Today I interview Dekker Fraser and we talk about Go-to-Market strategies for SaaS startups. Dekker is a veteran Silicon Valley marketer who worked for many tech companies including Sony PlayStation, Google-backed Rocket Lawyer, and venture-backed Webgility. He holds an MBA in marketing from the Kellogg School of Management. Dekker was also a Division Director in Toastmasters and trained at Columbia University, BI Norwegian Business School, and Mount Allison University.
How Dekker got started in the tech world
Dekker comes from a family of entrepreneurs. His older brothers had started a number of different tech companies and they needed help with marketing so they took him under their wing.
He learnt a lot through trial and error and ended up attending obtaining an MBA from Kellogg School of Management.
The key pillars of a successful SaaS Go-to-Market strategy
The first thing you need to consider is the target market you are participating in with a special emphasis on the audience and who you want to derive value from the product. This is not limited to the customers you are going after alone, you also need to consider the partners you want to collaborate with and the collaborators that will assist you in bringing your product to market.
The second key is the value preposition, you need to create value In the target market that is beyond what competing SaaS products are offering. It is also strategically important to create value for your partners.
The third key is your messaging and a big part of that is the positioning that goes with your messaging. Your marketing mix is also vital and pricing is an important part of the marketing mix.
The biggest myth that cripples most SaaS companies
There is a huge myth floating around the SaaS sphere that your target market is the same thing as your target customer and this leads to all sorts of problems.
A lot of successful startups that have made it to the medium and large size while scaling fast are doing it because of partnership marketing and building mutually beneficial relationships with other businesses.
Another mistake is focusing on markets that are not big enough. The idea of going into markets that have little competition as popularized by the marketing book called Blue Ocean Strategy can be great however it can also end up becoming a huge mistake because people end up focusing on little niche markets that have no competition and tiny demand.
How to successfully connect with potential SaaS partners and influencers
One of the best ways to start your conversation is to see if you have a mutual connection who can make an introduction. If the key influencer is actually an organization that is larger than yours, you might want to go through a mutual LinkedIn connection or through somebody from your college network.
If the key influencer is someone on a smaller scale maybe it is a professional like a lawyer who has expertise in a specific area, then you can reach out to that person directly through LinkedIn or have a conversation via email.
A particularly useful idea to try out if you are in the business to consumer space is to send free samples to those influencers and get them to try out your product.
The other thing to take note of is that most people are receptive to flattery so if you’re reaching out to an influencer, and you are a fanboy of their page or their YouTube channel and you love it, then tell them that.
How small SaaS companies can compete with large companies
One of the easiest ways to do this is instead of trying to be everything you can become part of a larger ecosystem. Some examples of that is the Salesforce AppExchange, instead of trying to be the next CRM you can be the little piece of add-on to the sales force ecosystem.
You don’t need to capture the entire relationship with the customer, you can just play a smaller role and when you are a smaller company, that might be all you need to meet your target.
You also need to take note of the various types of competitive advantages that prevents competitors from taking customers from you.
If you Go-to-Market and then a big player comes out with a competing offering that adds on what you already deliver, these competitive advantages make it very difficult for them to take customers because they are stuck to you.
Customer captivity is one of the biggest advantages you need to be aware of, the customers who are in the habit of using your product daily instead of monthly are going to be more stuck to your product. You need to focus on customer captivity because you need to find out how to make customers stick to you and make them not even want to leave
If you build switching costs into your products, that will also make people stick to your product.
It is difficult to get economies of scale when you are dealing with a huge SaaS market like the USA so what we often see is successful startups simply replicate what was done in USA and adopt it on another country, for example New Zealand has carbon copies of ebay and it was the startup ground for Xero software which competes with Intuit. You can build economies of scale in smaller regional markets.
It is important to build relationships with your customers and this goes beyond acquiring customers, you need to keep them happy and engaged, this is very important especially in the early stages, because a lot of the people that are adopting your product in the early stages are influencers.
These may be tech gurus, these may be developers, these are people that probably are more dedicated and interested in your product on a deeper level, they are going to influence other developers, clients of theirs on Reddit, people on Quora and more. They have a disproportionate share of voice in the market so engaging with them is not a waste of your time.
It is also important to host a weekly webinar as it is a great way to engage with your customers and generate leads.
The key mistakes you need to avoid when segmenting your customers
The biggest mistake people make is they come up with a persona that is based on demographic data, so things such as age and gender. This is not really what you should be focused on, you need to look at how customers are deriving value from your product and that often correlates with the type of industry you are in and the problems your customers want to solve.
Don’t segment arbitrarily based on things that are easy, look at what actually matters and what aligns with your product.
When you are marketing vertically or in an industry specific SaaS, you can size the market in an easier way, get a list of prospects and you don’t need to waste a lot of time generating leads. You can just buy the leads and focus your efforts on nurturing them and converting them into customers.
How to use cluster analysis to segment your customers
Cluster analysis is using machine learning to aggregate all the different data points on your customers. It involves things like how long they use your software, how much they spend on your software, how many employees they have and more. Once you have compiled that data, insert it into SPSS or any statistical program to find out the actual segments that are clustering.
The major mistakes SaaS Founders make in the early stages
One of the biggest misconceptions in the marketing realm is the belief that benefits are more important than features so if you focus on your products features nobody cares.
In reality most SaaS customers really care about the functional benefits that you deliver on, when they see a landing page that is full of benefits they may not know what your product actually does.
Marketers usually try to make things go viral with emotional positioning, so messages around high level benefits but customers actually talk about the functional benefits that solve the immediate pain they have.
Hiring marketing managers or marketing consultants who don’t understand demand generation is another major mistake you need to avoid. Demand generation is highly tactical and it often undervalued by a lot of people that have experience in large companies because they spend a lot of time building and protecting brands.
Another major mistake is getting into the marketing strategy without having a goal, your strategy is just a means of achieving your goal. Your goal may be to create enough money to support yourself or it may be trying to get 10 million ARR in the next couple of years.
Once you have a goal, then the marketing strategy you need to adopt to becomes easier as your goal will dictate the tactics you need to use.
Salesforce AppExchange – Extend Salesforce Digital 360 with AppExchange
Xero – Accounting software – Do Beautiful Business
Product Launch: Product Marketing by Decker Fraser