How do you prioritize your B2B marketing initiatives? First, do a gut check – what's the status of your current marketing function? Then, ask how to...
BSMS 16: How do you verify your ICP and positioning?
In today's longer-than-usual episode, we talk about how account-based marketing can help test your go-to-market hypotheses. In episodes 14 and 15, we talked about sizing our niche and positioning ourselves within it. Once that's done it's time to check if our positioning, messaging, ICP, and personas are correct by putting it all to the test.
Step 1 is making a list of companies that fit your ICP. This could be buying a third-party one or building your own. Step 2 is finding a list of contacts that fit your persona within that list of companies. Step 3 is knocking on their door. That means meeting them where they live (e.g. their email or LinkedIn) and engaging them with helpful content that resonates with them. In doing so, you also get a better idea of the size of your niche, narrowing down your SAM and SOM (Serviceable Obtainable Market).
An important part of ABM is patience and persistence. Results can manifest in a few quarters or several months after your last message to a contact.
Hello, welcome to episode 16 of B2B SaaS Marketing Snacks. This one is not so snack sized. It's the longest episode we've ever had, but I also think it's the best. So definitely, if you're into the 15 minute kind of thing, maybe do a 15 minute session and then listen to it again for 15 minutes for another session. I do think it's worth it though. Stijn and I had a really good conversation on this one. We talked about a lot of things, closing out the conversation from episode 14 and 15. In episode 14 we talked about sizing up your market and defining your ICP. And then in 15, and we talked about positioning and messaging for that specific niche.
So this episode we're talking about now that you have your hypothesis in place, you have to put some skin in the game and go test your hypothesis. So usually a lot of companies will launch a product and verify their positioning and messaging with a hundred thousand in ad spend to go test which ones are most effective. But if you don't have that same level of budget or the ability to go run those tests, you can run go to market experiments using ABM, which is account based marketing or outbound, or just outbound email, outbound LinkedIn messaging. So, yeah, that is the crux of the content today.
And we went on a couple of tangents about chat bots and making sure that when you start things like this, when you start go-to-market experiments and run outbound, any kind of marketing program, sticking with it, because a lot of companies shut them down too quickly before they see results. And what you don't see is after three, four quarters, these efforts compound. So if you shut things down too quickly, you won't see those benefits. So that's what we talk about today. I think it's a really good one. Thanks for being patient for the last two months, while we've been working hard on a lot of stuff in the background. Appreciate you. And yeah, let's jump into it.
I have found ABM, account-based marketing, to be a great way to test if you have found the right niche, or if you have to make it either smaller or bigger. What account-based marketing really is, it is the test to do you actually understand the real definition of your ICP good enough to be able to execute against it. Are you now able to turn your relatively theoretical ICP, and not completely theoretical, it's usually based on your existing customer base, where you found success. But are you able to turn that into something more programmatic where you understand what the common attributes are, what do these customers typically look like, and how do you find more, where do you find more? And ABM, account-based marketing, starts, of course, with building lists. Building a list of those companies that fit those ICP criteria.
And then a very important second step that we at Kalungi customized a little bit and how do you now find the right people at these companies to market to according to a relatively complex B2B buyer's journey. There's more than one persona involved. So we did some work there. So I think ABM is a great test. When you think of the next test you do with ABM... So first is the ICP. Useful, usable. And the next of course, is the market that you now just defined as your ICP big enough? Because when you do that list building, if you find out, "Hey, what are the companies or organizations that fit that ICP? How many people can we actually find in the right personas that are going to be worth reaching out to?"
Now you can also answer the question, what part of that market that you have defined, let's say out of the total addressable market, the market that you're playing in as a company, what part of the market is serviceable by you? That's really the question you answer when you define your ICP, you're saying, "Hey, if we think about our superpowers, our value proposition, this part of the market is what we'd like to serve as the ICP," that total addressable market now becomes the total serviceable part of that addressable market, often called the SAM, serviceable addressable market. And when you then do that ABM effort and you start building the actual list and you're trying to find out how many contacts are there that we can find within these organizations, how many of those can we find that actually have reliable contact information, like email addresses that work?
Now you actually have a starting point of what's called your SOM here, your serviceable and obtainable market. That's more of a realistic foundation for also your planning efforts. So that's, I think, Mike, starting to answer that question, I think, that you started with. How big should your niche be? Is it big enough, et cetera. Because when you now have this effort through an ABM approach to test the reality of your assumptions, you're starting to answer that question, "Is this niche going to be big enough for me?"
So here's another question. So when you talk about testing your niche, you're kind of using ABM as a means to test your value prop and your messaging and also maybe what you're putting out in the world. Probably your brand, your existing content, and things like that. What do you actually need before you can start reaching out to people so that you're not just saying, "Hey, here's a demo. Request it."
I think same answer, basically, but now you're talking about the third step in ABM. The first is building your list of companies, the second a list of contacts according to the personas you just defined. The third is how do I now communicate my value proposition when they actually pick up the phone, when they click on the email, when they open the door? Because with ABM, you're basically going to knock on a couple of doors, and when they open, you need to be ready to pitch, to ask the right questions, to answer the right questions, to profile yourself in a way that's meaningful for this prospect. What's interesting with ABM, you know by definition that these people are not waiting for your call. They were not thinking they had a problem or a need because if they would, they would have searched something on Google and hopefully found you. That will be more of an inbound lead. But by definition they're not waiting for your phone call.
So when they open the door, you have to be ready to, in the most meaningful way, because they are part of your ideal customer profile. Hopefully your value prop is going to resonate with them. You're going to have things to share that are meaningful for them because you've done the hard work of making sure they fit that ideal customer profile, then they're likely to be able to understand the challenges that you're going to share with them. "Hey, have you ever encountered this problem? Are you struggling with X, Y, or Z?" And that's, I think, that first step into testing also whether your messaging and your value prop actually resonates. It's another great, I think, testament to are you in the right niche or not? Because if you can reach the people who you have defined as that ideal customer profile, but your messaging and your value prop doesn't resonate, then maybe you're not in the right niche. Maybe you have not reached product market fit yet.
That's a good note about the product market fit as well. I think there's an important distinction that needs to be made when you're doing outbound too, is make a note of what level of awareness your audience is at. Because I think if you're in a market where you have competitors, it's a well-known market, let's say for chat bots. People know what a chatbot is for the most part. I think it's a pretty widely adopted solution, piece of software, a tool. But if you're-
Yeah, if you're a software company and you don't have a chat bot on your website, you need to do that. Absolutely.
Right. And people understand what the problem is, what the solutions are, and some of the brands in that play in that space. So essentially you're going into a category that's known, and you're trying to differentiate yourself probably based on price or features. If you're building software for something that might not exist already, you're solving a problem that is not answered by tools that are on the market, you have to adjust the way that you reach out to people and the value that you're adding and not go straight into the features-benefits talk. Because if somebody is not even aware that they really have a problem, those things won't land.
So I was wondering, I know that you talk about jobs to be done and that kind of framework, and I was wondering if you had any thoughts on specifically when you would use features versus benefits versus jobs to be done, and if there's any place where each of those fits into the equation in ABM, or if it's just you go off of what you think what stage of awareness your prospects are at, based on the level of maturity that your category and product is at? I know that's a lot of different variables there, but wondering if you had any thoughts there.
Great point. And I like that you mentioned the question, are you trying to play in an existing category that is already defined or are you creating a new category? It's a very important differentiation. If you are in an existing category... And by the way, an easy way to find out is, if you're a software company, a B2B software company, if there's a Capterra category or G2 Crowd or Software Advice, one of those websites that helps the customers find the the various options, then the category is basically established. And playing in that field, which is not, by the way, I think, what you would do when you would try to nail a niche, because now you're more fighting for market share in an existing category.
But that's a great first question, because if you're trying to do that, that warrants a very different approach, then you have to compete on things that are maybe more established purchasing criteria. Price is one of those. Features that you check. Things like that. But ideally when you're trying to nail an issue, you don't want to go there, so you want to check if that category is already well-defined, well-established and then maybe you want to change that a little bit. You want to say, "Hey, but I'm not going to just play in that category that's already as well-defined. I'm going to either stake out a part of that market and make it more explicit about a very specific problem that only I can solve." You're creating a niche, maybe, within an existing product category. Or you're creating a new product category.
If you're doing that, then you're right, Mike, education and having your prospects that you're doing marketing to ABM, for example, first start that journey with you, as in they need to realize there is actually a problem and we'd like to say they have to answer the question why should they change? Why should they come out of a natural state of inertia? That is really a different problem, and it would be a different type of messaging that you would deploy than when you're in an existing category where the question is deeper in the funnel. Now you're in the consideration stage of the funnel. You have to answer the question why you? Why someone should change is a very different question versus why they should do that with you, and understanding that before you start developing your messaging and in this case, your ABM strategy is really important. Can I just... You just brought up online chat. I have to ramble a little bit on that, Mike.
Go for it.
So if you're a software company and you don't have online chat on your website... And online chat could be... HubSpot has a great one, Drift, Olark. There's many, I think, out there. LiveChat. If you don't, it is the equivalent of you having a store with a retail storefront and you're having basically someone in your store, you have a clerk behind the counter, somebody who's working in the store, but then in front of the door, the door is locked. You have the closed sign still up. So people walk by your window and they see beautiful products they would love to buy, they'd love to walk into the store but they try the door and the door's locked. That for me is the equivalent of a software company, a modern software company, not having online chat enabled on their website.
And there are many reasons for people... They say, "Oh, this is why I don't have it enabled, because either I don't have people who can answer the chat, I don't have the capacity, or I don't want customer service questions to be asked to maybe someone who's more in a sales function who is behind the chat." And guess what, if those are the challenges, you need to go fix those. Because first of all, if customers come to your website, existing customer with support questions with customer service, you also want to have those conversations. So yeah, maybe the person who's manning or the woman behind the online chat has to hand them off to someone else. I think that's fine, because the last thing you want to be doing is basically shut your door to those conversations.
And the second, most of these online chat tools have great answer bots, or even if you cannot service a chat bot on your website 24/7, you can at least have it there and do it in more of an offline fashion when there's nobody available to engage. But in the end, when someone goes to your website, they're knocking on your door and they want to talk with you. You definitely want to open that door open with online chat.
All right, so I wanted to also jump in and make one quick additional note here. In many cases, if you're a really small company, you're just getting off the ground and you really don't have the capacity to have somebody sitting on the back end of a live chat on your website. The other thing that you can do is a lot of the tools will allow you to set up decision trees and route questions. So let's say somebody comes to the site, they can engage with you and say, "Hey, my name is blah blah blah," and you can basically present them with options that let them choose where they want to go next. Do you want support? Do you have a question about X, Y, Z? Do you have a question about pricing? Do you want to talk to a human?
And then based on whatever their response is, you can then give them an automated response as well, or send them to a section on your website. So much of this is just collecting data. Understanding what are the questions that people ask frequently, and then to quell some of it, you can also just create content that answers those questions. So if a bunch of people are coming in and asking about pricing, go build a pricing page. And even if you're not willing to share your pricing because you're a big enterprise software product and so much has to be customized out, that's fine, but just set the expectation. Give them somewhere to go or say, "Hey, we usually have these conversations in person." Set the expectation that someone's going to follow up in a few hours, collect their email address. That's fine too, but there just has to be somewhere for those requests to go so they don't just die out in the open. Give them somewhere to ask those questions. That's the main point here.
Sorry for the rant, Mike, but I...
No, it's a good point. I saw something, I want to say it was on Twitter, from someone that I follow, the other day, and they had an interesting way of putting it. They basically said if your AE's calendar is empty, you should be taking every conversation, every meeting, trying to fill the calendar. If their calendar is full, that's when you get to be a little bit more selective about who gets a meeting on the calendar. So especially if you're young and you're just getting your functions started, having an open avenue for somebody to ask you questions is a goldmine because it starts those conversations and it gets you more at bats so you just have more opportunity to bring people into your funnel. So 100%.
Can I go back a little bit, kind of backtrack on us? So earlier you said you were talking about Capterra and it might not be worth showing up on Capterra if you are trying to niche down. And I wanted to challenge that a little bit, because I think if you're... Let's say you're in a category and there are some incumbents. They're giant companies that have a solution for a well-known problem. People know what the solution is and how it solves their problem, but they don't focus on any particular vertical or subset of that industry. I still think it's valuable to show up where they show up, especially in terms of reviews, because of the social proof aspect of it.
If you're doing something like ABM and you're new in the market and no one's heard about you before, the first thing that I'm going to do if I get a message from somebody is I'm going to go to your website and I'm going to do some online research. What are the reviews of your product? How do you stack up against these other companies that are doing it? And even though I agree Capterra is a very wide net, so if you're focused on like CMMS for the biomed industry, showing up on Capterra is probably not going to get you a ton of people in the biomed industry, but it shows that you are a player, and if you can get a solid amount of reviews and people that say that your product is worth using and worthwhile, it just makes you look stronger.
So I think showing up in the same places that your competitors show up is important, especially if you have to prove yourself and you're getting started. So I just wanted to go back on that for a second. I think there is a distinction there. I agree it's not worth investing a ton of time in, but getting some kind of online presence up that's not just your website where there's some kind of third-party validation for you is super, super important if you're just getting started and trying to build a reputation.
I think you're 100% right, Mike. I think I have to walk back some of my comments. I think you're right. When there is a Capterra category, it is actually the right moment to say, "Okay, now I'm going to define my niche within that Capterra... Within the existing, let's call it a product category that's already defined." And you're right, that doesn't mean you shouldn't show up in that Capterra list. You still should. But now you show up there maybe with a very specific angle, saying, "Hey." Within, let's say that the category is online chat software for software companies. Then within that category where you should show up between all the other options, you can stand out by saying, "We are the only ones who do this for companies who have to deal with highly privacy sensitive information." A chat solution for maybe companies that are providing medical solutions or employee management software or something like that. And then you're still staking out a niche within that established category, but you're making it really clear why you are different from a lot of other options there. But you're right, they still should be in that category.
Okay. Moving on. So we've talked about how to size up your market, how big or small your niche should be, how to differentiate yourself and segment the market, and then also about how to potentially reach people. How long... This is a question that we probably get asked whenever we talk about ABM. How long does it take to start seeing results? Is it realistic to see that ramp very quickly, or what should people be expecting if you start standing up an ABM function?
Now you're opening up, really, the Pandora's box of ABM, of outbound in general, Mike. I think this is such an important topic. We see it all the time. We see CEOs, CMOs, owners of companies give up on outbound or ABM efforts too early. If you think of the time it takes for you to actually do the proper list building, verify the quality of that data, build the messaging, et cetera. And then do the outreach, learn from that initial outreach, do something with the data you get back here, who's opening, who's clicking, et cetera. Who's showing up for the meetings? That is one quarter easily. Then there's probably another quarter. So let's take 20-
But can't you can't you just buy a list? I mean, come on.
Yeah, you can. And I think buying a list is not necessarily a bad thing. I think there are many lists out there that you should not buy. There's a huge amount of companies who make it their business to just recycle existing lists and existing contacts. And by the way, if some of you who are listening don't know, a lot of those lists actually contain what's called spam traps, which is basically a technique used by the spam filter vendors, the Googles and the Microsofts of the world, to know if certain lists were acquired in the wrong way. And spam traps, absolutely, they're basically specific contact records, emails that are planted there to find out that you actually were buying recycled contact lists. So when you do that, it's a very tricky risk you're taking.
But Mike, you can buy good quality lists. There are good quality lists out there. If you have someone... You sponsored an event and you know that the type of people who would have signed up for that event, who would have actually attended, are really right in the niche that you're trying to nail, then buying that list is a great strategy. Typically, that will also take you a quarter. To actually acquire the list, get the data into your system, figure out if it's all actually usable, or you have to filter some things out. That's one quarter. And then I think you need another quarter to actually do the followup of the initial outreach efforts, so you'll have meetings that get scheduled. So you'll meet with the people who were on your initial outbound list. Then you'll find out whether those are the right people to meet with.
Many of them will not be, but they might know the right person who is. So now you're in the second quarter of your ABM effort and your list is starting to grow because you're going to have those meetings, and they're going to tell you, "Yeah, but I'm not the right person to speak with. You should talk with XYZ." And now you're starting to fine tune your list of personas, the quality of your data. And now you're getting to test your messaging. Because once you actually... Now you're at the end of that second quarter, you finally have the meeting with the right person who you got referred to, and now in that meeting, you're going to test your value prop and your messaging. You're going to see if it resonates. Now you're going to see after that first meeting with the right person, are you going to get the second meeting, which now gets you to do the third quarter of the year.
And now you're maybe starting to see, "Hey, this is working or it's not. I have the right ICP. I have the right messaging, the right value prop." While all this is happening, you also will have the effect that some outreach efforts will take multiple digital touches before they convert. There's a really solid proof that when you knock on doors, you need to send... Let's call this knocking on doors, but it's really sending out emails, LinkedIn connect requests, things like that. You have to do it three, four, five times before it typically converts into a reaction. And that is by design. That is because people are busy, they don't read all the email that comes in. Sometimes they miss an email.
And if they don't don't click "This is spam," or they don't tell you they don't want to hear from you anymore, then they're still in your funnel. They might react to the second or third or fourth message. So that all takes time. So before you know it, Mike, you're three quarters and maybe even four quarters. And what we see a lot is that leaders don't have that patience. So if the ABM efforts, which is typically a costly investment, it takes a lot of time and effort to do the outreach, to invest in the right data, to have the follow-up conversations. That two, three, four months in, patience is going to run thin and either the sales people or to the sales leader or to the CEO is going to say, "Well this didn't work. Let's go back to contact marketing or to the event that we sponsored last year."
And that's a real shame because doing ABM well is the ultimate way to test whether your ICP is correct, whether you understand your personas, whether you have a great value proposition and messaging to back it up. So even if it doesn't lead to a lot of MQLs within a couple of months, it will lead to a lot of new insights that will help you clean all that up. That's what I think, Mike, is important with ABM, that you stick with it long enough.
And I think also by design, even if you just get a fraction of the conversions that you would get from an inbound, they're going to be so much higher quality simply because you've already defined that... You've said these people we know are going to be a great fit, so anybody who converts here is A+. A+ lead. And you can't guarantee that same quality from an inbound perspective. It's much harder to fine tune from an inbound perspective.
Yeah, and especially most of our listeners are part of B2B SaaS companies, and if you're in it for the lifetime value of a B2B SaaS customer, then that's worth it. It's worth finding the right customer who's going to stay with you for that six, seven years period with a low churn. That really is the value of your SaaS business. Instead of getting maybe people into the inbound funnel who might sign up relatively quickly because they found you and they're already aware to have a need, but they might also churn, they might not pay you what you want them to pay. You may have to discount those prospects.
We're in football season right now, Mike, and I have some conversations with people where we compared sticking with ABM for like two, three, ideally four quarters of a year to stick with the running game in a football game. Not just one quarter or two quarters, but the third and the fourth quarter, because that's when the running game in a football game will start showing its results. In the first quarter you may not get a lot of yardage, even not in the second, but you're pounding on the defense, you're finding the holes. And once you start to wear down that defense, it's really going to pay off in the third and fourth quarter. And we think there's a lot of great analogy there with ABM, because with account-based marketing, the first quarter, the second quarter is all about verifying your ICP, the personas, the quality of your lists, the messaging, the validity of your value proposition. And that's extremely valuable in itself. Even if the leads only start flowing in the third quarter.
I love this football analogy, as you can tell, probably. Apologize for the non-sports fans out there. But when ABM gets challenged in the third, fourth month and people say, "It's not working. We're not going to get the leads." Now they go back to what I would call the Hail Mary strategy of let's just try something else, and let's try three other things. And that's like in a football game, you give up on the running game because you're not breaking through yet in the first quarter or second quarter, and now you're just going to throw that ball around again, which means you're going to risk interceptions, you're not necessarily going to get a sustainable, continuous effort that wears down your opponent. And the same a little bit when you stop with ABM.
Now you've just got to do all these, I think, guesses as to, "Hey, let's try this channel. Let's do a little bit of paid search. Let's build a little bit of content." All these other marketing channels that might work, but they're far less predictable than ABM, because with ABM, because you're so structured and focused on your ICP and testing your messaging, you can do AB test with every email you send out, with every conversation you have. It is a much better way when you're still building the foundation of your marketing to build on top of everything you learn and keep improving, than trying to do these Hail Mary passes to all these other marketing tactics that are much harder to really test and evaluate in the same way as you can do with ABM. Sorry, I'm a little bit on the ABM horse today, Mike, but I think, as people get ready for 2021, it's an important strategic choice to make. Do you want to do some of this ABM, and then are you ready to do it for the long haul, because otherwise you might as well not.
No, that's super important. And I think there's also another important note to be made here that ABM can be done at all of these different investment levels. I think one of the ways to get started very lean is to go define your ICP, build a list, find the personas, and actually just go send the LinkedIn messages and email them. That's super low investment. You just need to send the emails. There's additional things on top of that that you can do. You can start sending people things. You can get very targeted with Sendoso. You can provide air cover in terms of ads. So if you have a list with people who have their email addresses and they match with their LinkedIn profiles, you can actually target them specifically with ads.
So while you're messaging people, you can kind of... It's called air cover. Just create display ads and just put your brand in front of them. I think that's half of the battle when you're just getting started is just getting your name out there and letting people discover you on their own terms, because when you're going outbound, like Stijn, you said, people are not in buy mode. They're in leave me alone mode, get out of my LinkedIn inbox. Unless they're searching. And you will find people who are ready to say, "Yeah, I'd love to have a conversation." But most of the time they will see your message, they will let it sit, but now you have a little seed in their brain. So seven months, eight months, nine months down the road, when they're actually thinking about that problem, when they know that it's there, they're going to think about you.
And those are the investments that you're talking about right now with pounding the ground game, that you don't... That is value that has been created for you, but it just will not materialize for a while, and you have to be patient and continue... Like eight months later, follow up, say, "Hey, just checking in. Wanted to... We had this cool report that we built, an industry report, thought you might get value from it." And hey, that person might be ready to have a conversation at that point. So I think it's all about the consistency. It's all about getting the name out there in the first place.
Consistency and persistence. You're right. I think when you think of human psychology, you're building the depth in someone's mind if you keep making a real, genuine effort to help them. And of course, this is tricky when you're doing unsolicited email or unsolicited phone calls or LinkedIn requests, because people will judge you based on the genuine intentions they think you have. If you send out messages that are really thoughtful and they seem to be really matching with what someone in that audience might be looking for, then, I've seen it all the time, people will ignore you for a while... I had a lead a couple of days ago, Mike, that came in and said, "Yeah, you were spamming me last year on LinkedIn, but guess what, right now I need you, and you're the first person I called because I remembered that what you sent was actually what I need today."
And I think that happens a lot. And unless you're getting lazy and you don't put enough thought in the messages you send, and you don't have valuable content, you create great blog articles, et cetera, that people can do to do their own research, I think you should stick with it. The other thing, ABM doesn't... You touched on some things that are great, Mike, you can automate a lot. You can automate follow ups. You can do re-targeting with ads in LinkedIn and things like that. But also think very small. If you were the CEO or the founder of a company, don't outsource this to your marketing team or your agency until you've done a couple of things yourself.
If you are the founder of a company, you should know what you think is the value prop for your audience, what that ideal customer profile looks like, and you should do some of your own list building. Go on LinkedIn, et cetera, go online and find five or six people, individuals, companies who you think really fit that ICP and do your own one-on-one outreach, and test it, and see if the value prop that you're sharing, the subject line in the email, the things you share in a LinkedIn connect request, if they resonate with people. And that is the first version of ABM, doing it yourself as the founder, as the CEO.
And it takes time, it takes effort. It's not easy. But unless you're able to do that, unless you're able to articulate who your ideal customer profile is, where to find them, what your value prop is, then any other effort at scale, whether you spent money on an agency or you let your marketing team run with this, is not going to be as effective as when you initially, as the founder, CEO have verified that you understand some of these basic questions. And if you don't, if you don't have great answers there, then ABM can help you get some of those questions answered as well.