- [Dan] Johnny, I know there's other markets
you can go after, but if you're honest with yourself,
how much more efficient is it for me
to go and grow the current thing,
30% versus starting from zero
and building it up 30% to where I'm at.
This thing's usually three to four times easier.
(upbeat music)
- [Dan] Johnny, how's it going?
- [Johnny] Hi, Dan, I'm good, how are you?
- [Dan] I'm doing incredible,
super excited for our chat today.
Before we get into it, I want to ask you to explain product,
what problem you solve?
Who do you solve it for?
Tell us more about your business.
- [Johnny] Yeah, so my name's Johnny Clark.
I'm CEO of a company called Locate a Locum.
So we help healthcare organisations manage both
their temporary and their permanent staff.
We're actually a SaaS enabled marketplace.
I'm not sure how many of those
you've came across Dan, but it's unique business model
which creates opportunities and also challenges as well.
- [Dan] Cool and how long you been doing it?
What's the size of the business?
Either GMV or what can you share?
- [Johnny] Yeah, I've been doing it close to five years.
So about 35 employees and we're at about 2 million ARR.
- [Johnny] Very cool, congrats.
Marketplaces are like having twins.
They're super hard to do.
I did that with clarity and I actually coach a lot
of clients that have kind of SaaS enabled marketplaces.
And they're super fun, if you can get
them to work man, they are some of
the most powerful business models out there.
Johnny, how can I help?
- [Johnny] Yeah, so one of my challenge has Dan,
is growing the account management function.
So on our SaaS side of the business,
we have very, very large enterprise accounts.
We work with one of the largest pharmacy chains here
in the UK, and I really wanna strengthen out that team.
So the question really for you today is,
what do I look for in an account manager?
How senior do recruit?
This company is huge and they're not gonna deal
with any newbie that's gonna get walked over.
And the last part of that is how do I manage them?
- [Dan] Yeah, that's a great question.
So Johnny, I love that you're thinking about this
because it tells me that, you care
about expansion revenue, actively onboarding renewals
cause account management is this really cool function
that I feel like software companies,
are starting to learn about, it's kind of
in the customer success realm.
And before it used to be agencies,
consulting companies would have these account managers
enterprise deals, but it's really become kind of
this groundswell of realising that,
if I can activate engage and expand a customer,
the ROI on investing in a person to support
that account over time is worth that investment, right?
Especially if you have a high annual
contract value type customer.
The way I always recommend my clients
to hire those people is find people from the industry.
So if you know that there's a certain vertical
you mentioned, pharma.
Is there other pharma companies that you currently support?
- [Johnny] Yeah, so it's pharmacies,
like you might call it a chemist is another word.
So yeah, there would be other technology companies
in the pharmacy space that I could probably recruit from,
obviously they not--
- [Dan] They're not even technology companies.
So you sell to a pharmacy itself.
Do you sell to the pharmacist
or to the owner of the pharmacy?
- [Johnny] Both, it depends on what size
the pharmacy is.
So it's a single pharmacy we would sell to the pharmacist.
They're generally the owner and we've been really focused
about who our ideal customer is.
And we've been going down the enterprise route,
we we've built out SDR function, account executive
and that landed us our biggest deal really last year, so--
- [Dan] And that's the one you want staff
with an account manager?
- [Johnny] Yes, yeah.
We don't mind an account manager looking
after the little ones, but it'll be on a much--
- [Dan] Well, sometimes you can't afford to do it.
So that's why I ask, right?
The contract value's gonna set.
What percentage of your revenue
from an account you can associate
to a CSM or account manager type role.
So the bigger account obviously has more margin
for you to be able to do this with
and the truth is they need this.
So I teach this framework called
the EBR flow planner Executive Business Review flow.
It's kind of like a nine box model
for how to structure meetings.
So I'll definitely, probably link it up below
for people to download.
I do offer it up, but you actually have access to it.
So you can go check that out.
- [Johnny] That done.
- [Dan] Yeah, It's a good one, so--
- [Johnny] Good.
- [Dan] So then what I would do
is I would hire somebody cause right now
that client is a pharmacy company.
They have multiple locations, correct?
- [Johnny] Yeah, a lot.
- [Dan] So hire somebody, not in tech
it doesn't have to be in tech.
It could be, but truthfully you just want somebody
that knows how to speak the language of the industry.
So if I was selling to let's call it automotive, right?
So car part, type of company and there's
these conglomerate or even better,
a building company, like a home depot, right?
I would wanna find people that used to be account managers
for home depot type companies, even in other industries
they could have been in finance
a consulting firm, like Accenture or Deloitte.
They could have been in media buying.
They could have been in marketing agencies or whatever
cause at the end of the day managing a project,
managing account, managing expectations,
coordinating resources within your organisation and theirs.
That's something that, that person would have experience in.
And what's really appreciated typically
is the unique understanding
of the business and the business model, right?
When you have somebody that comes in
and they can only speak your technology
but they can't speak the Pharmac technology
or the pharmacies challenges,
then that's what's really missed.
So I'm always looking for when, we call them CSM.
So customer success managers, but will pull
from an account manager pool of people
from other industries that served or
from other verticals or markets that serve
that industry because that usually works a lot better.
And sometimes, and what you can get lucky
on is it's a double, this is the double whammy.
You ready for the ultimate move Johnny.
- [Johnny] Yeah.
- [Dan] Finding somebody that was
in sales that doesn't wanna do sales anymore
as an account manager is the double whammy.
Why, they can speak to that customer for days.
They have the relationships and the double whammy part
of it is they can also bring you net new deals.
- [Johnny] Yeah, which we want.
- [Dan] Yeah, so a lot of sales people,
they have a kind of a tenure where after five or six
or seven years of doing something, they just,
and the quotas and they change their comp plans.
And they're just like, "You know what?
I don't wanna do this anymore."
Somebody gave me an opportunity to work in this industry,
but doing more CSM stuff, customer success manager
they usually you take it.
And sometimes the career path
for a lot of internal teams where they'll start
off as an SDR kind of work their way up
become an accountant, work their way up.
And then at that point they might go
to product side of the business or they're gonna go
to CSM side of the business or they might roll back up
into a revenue leadership type role.
But I'm a big fan of grabbing sales people
and putting them into account manager positions
because they already understand the pain points.
They understand the markets, they understand
the way those customers think,
they know how to communicate with them.
And it's just a powerful way to recruit
to build out that org.
- [Johnny] Yeah and I feel with this one,
I do wanna maybe recruit a more senior type individual
because it's a lot of risk, right?
It's like, it's your biggest client,
your most precious client, you represent a lot of revenue.
So I have to be really secure but
the person I'm gonna put in front
is gonna deliver and I'm not an experienced.
I'm a first time founder, first time CEO.
I'm not an experienced account manager.
So I do wanna learn to a degree of someone also.
- [Dan] For what it's worth, just to give you
a ballpark kind of industry norm,
usually an account manager can handle
two to $3 million of business, right?
So this new customer, how big
of a deal size would they be on an annual basis?
- [Johnny] Probably about half a million.
- [Dan] Yeah, so think of it that way,
as an account manager should be able
to handle four of those accounts
maybe five of those accounts, right?
Because that's the kind of revenue level
that needs to be true for you to make
the business work in scale.
But they also need to be accountable for expansion revenue.
So I'm a big fan of saying,
"Hey, here's the way we expand accounts.
Here's how we keep accounts.
You're responsible for--"
It's almost like a book of business or a revenue.
It's almost like their own PNL, right?
They've got customers coming in.
They didn't bring them in, but they gotta keep them
and they gotta expand them as part of their comps.
You can do a base plus a variable based
on those two components, the retention and the expansion.
- [Johnny] Yeah, yeah, yeah, yeah, yep.
I see it as a farming role.
I don't see it as a we've separated customer success out
and we look at them as like happiness.
So they're very much NPS scores around up that we see
that as a separate function, very much,
this is a it's a sales type role.
So I do, like you said, someone act sales
I agree with that.
- [Dan] Yeah, that's a good distinction.
A lot of people still struggle with,
"Does my CS person also sell?
Do they just identify opportunities
and then bringing in the salesperson?"
Sounds like what you want to do is bring in
an account manager that's responsible
for growing the account and then leave
the success components, activation engagement, onboarding
to a different apartment, which is fine.
They still try to act as the quarterback
for the account so that everything's getting moved forward
because it's hard to expand
if they're not even being successful, right?
It's hard to expand if they're not even consuming
the current product that they bought.
So I love that you want to do that,
because it centralises the revenue growth
and not having people making introductions
and trying to move things around.
- [Johnny] Yeah, yeah.
Okay, okay.
Yeah, that's great, thank you.
- [Dan] Awesome, what was else on your radar, Johnny?
- [Johnny] So we've really executed well
in the pharmacy market here in the UK
and on Ireland, we'd see ourselves one
of the market leaders, but we believe
the solution that we've created,
isn't unique to pharmacy it's actually applicable
across wider healthcare.
How do you make that decision
about when you moved in an adjacent market?
At what point do you do it?
And secondly, how do you do it?
- [Dan] Yeah, it's a great question.
I had deal with that so many times.
It's literally one of those decisions
that every entrepreneur has to deal with
both going to market in a sales motion.
Like when do I add a different vertical?
When you're a platform,
when do we go after a different segment of the market?
I think of it a few ways.
One until I get about 20% of the total addressable market,
I feel like there's enough headwind
and room for me to kind of build into, right?
So you would know best,
these is the market I serve UK and in Ireland.
What's the total number of pharmacies?
But within that, what are the actual,
the specific number that we could actually work
with based on our ICP and then of that,
what's our kind of current concentration
of that market to give you a sense
of penetration rates, right?
And I'm just a fan of focusing,
before I move on to another one,
because it sounds exciting right?
Like, "Oh, it's so similar to this." right?
I had a client that sold to real estate agents
and they wanted to sell to real estate investors.
And it was 10% different product, right?
We add this module and it's like real estate agents.
And now real estate investors doubles
the size of our market.
And they're already in our pipeline
and et cetera, et cetera, et cetera.
What you forget is, one you now
have two positioning statements
you gotta go after in the marketing side of things.
You have a completely different typically,
hopefully you different pitch deck, right?
Because the language, the words, the case studies,
they all have to align with that new market.
You have a different setup of challenges potentially
around like onboarding activation as a marketplace.
You've got the supply side of the demand side.
You gotta get to work well.
And the truth is,
if you look at the amount of effort to do that
if you're still in the single digit
kind of like penetration of a market,
my gut says double down
and try to figure out how can you deploy more effort?
Resources are capital, to grow that size of the market
and then decide like maybe once you get to 10, 15, 20%,
usually for me, it's about 15 to 20%.
That's when I go to the next one and I kind of
do the same playbook until then I go to the next one, right?
Because the truth is most companies don't fail
from too many opportunities.
What I call indigestion or starvation,
they fail because of indigestion.
They do too many things.
It's funny because then stuff stops working
and then they don't know what's not working
because they're doing too many things.
It's like they got five different markets,
they're going after five different sales motions
five different account manager categories.
It's like, you guys, aren't talking
not sharing best practises.
It's just complexity, right?
Businesses die under the weight of their complexity.
And the longer you can focus
on a specific market and build up that revenue
and I call it unlocks you wanna set the target
for the revenue and you might be there.
You might say 3 million, that's my number.
So it's like six months from now,
you get to 3 million, it unlocks.
So I don't when people say,
"When can I add this extra module?
Or when can I go into another market?
I just go, "What do you think's reasonable?"
Is it a couple hundred K in MRR?
Or is it a hundred K, to me it's at least a million dollars
in top line revenue on an annual basis.
But if you're past that, you say, well
"There's still a lot of headroom here.
Why would I go get distracted and do another one?
When the speed of capturing net new revenue
an existing thing is literally three
to four times easier, right?
Johnny, I know there's other markets you can go after
but if you're honest with yourself,
how much more efficient is it
for me to go and grow the current thing,
30% versus starting from zero
and building it up 30% to where I'm at.
This thing's usually three to four times easier, right?
Cause you've got momentum, you've got market awareness.
You've got case studies.
You've got know-how, you've got best practise built up.
You've got the systems, you've got the infrastructure.
So I never say, don't do it.
I just say set the goal that you know
is a logical unlock to get you
to start down another process.
So that way it's not a decision
you're always arguing with your team on,
it's very logical and thoughtful
and it's based on on data and not emotions.
And then that way you can run as fast
as you can run to the unlock is as fast
as you can move to start working on that new one.
- [Johnny] Great, that makes sense.
Thank you for that.
- [Dan] So Johnny, as we lay on the plane
and kind of lock in some of these takeaways,
what would you say are the biggest two
or three things that I might have mentioned shared
that resonated the most with you?
- [Johnny] Yeah. I'm gonna take time
to go through that EBR flow training that you have.
Again Dan I've watched it before.
It was very beneficial, but you've reminded me of it today.
I'll go through that again.
I liked your point about hiring from the industry
as something I haven't thought of before.
I think that's totally correct.
And something that we can do and--
- [Dan] Especially the sales role, the double wha--
- [Johnny] Yes.
Yeah, yeah, yeah, yeah.
And--
- [Dan] And just, what it's worth the way I do
it is I find people that worked
at these companies that would've sold to that.
So like the suppliers, right?
The pharmacists have suppliers and you can go
on LinkedIn and you could search previously work that,
so you could type sales or account manager previously worked
at and then put the name of the supplier.
And so that means they're no longer there.
So you're not competing and pulling people from the industry
but you're gonna pull them from somewhere else
they might be at that, they have the experience.
- [Johnny] Yep, yep.
I agree, I agree.
Thank you for that.
So if I can find a double whammy person,
I'll be really happy.
- [Dan] Very cool.
Well, Johnny, I really appreciate the time, super fun.
Obviously, I'm excited about
the Saas enabled marketplace space.
I think it's one of the six SaaS trends
I've been telling people about that are gonna come.
Same thing with Saas and IOT
I think that's another big trend line,
but building it five years, like I said,
it's like having twins, it's double is hard.
Most people don't have the stomach for it.
So congrats on the early traction
and excited to see how things go.
- [Johnny] Thank you Dan
Thank you very much for your time today.
I really appreciate it.
- [Dan] Awesome. Great job John, cheers.
- [Johnny] Bye.
(fading upbeat music)