- Hi there, I'm Dan Martell,
serial entrepreneur, investor, and creator of SaaS Academy.
In this episode, I'm going to share
with you the five business outcomes that you need
to improve and master to build a world-class
Software as a Service, SaaS business,
but truth is they apply to all businesses.
So you're gonna want to check this out
and be sure to stay to the end.
If you've ever been curious, what I call software curious,
you want to learn my specific strategies
on how to pre-sell and build,
and finally launch a software company.
I'm gonna tell you exactly how to get access
to my free Idea to Exit course.
Let's get into it.
(upbeat music)
So one of my philosophies in business
is to study wide but go deep.
So often time, I like to be inspired
by different industries.
I mean, we're talking real estate, self-storage,
commercial, airline industries, service businesses,
online, you know, drop ship, e-commerce, crypto.
You name it, I study it.
And the reason why is I'm always looking for patterns
to adopt and bring into my software businesses.
And, you know, even though when I started off,
I didn't know anything about business.
I was a programmer.
I would just code, stay up 'til two or three in the morning.
And I would just build and I'd keep building
and building and building.
And then over time, after two failed companies,
I realised the only way to be successful business
is to understand the game of business.
What are the key frameworks or outcomes
that if you master you can apply it,
not only to the current business,
because this is the cool part.
You can apply it to every business
you might be involved in, in the future.
So what I want to share with you is kind of these five areas
that I've learned reading over a thousand business books,
doing tens of millions online in SaaS sales and revenue,
to show you the opportunity in your current business,
that you can invest in to get a disproportionate return.
So let's get into it.
Number one, upsells.
Okay, so if you don't know what an upsell is,
if you don't know what a average order value is,
this is the concept is whatever you sell
as oftentimes called a front end offer,
some people call it a tripwire.
Essentially, it's your initial sale.
You want to ask yourself if somebody's struggling
with this problem what's the other problem
that unlocks once they solve that?
And then you can present that as a potential upsell.
And the reason why you want to do this is
because in today's world where the advertising platforms,
I don't know if you've been involved in Facebook lately,
every ad platform over time gets more expensive.
So the person who can spend the most to acquire a customer
is gonna win their market.
And the best way to do that is through upsells.
So I have a client called Click Funnels.
Some of you guys may know who they are,
but I've been working with them for a long time.
And they've built the platform
around essentially creating funnels
and the ability to upsell and down sell.
But this strategy, when I see most businesses out there,
especially in SaaS,
they don't even have any concept of this.
They might think of, well, hopefully someday the client
will migrate to the next package or buy one of these add-ons
and then that's called expansion revenue.
But the truth is, is in your acquisition,
when you acquire a customer,
you have so much opportunity in the upsell/down sell process
to monetize, it's gonna allow you to spend more money
to acquire more customers.
And that's the difference between winning a market
and losing in a market.
So if you haven't thought strategically about what are some
of these other things that we can sell,
I want you to Google upsells for SaaS
and go deep down this rabbit hole.
So you can help monetize those initial customer engagements
so that you can reinvest in your marketing.
Number two is use cases.
Now I have a video on use cases,
check it out from last week, but most businesses,
especially in SaaS, don't do a great job
at capturing customer case studies, okay.
And the use case is really trying to teach a buyer
or prospect how people use your product, okay.
So if you're making the customer or the new user,
try to figure out all the different ways your product
can create value for them,
you're making them work way too hard.
What I would recommend instead
is outline the three to five use cases
that you've got going on for how people use your product,
and then use a customer case study
to exemplify how to do this.
A product called Drift does this really well.
One of my clients, Chris and his brother, Jonathan,
at TrainYou.com does this incredibly well.
All their content is focused on use cases of their products,
featuring customers getting results, having impact.
So if you're not doing that,
double click, go on the route, you know,
search around use cases
for how you can produce the best ones for your product.
And then just literally show the customers.
This is how people get value.
So you don't make them work so hard.
Number three, activation.
So activation is the process.
Think of it like level one in a video game.
So when somebody, you know, signs up for your product,
you know, it's that first initial experience
sometimes called the first time user experience or the FTUE.
But the whole point is to get a customer
to go from like problem to a solution as fast as possible.
And one of the ways that a lot of my clients do this
is using challenge funnels.
I teach a framework called the Challenge Funnel Builder,
that a lot of clients, you know,
I just mentioned click funnels,
but I literally have dozens of clients
that use challenge funnels.
And the reason why is from an activation point of view,
it literally moves the activation of your product outside
of your product into a marketing campaign, right.
So if you do a seven day challenge
for how to get your first hundred emails as a,
and then you're an email marketing solution,
that's your software product.
Then all of a sudden getting customers to activate,
it gets moved outside of the product.
It's a marketing funnel.
And then you can get in the marketing funnel
for the challenge funnel.
You literally use your product as the product you recommend
for everybody to go set up their subscription boxes
and their forms on their websites
and all that crazy stuff, right.
I had a client Cain, he had Coach Catalyst
and they used to do seven day challenges all the time.
Again, to activate clients.
If you've never heard this term before, double down on it,
because the speed we call it the time to first value,
the speed you can go from signed up for your product
to receiving value from your solution for a new customer.
And that average keeps going lower and lower and lower.
That's where you're gonna see disproportionate growth,
because, you know, if it takes normally 14 days
for somebody to get value from your product
and you bring that down to 3,
well A, most people aren't going to stick around for 14 days
and B, if you do 3 days instead of 14 days,
you're just going to increase the cycle time.
And that's why you're going
to have a disproportionate growth.
So be sure to focus on activation.
Number four is product.
You know, and a lot of times entrepreneurs,
I was actually speaking at a very well-known,
these guys do 40 million a year.
They have a software product.
They're also like one of the top coaching companies
in the world and they asked me to come down
and help them kind of look at their whole engine
and figure out where the bottlenecks were.
And one of the areas that I seen was product,
product leadership.
And the reality was is they had never
heard this term before.
They didn't understand what does product actually mean.
So, you know, I'm not going to go down
into the deep aspect of it.
But to me, it's the what do we build area
that the product manager, and usually it's a CEO,
but maybe the CEO is the worst person to be the product
because product is really there
to make the engineering team more efficient.
So if the product manager is the CEO
and they're busy doing other stuff in the business,
then they're not showing up and producing the kind of assets
and leadership and management that's required
to make the engineers more productive.
And they're not managing priorities properly.
I mean I had one of my clients was bragging
because they have like a voting system for their clients
to vote on what features they should build next.
And the engineering team just literally takes things
off the top of the voting system
and just builds it with no clarity,
with no strategic roadmap,
with no positioning or future pacing.
Like literally that is the worst way to build product.
And it actually uncovers this challenge
called the build trap, right.
So Melissa Perry's got a great book.
She's actually spoken at our SaaS Academy intensive
and it's called Escaping the Build Trap.
So if you feel like you're one of those owners
or product managers where you just feel
like you're keep building and building and building,
and it's creating a bunch of bugs
and you don't have real strategy
and you've got competitors coming out
and they're taking away your customer base.
You're gonna want to read Escaping the Build Trap.
'Cause you may be stuck into this product death loop
of just feature-itis, building stuff for marketing purpose,
or because customers are asking for it.
But the truth is, is when you analyse who's asking for it?
Are they the perfect fit for you?
Is this strategically important?
Could you have accomplished this feature with integrations?
I could sit here and talk about product all day long
but I just want you to know, spend some time there.
Becoming a great product thinker, product strategist,
product mind is a very important place
from a dollars and cents point of view
to grow your SaaS business.
And number five is pricing.
Okay, here's a question I love asking my coaching clients.
Number one is if somebody buys your business,
what's the first thing,
what's a one or two things they would change, okay?
First thing they know your industry, they buy your business.
What's the one or two things they would change?
And then the next question I ask them
is well why haven't you made that change yet?
Here's the reason I asked that is
because it's usually the fear
of making those changes that are stopping people
from having disproportionate results for effort.
Now what's interesting about asking that question
for all my clients is that price is never on their list.
Typically it's not.
For maybe 10% it is.
Yet, if you ask me, 'cause I know a lot
of private equity people, including myself,
I do buy companies through high-speed ventures.
What's the first thing a company that buys your business
is gonna do to increase the value?
And it's simple.
It's pricing.
Because most founders do not continue
to update the price value
that they've created in the market.
So I'm not gonna be able to dive in.
I've done a tonne of videos on pricing,
but if you want to know some of the people I admire
that I've invited into my world to coach my clients,
guys like Patrick Campbell at Price Intelligently,
we've got my coach Marcos Rivera,
who's got an incredible book coming out
and Pricingio.com is his website.
And then also my friend, Alex Hormozi wrote an amazing book
called A Hundred Million Dollar Offer.
In there, he has a lot of pricing psychology
and arguments that if you're still sitting on the fence
and you haven't pulled the trigger
and you don't feel comfortable putting your prices up,
I would highly recommend you read Alex's book
because that is the number one thing.
I call it chocolate broccoli.
It's not that much chocolate.
It's not desirable to change your prices
'cause it scares the bejesus out of a lot of people.
However, from a pure ROI time spent value
to unlock resources, to be able to invest in your business,
maybe go hire people to lead some
of the other areas I've just mentioned,
you can't beat pricing.
So quick recap on the five business outcomes
to master to be better in SaaS.
Number one, upsells increase your average order value,
front end offers, et cetera.
Use cases so that you can allow customers
to see exactly how you can add value.
Number three is activation.
Challenge funnel style's my favourite.
Four is product and five is pricing.
As I mentioned at the beginning of the episode,
I want to share with you my Idea to Exit mini course.
This is the exact process I've used
to launch multiple companies.
Pre-sell the product, using clickable prototypes,
build the team off of the dollars I've collected
from pre-selling and eventually launch
and scale the company, raising venture capital and exiting.
So it is all there.
I know it's a big promise, but if you click the link below,
you can get access to that.
It's the Idea to Exit mini course.
It goes over all that and more.
So just click the link below to download your copy.
And if you like this episode,
be sure to subscribe to my channel.
Click the like button and please leave me a comment.
Let me know below what was the one thing
that you needed to hear the most?
What you liked, what you felt just was the biggest insight.
Leave a comment below.
And as per usual, I want challenge you
to live a bigger life and a bigger business,
and I'll see you next Monday.
(upbeat music)