10 Signs You’re Targeting the Right Customers in B2B SaaS

In the early days, you’ll have both good and bad customers. You’ll deal with terrible companies, but also great ones. So, how do you make sure you’re targeting the right customers?

The sooner you’re able to recognize what makes a great customer for your business, the faster you’ll be able to focus on them and find more.

So, how can you tell if you’re targeting the right customers?

1. They look like the people you’re trying to target

All companies start with at least a broad sense of who they’d like to target. Is your product for the Fortune 10,000 or Fortune 500 companies?

Now, what company or what person would you – if they signed up today – be excited to tell everyone about?

If you’re like me, you might be looking at your customer activity stream (or logs) getting excited whenever someone signs up or uses your product. It’s a great start to figuring out if your customers look like the ones you’re really trying to attract.

Look at their social media presence, blog, LinkedIn, company website. Does it feel like a fit?

Now, if you don’t have an activity stream in place, but have a user or customer list of emails, you can use a service like Clearbit or Rapportive to enrich their profiles.

For example, Clearbit adds location, seniority, industries, salary ranges and a bunch of other good stuff.

Are you getting more business or personal users signing up? Do they look like people who should be finding value in your product? Are they in markets that can afford a product like yours? Are there any surprises?

The closer the match, the better the odds you’re targeting the right customers.

2. They open your emails, texts and answer your phone calls

If your product is not a priority or if your users have become disengaged, chances are that they’re not even opening your emails.

That’s why it’s really difficult to re-activate disengaged users or… to get feedback from customers after they’ve cancelled.

Because there’s a nice correlation between email opens and engagement, I’ve used emails in the past to gauge engagement of segments within customer bases.

If you’ve got an email that performs well, or a proven subject line, you can test segment by segment to figure out where there’s a fit (or not) to find out where your message is no longer connecting.

3. They’re willing to help

Engaged customers also care about your product’s success. They’re happy to help if it means they, in turn, get to use a better product.

In a way, they’re projecting their future use of your product and that’s a great sign.

Suppose you’re sending a survey tomorrow, do they jump at the opportunity to give feedback? Or do you have to fight to get them to talk to you?

Do they answer your questions? Are you getting unsolicited feedback? Inbound emails? Mentions on Twitter? All of those are great signs of product-market fit.

4. They’re not waiting for the ‘next feature’ to start using your product

They use it today.

Entrepreneur and author Joshua Porter coined “The Next Feature Fallacy” to talk about entrepreneurs’ hope that the next feature will suddenly make people use the product.

Targeting the Right Customers - The Product Death Cycle
The Product Death Cycle

But, if you’re getting some usage, you’re already doing something right.

The truth is, non-users or non-customers tend to focus on what you’re not. They want new things added to the product. In other words, they want another product.

The right customers want improvements to the product you already have.

That’s a big difference.

At LANDR, we had managed to segment our users by personas. To figure out the best fits with our feature set, we ran very thorough Kano surveys.

Now, if you know anything about me, you know that I love Kano surveys. It’s the best tool to uncover the true perceived value of a product.

When we ran this survey, we were able to visualize that a certain segment – our beachhead market – thought that the product already had all the right features, they just wanted them to be better, whereas other segments wanted mostly new things.

By targeting these segments together, we were building features that didn’t make a difference for our beachhead market’s enjoyment of the product.

5. They actually use your product

They’re not using it ‘later’. Or after you’ve made it easier for them to get started.

They try it, get the ‘aha’ moment, use it again and find value.

Customers that don’t use your product or don’t find value within your product eventually churn. By retaining them, you’re merely delaying the inevitable.

6. They would be disappointed if they could no longer use your product

A valuable product solves a need. And if that need is real, then people start to rely on that solution.

Entrepreneur and marketer Sean Ellis devised what’s known as the Sean Ellis Test to validate that a company has P-M fit. In his model, a product that leaves more than 40% of its users disappointed if it disappeared has P-M fit.

Although this is not a hard rule, it’s a good way to tell whether you’re building a vitamin or a painkiller.

The problem with this survey is that there’s almost always a disconnect between what people say they’ll do, and what they actually do.

It’s entirely possible for a product to excel at this test, only to crash and burn when the business tries to scale.

That said, it’s a good place to start. You can take the survey at survey.io.

Another good model is David Cummings’s (co-founder of marketing automation platform Pardot) – rules to identify product-market fit.

It looks at your business’ momentum. It’s an interesting checklist to use in conjunction with the product-market fit survey.

7. They don’t need to be tricked into buying your product

Nowadays it feels like « growth hacks » are everywhere. At scale, I think you can hack a better conversion funnel or improve through continuous optimization, but this can’t come before finding your market.

You want customers to buy for the right reasons. To find real value in your product.

Tricking people into converting – or discounting the product – is blurring that assessment.

Instead, watch where they drop:

  • If visitors never reach your pricing page, the value’s not strong enough.
  • If they don’t click buy, your plans or price points are not compelling enough.
  • If they click buy, but don’t go through, the payment methods or the language are not good enough.

You have to know where your funnel breaks and be aware of the customers who are going through with minimal friction.

8. They’re not on the verge of cancelling their accounts

Entrepreneur Dan Martell says that retention is the proxy to making revenue.

There’s a lot of reasons to cancel a product subscription, but the ‘right’ customers aren’t constantly on the verge of leaving.

If they’re finding value in your product, it takes a big reason for them to cancel their accounts.

  • Did you lose your influencer?
  • Are they low on cash?
  • Did their tech stack change?
  • Are they getting a massive discount on another product?
  • Is there a vastly superior product out there?

Again, you want customers to stay for the right reasons, but if your customers are always on the verge of cancelling, you don’t fully have product-market fit.

9. They purchase for the right reasons

One thing I like to do when a new customer buys is what is called negative selling. I try to convince them that the solution is not good for them.

The reaction is a quick window into their buying process. Why are they buying from you?

Loopio is a platform to help sales teams and businesses manage their RFP responses.

When I was interviewing their CEO Zakir Hemraj, he explained that, early on, they focused on providing exceptional services around their product.

Since they were building a product company, not a service, they wanted to make sure that their customers were buying because of the product.

If customers had been passionate about the services they were providing, then that wouldn’t have been an accurate representation of product-market fit.

There’s a lot of different reasons why customers buy (to save time, to look good, to make money, to save money), but not all of these reasons are « scalable ».

You want the value of your product to be the reason of purchase.

10. If you’re targeting the right customers some of them will become advocates

Useful products create advocates, and advocates “sell” products. This means lower costs of acquisition, greater exposure and a better feedback loop.

There’s a lot of reason why your business should prioritize ‘advocates’.

The most common way to identify advocates is through Net Promoter Score (NPS) surveys.

NPS surveys ask one simple question ‘How likely would you be to recommend our product to a friend or colleague?’ with a scale from 0 to 10.

Respondents answering:

  • 9 and 10 are promoters; your advocates.
  • 7 and 8 are passives; users who are not fully convinced.
  • And 0s to 6s are detractors, dissatisfied with the product.

You can often ask “Why?” as a followup question. This helps inform your marketing messaging, positioning and even your product backlog. It can be very powerful if the data is well segmented.

Atlassian, for example, uses customer NPS to find growth opportunities within their user base. How else can you satisfy promoters?

Again, with surveys like these, saying you’d recommend a product and doing so is not always the same thing.

So, how does it look? How close are you to targeting the right customers?

The Guide to Crossing the Chasm for SaaS Startups

I’m creating the Find Your Target Market video course to help answer one of the most common questions I get from entrepreneurs: how do I find the right customers for my product?

As a founder in the early days, you take what you can get.

Maybe the businesses you serve don’t look like the businesses you want to serve. Maybe the people that get the most value from your product are not the ones you expected. All and all, the early days are often more about survival than programmatic growth.

But when it comes to Crossing the Chasm and taking your business to the next level, your approach has to change. Organic growth no longer cuts it.

Crossing the Chasm for SaaS Startups

The first step to crossing the Chasm for SaaS businesses is to realize where your business currently stands. Is your product offering mostly appealing to early adopters (more on them here)?

Crossing the Chasm for SaaS Startups
Crossing the Chasm for SaaS Businesses

If so, you have to understand that early adopters represent, at most, 16% of the market.

By delaying honing in on a target market and crossing the Chasm, you’re effectively limiting the size of your market (even though it might feel like you’re doing the exact opposite).

That’s why growth slows down; what used to work eventually stops working. Your real market lays across the Chasm.

At this point, your future customers are either unaware of their problem, or they’ve just not started to look for a solution.

They have the dollars – the early majority represents 34% of the market – but they’re looking for a risk-less investment. Can your business provide that?

To cross the Chasm in SaaS, you have to find your niche – your beachhead – that initial customer segment and product differentiation combination that enables you to beat more established, mature competitors with a (potentially) more basic solution.

How to Find your Best Customers

The challenge – and where a lot of entrepreneurs struggle – is in figuring out whether you’re already targeting the right customers or whether your best target market has yet to be found.

Signs that you’re targeting the right customers include:

  • They look like the people you’re trying to target.
  • They open your emails, texts and answer your phone calls.
  • They’re willing to help.
  • They’re not waiting for the ‘next feature’ to start using your product.
  • They would be disappointed if they could no longer use your product.
  • They don’t need to be tricked into buying.
  • They’re not on the verge of cancelling their accounts.
  • They purchase for the right reasons.
  • Some of them have become advocates for your business.

Now, you might only have a few of those (hint: you can find more) or don’t have any (hint: you can find some). Already, you want to figure out whether you need to look inward or outward to find your target market.

What Makes a Great Customer?

Entrepreneur and consultant Lincoln Murphy talks about the 7 criteria that define an ‘ideal customer’. He says of ideal customers:

  • They’re ready.
  • They’re willing.
  • They’re able.
  • They can be made successful.
  • It’s cost-effective to acquire them.
  • There’s ascension potential.
  • There’s the potential for advocacy.

There’s two ways of approaching finding your beachhead.

  1. If you know which customers are happiest, most engaged or get the most outcome out of your product, you can decide to zoom in and double down on that customer segment.
  2. If you don’t think you’ve found those customers or you’re not sure they’re the best fit for your growth strategy, you can decide to zoom out and do what’s called a customer segment pivot.

To avoid leaving money on the table and missing on bigger opportunities, I recommend looking both inward and outward.

How to Analyze your Current Customers

To find your best customers from your customer base, you’ll codify your definition of what a great customer is and segment your customer base using that definition.

You want to create 3 different buckets:

  1. Your best customers – The first percent atop your ranking.
  2. The next best – Customers ranked within the first 2 to 10%.
  3. Your worst customers – the last 10% at the bottom of your list.

The top percent represents your “fans”; it’s the customers who are most likely to become advocates for your business.

The next 10% gives you a good comparison point. It can help reveal some of the low hanging fruits for your business.

The last 10% – and this one is optional – helps you define who you shouldn’t be targeting (in other words, they’re your anti-personas).

Speaking with the top two tiers, you’ll want to understand the value they get from using your product to better define your ideal customer target.

Armed with this information, you can start exploring other segments to expand your analysis.

How to Evaluate Potential Customer Segments

In the books Crossing the Chasm and Inside the Tornado, Geoffrey Moore recommends to evaluate beachhead markets using the following criteria:

  1. Is it large enough?
  2. Can you access it easily?
  3. Do you have a compelling value proposition?
  4. Do you already have the whole product?
  5. Are there competitors?
  6. Can you leverage a leadership position?
  7. Does it align with your team or your personal interests?

Those are 7 criteria, but I could have easily added another 10.

You’ll want to do what we call a multi-criteria analysis – comparing the different segments against criteria you’ve selected.

Once you’ve identified 3 or 4 segments you’d like to explore, you’ll organize short series of 5 interviews.

With these customer interviews, you’ll want to figure out:

  1. If the problem solved by your product exists in the target organization? How painful the problem really is? And whether they’re actively trying to solve the problem?
  2. If the company has budget? And if it’s the type of solution they could buy?
  3. What kind of impact solving this problem could have on their business?

You can use the Lean B2B methodology to conduct customer interviews and validate market fit within those customer segments.

With all the information collected, you’ll be able to make an informed decision in selecting your beachhead market. Beware though, selecting your company’s initial beachhead market can make or break your business.

How to Make Your Business Look the Part

Limiting the size of your total addressable market is counter-intuitive, but a niche market is the key to the mass market.

Once you’ve made the decision to focus on a market, you’ll want to refocus your business to truly dominate the market. This means:

  • Aligning internal and external messaging to make it clear that you’re intent on winning this market.
  • Switching to pro-active growth strategies to acquire as many businesses as possible within your target market.
  • Crafting case studies in the very niche you’re targeting to convince the early majority that your solution can best meet their needs.

Crossing the Chasm for SaaS Businesses is Challenging

You chose a beachhead. Aligned internal stakeholders. Repositioned the business and external messaging. Wrote amazing case studies. Tightened your market fit. Switched to a proactive growth model. And business is booming.

Don’t stop.

It takes discipline to expand gradually.

When the timing’s right – and you’ve captured the largest market share within your beachhead – you’ll expand into adjacent market segments.

At that point, you’ll truly know that your business has crossed the Chasm.

We cover this material and much much more in the Find Your Target Market video course (coming later this Spring). Sign up to get notified.

12+ Conferences for B2B Entrepreneurs Looking to Grow Faster in 2018

It’s often difficult for B2B entrepreneurs to see the forest for the trees. They get consumed by a business problem and can’t seem to find a solution.

Conferences provide a great opportunity to take a step back. Interacting with other B2B entrepreneurs or seasoned executives can help generate fresh ideas, opportunities and a renewed mindset to accelerate growth.

Sometimes, seeing what’s out there is all you need to find a solution.

To help founders find the best events for their needs, I put together a list of the best conferences in B2B:

General-Topic Conferences for B2B entrepreneurs

  • SaaStr – February 6-8, 2018 / San Francisco
    Founded by Jason Lemkin 4 years ago, SaaStr Annual brings together over 10,000 SaaS Founders, VCs and Executives. It’s a good place to network, strike deals, and discuss SaaS business, fundraising, enterprise sales, customer success and metrics.
  • Dreamforce – September 25-28, 2018 / San Francisco
    Dreamforce is Salesforce’s annual event. It was one of the first B2B conferences and it’s, by far, the largest event with nearly 200,000 participants, 3,000 sessions and a lot of corporate money. It’s a great place to make deals.
  • SaaStock – September 15–17, 2018 / Dublin, Ireland
    The European SaaStr. It covers a lot of the similar topics (Sales, Customer Success, Growth and Funding) with a lot of the same speakers, but it’s an excellent opportunity to get acquainted with the best European founders and investors.
  • Revenue Summit – March 1, 2018 / San Francisco
    Revenue Summit was started by SalesHacker. It focuses on sales, marketing and the intersection between the two disciplines. With a strong emphasis on processes, account management and sales tech, it’s a good place to go a bit deeper into B2B sales.
  • Marketing Nation Summit – April 29-May 2, 2018 / San Francisco
    Marketo’s conference covers all things marketing with a strong focus on the B2B space. It’s an interesting alternative to Salesforce’s conference especially if your startup is selling to marketing executives.
  • Business of Software – October 1-3, 2018 / Boston
    The Business of Software conference focuses on creating quality networking opportunities and teaching participants how to build better products and be better B2C or B2B entrepreneurs. This year, the BoS conference returns for a 12th time.
  • Inbound – September 4-7, 2018 / Boston
    Hubspot’s conference attracts thousands of sales / marketing professionals. It’s a great place to network with almost 20k attendees and learn about content marketing, marketing automation and account-based selling. The conference often features some of the foremost leaders in B2B.
  • B2B Rocks – June 1, 2018 / Paris, France
    B2B Rocks organizes events in Paris, France and Sydney, Australia. It attracts different crowds with strong emphasis on local expertise. At the event in Paris, you’ll learn tactics to grow your B2B SaaS product.
  • Hyper-Growth – September 4 / Boston & September 24, 2018 / San Francisco
    Hyper-Growth is Drift’s conference. The first event is held in Boston the first day of the Inbound conference and the second is held later in San Francisco. Hyper-Growth has a stronger focus on sales and customer-centricity than the Inbound conference.

B2B Conferences Around Specific Challenges

Many B2B companies have created conferences around their customers’ business challenges. If you share these challenges, or wish to dive deeper into topics like customer success or inside sales, great conferences are available for you or the people on your team:

Customer Success

B2B Content Marketing

Industry Events for B2B entrepreneurs

Events and conferences are shortcuts to target markets. To speed up product-market validation or increase your growth rate, you can attend your customers’ events or visit your customers’ watering hole.

It might be the HR Technology Expo if you’re targeting HR professionals or the DIA 2018 Global Annual Meeting if you market to companies in pharma. Networking with your target market is a great way to create new opportunities.

Conferences are all about networking opportunities. By asking yourself, what kind of professionals the event targets and seeing how that fits within your strategy, you’ll make sure to always have a positive return on investment when you attend a conference.

Introducing the Lean B2B Course

I’ve been thinking about creating a 2nd edition of Lean B2B for years.

The content’s there. The learnings are there. But I’ve been afraid of breaking it; breaking something that’s already working.

I think I came up with a solution.

Today marks the launch of the Lean B2B Course; 5 hours of high-quality video lessons expanding on the content of the book.

The course dives deeper into ways to manage runway, find early adopters, connect with decision-makers, conduct interviews, and reach product-market fit. The complete course structure is available below.

It also includes battle-tested worksheets and templates, and access to the all-new Monthly Virtual Office Hours. You can check out the Lean B2B Course right here.

The Lean B2B Course Content

It’s a lot of content, but you can complete it at your own pace. Just dive in whenever you have time!

  1. Introduction
  2. Why B2B?
  3. What Makes B2B Different?
  4. How Much Time Do I Need?
  5. Do I Need to Quit My Job?
  6. Where It Starts
  7. Choosing a Market
  8. Finding Problems and Opportunities that Matter
  9. How to Find Early Adopters
  10. How to Identify Early Advocates
  11. Selecting Early Adopters
  12. Leveraging Domain Credibility & Visibility
  13. Contacting Early Adopters
  14. How to Get Customer Interviews with Cold Emails
  15. Why Interviews?
  16. The Code of Conduct for Customer Interviews
  17. Customer Discovery Interview Questions
  18. Conducting Problem Interviews
  19. Analyzing the Results
  20. Problem-Solution Fit
  21. Creating a Minimum Viable Product
  22. Mapping the Buying Influencers
  23. Preparing Your Pitch
  24. Reengaging Prospects
  25. Conducting Solution Interviews
  26. How to Deal With Your First Purchase
  27. What to Do if the Prospect Doesn’t Buy?
  28. Product-Market Fit
  29. To Pivot or Not to Pivot?
  30. What Happened With the Business?
  31. Common Challenges
  32. Speeding up Product-Market Validation
  33. Conclusion

How to Get Customer Interviews with Cold Emails

You managed to find early adopters for your startup, now what?

You can use the good ol’ telephone to reach out, connect via InMail (LinkedIn), direct messages (Twitter) or through Quora’s messaging system, but chances are, email will be your best bet.

Depending on how much research you do, the quality of your email template and the industry you target, you may be able to convert as many as 30% of your cold emails into interviews. To help you achieve those results, I created the following guide.

Here’s How I Get Customer Interviews with Cold Emails:

Step 1: Get their Email Addresses

Gone are the days trying to guess email patterns on Google. With dozens of tools at your disposal, finding email addresses shouldn’t be a challenge anymore.

Among the tools available, I strongly recommend Clearbit Connect. Not only is it a nice alternative to LinkedIn, it’s fast, accurate (97% accuracy according to YesWare research), and gives you 100 free credits per email account. Think about that last point a bit. ;-)

Here’s how I use Clearbit Connect to find email addresses:

Step 2: Research the Prospects

This is where you’ll spend most of your time.

You need to personalize your emails in order to establish rapport. To do that, you’ll have to spend time researching prospects one by one. You can’t skip this step; it’s what separates your emails from the spammers’.

At a minimum, you’ll want to add the prospect’s first name and make it visible from the ledger (see image below).

Get Customer Interviews with Cold Emails - Email Ledgers

You’ll also want to add a personal note showing that you’ve done your research. Here are a few things you can comment on ranked by the order of what seems to work best:

  1. Personal success (job promotion, award, achievement, etc)
  2. Company news (related to them, their work function or a significant company achievement)
  3. A shared experience, acquaintance, hobby or interest (ideally, not something about work)
  4. Recent posts (on LinkedIn, Medium or on their blog)
  5. Recent LinkedIn or Twitter updates

You can decide to add more personalization, but don’t overdo it. According to research by the team at Growbots, personalization follows a law of diminishing return. In other words, adding more personalization doesn’t necessarily increase response rate; it can actually make your emails feel creepy.

Once you’ve found your style, you can decide to outsource some of the research to workers on Upwork or Fiverr.

Step 3: Write the Email

Nailing the email script makes a huge difference in your response rate. You have to be humble and remember that you need their help. To be successful, keep in mind:

  • It’s about them – You need to speak to their ego and make them feel smart and esteemed. It’s about their expertise and interests and it’s on their terms. Use compliments. Make the interaction as positive as possible.
  • Their time is important – It has to sound like it’s a short meeting. Twenty minutes is all you need. Any longer than that and you’re wasting their time.
  • You’re not selling – You have to build a relationship before you attempt to sell anything. Be informal, helpful and easy-going. Formal emails create doubts in the prospect’s mind.
  • It’s got to connect – The more certainty you have that the problem is – or was at some point – on their radar, the more likely you are to get a reply. You want to give them a reason why spending 20 minutes with you will be worth their time. It has to feel like you’re going to be of value to them.

To start, use a broadly defined problem. A looser problem in the subject line and in the email copy has a higher likelihood of getting people excited. Prospects will build their own perceptions of the problem and invent the product in their minds.

Here’s a sample script I’ve used before:

Subject: International growth

Hi Max,

I enjoyed your 2-part series on employee retention. I had tried to find a job with startups in Hong Kong when I was living there and I know it’s not easy.

I’m contacting you because I have a software company trying to improve how businesses expand internationally.

I’m not looking to sell anything, but since you have so much expertise with international growth, I’d love to get your input to make sure we don’t build the wrong thing.

Can I schedule a quick call with you next week? Monday or Tuesday perhaps?

Let me know, thank you.


Keep it short. Make it easy to respond to.

Step 4: Send the Emails

You can decide to send all emails manually, but that’s a lot of work, and it’s not very value-added work (you have better things to do!). In the past, I’ve used Mailchimp, but without a paid subscription, it’s very hard to send truly plain emails.

I discovered Streak through Alex Berman, who knows a lot more about cold emailing than I do.

Basically, Streak is a CRM that sits inside Gmail. It allows you to send mass personalized emails, manage pipelines, track replies, send followups and schedule email delivery from your inbox.

Here’s how I use it to send emails:

Before hitting send, I recommend setting up a new email account. Some of your emails might get marked as spam. The last thing you want is to have your main email account in the spam folder. It happened to me before, and it can be quite painful.

Schedule your emails carefully. Ask yourself: where are my prospects located? At what time do they get up? Go to work? When are they likely to have time to look at my email?

Start slow, don’t send too many emails (you need time to reply), make revisions to your script, and followup.

Getting customer interviews with cold emails is a learning process. Start from the top and practice.

More on Cold Emails: