take you to pay back
that new acquired customer in regards to their revenue
if it's on a monthly basis.
How many months does it take to pay back.
And then also the percent of Logo Churn.
Logo Churn means the account itself churns,
means they cancel.
If you don't have a significant amount of
ARR in a category
and your CAC Payback Period is way too long
'cause you haven't figured out the go-to-market,
and you have high Logo Churn for that segment,
then there is an area of improvement.
Because I think people talk about product market fit
all the time, what they don't talk about is
go-to-market fit, and this strategy in our conversation
today is gonna help you understand if you have
go-to-market fit.
So, for each segment you need to understand
the percent of annual recurring revenue for that segment
and your total business, the CAC Payback Period
and the percent Logo Churn.
You don't have that, then don't even move up.
Go baseline those numbers and then come back.
Number two.
Segment the map.
So, the way to think about it, it's a three by three matrix.
So a grid.
And on one side you have at the top inbound,
in the centre outbound,
at the bottom partners.
And then across there, you have small, medium and large.
So you think about kind of the go-to-market strategy.
So are you doing an outbound strategy or an inbound strategy
or a partnership strategy.
Those are kinda the big three.
And then, do you sell to small business, medium size
or enterprise.
And then what you wanna do is essentially
get the numbers that I just mentioned,
your go-to-market metrics, your ARR, your CAC Payback Period
and your percent Logo Churn and put those
into that map so that you can visually see
how those things stack up.
And then, what you wanna do is, you want to
communicate to the rest of the team that
these are the segments that we're focused on.
Red means we're not doing partners and we're not doing SMB.
You might say red for the whole stack of SMB
'cause you don't sell to SMB.
But it's just a really clear communication tool
to let everybody on the team know,
"These things are checkmarks, they're good."
"These things are yellow, we're exploring them.
We're seeing if we can make them better."
Let's say inbound enterprise.
Maybe we don't have a good inbound enterprise strategy.
Which typically happens
when you're moving from SMB to mid-market.
You've got a great content funnel,
product led growth strategy for SMB but it doesn't work
for a mid-market customer
so you might need to invest in that.
So that's yellow.
And you know, you might say,
"Look, we're not doing enterprise right now.
Enterprise we're keeping it off."
So if any big customers come in,
they can use our product set the way it is,
but we're not committing to any future change,
et cetera, 'cause it's gonna dilute our focus
and ability to succeed.
So we want to segment the map around those three axis's
again, inbound, outbound, partners.
Small, medium and large.
Those three metrics,
how are you doing,
for each one of those squares
on the grid to let you know
how to communicate that to your team.
Number three.
Triple review.
One of the most powerful strategies you tend
to learn from a customer is to listen to the game tape.
If you're a professional athlete, it doesn't matter
who you are, you are definitely watching your plays.
You know, on the field of play you're watching the tape.
You're watching how you perform.
You're watching how the team
you're competing against perform.
And you're looking for opportunities to learn.
And to me, working backwards from the customers
is no different.
So here's how it works.
I want you to talk to one of your sales reps and say,
"Hey, pull a call from a customer that was
maybe mid-market, that came through a partner channel."
And then what you do is you sit down with that sales rep,
prior to coming in, you ask them to prep.
"I want you to come up with two to three things that
you felt you did good on that call.
Two to three things that weren't so good."
So they come ready and prepared.
They present that to the team on the game tape review.
You might do this every, if you're trying to iterate fast
product market fit, go-to-market fit,
you might do it every day.
You might do it every other day, or at least once a week.
And you wanna sit down with the product lead,
the marketing lead and the sales lead.
And you want each one of them to listen to the call
and come up with some suggestions or ideas
to improve the conversation.
That's why I call it a triple review.
You've got those three people in there
and they're providing key feedback, as I mention
I'm gonna share with you a worksheet on how to do this,
key feedback that you can use to improve
that conversation if you're focusing on that specific
segment in go-to-market, to iterate
or rather, we always wanna work backwards
from our customer and the best way is to just listen
to a real person with a sales rep, explaining their pain,
hearing how the sales rep explains our solution.
Figure out where the gaps is from those three perspectives
and providing that or capturing that.
Number four.
Capture fix.
So, part of that meeting of the triple review,
the game tape, is to capture those insights.
So, we want all three participants,
marketing, product, sales,
to write down the three things that they took away,
that they think they can do to improve the conversation
with the sales rep and the prospect,
especially for that segment.
And then we want to share and communicate.
Some things are obvious like,
"Hey, we don't have salesforce integration.
Eventually we'll get it done,"
or whatever it is that there is missing.
But at least let that be known that,
"Hey, there is a workaround if we use Zapier"
as an example, or "We do have an API that we have
a consulting team that can code against that."
That deals with that objection,
as an example from a product point of view.
Marketing, same thing.
They can take some insights and say,
"Wow.
I never thought customers at that skill would have
that specific problem.
Let's write a blog post around speaking to
seven strategies to overcome that challenge and see
if it generates more higher relevant quality of leads
for that type of conversation with the sales rep."
And then the salesperson can just give some coaching,
some cues to move things forward.
But we wanna capture the fixes.
Number five.
Lock in the playbook.
So, if a segment's yellow, if you're like,
"Hey, we're goin' inbound, mid-market and we feel like
we really need to perfect our go-to-market fit."
Then as you're learning and you're doing these
game tape reviews which, ideally,
you're doing, if you wanna move fast,
you can do em daily, if there's enough volume, or weekly.
You're locking into the playbook.
The go-to-market playbook or what's called the sales motion
for inbound SMB is not the same as inbound SMB
and is not the same as inbound enterprise and you need
to build it's own go-to-market playbook,
take those lessons learned,
capture the fixes for the next calls,
and slowly as you see these repeatable patterns
lock em in.
Document em into a playbook designed specifically
to work through that sales motion for that segment
of your customers.
And by doing that, we build the engine,
everything I talked about is a growth engine, of throughput.
We wanna increase the throughput of having a conversation,
getting a customer, having customer success,
succeeding with that customer,
getting them their desired outcomes and making sure
that we repeat that velocity and get faster and faster.
So real quick recap.
How to move upmarket without falling flat on your face.
Number one, we need to get our GTM metrics,
our go-to-market metrics.
Two, segment the map.
Three, triple review, those calls.
Four, capture the fix insight.
And number five, lock in the playbook to build a repeatable,
scalable process to move upmarket.
So as I mentioned at the beginning of this episode
I wanna share with you an exclusive resource called
the game tape reviewer.
It's a worksheet.
It's pretty straightforward.
You're gonna use this with your sales rep
for that segment of the call.
They're gonna fill out the three things they did good.
The three things they could have done better, bad,
or opportunities to improve.
And then there's a column for each person from
the product sales and marketing that they can fill in
their three biggest takeaways, insights, fixes
that they wanna capture.
You can use that worksheet and continue to work through it
so you can build a stack of those and use that to really
build a case to go to the business and maybe fund that
growth channel, that go-to-market fit.
That is your exclusive download.
Click the link below to get your copy.
If you've liked this video,
be sure to smash that like button.
Subscribe to my channel.
If there's anybody you know in the software space
that's moving upmarket and you think this video could serve
feel free to share it with them directly.
As per usual, I wanna challenge you to live a bigger life
and a bigger business and I'll see ya next Monday.
- [Off-Camera Male] We're ready to roll.
- Without falling flat on your face.