Choosing market segments on customer profitability

Tom Tunguz

Most businesses fund new initiatives including marketing and technology projects from profits. The more profits a company generates the greater their willingness to pay for services and ultimately the larger the market size for a startup. Market Cap in $B. These dollars are pulled in many directions: covering potential losses incurred through the year, remodeling, new online marketing initiatives and ideally profits.

To Generate Pristine Data, Lock Down Your Buying Group


Historically, many marketers have been in a situation where sales defines their own buying groups and practically no two salespeople define it the same. Here’s how to define your buying group: Define your total addressable market (TAM). Segment by product line.

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How to turn a first-time purchase into a high LTV customer

Chart Mogul

Successfully turning your e-commerce traffic into repeat customers with high LTV lies in segmentation and personalization. Jenna Ochoa is the Partner Marketing Manager at Justuno. Looking at the marketing funnel. Here, again, segmentation is crucial.

Your Sales Efficiency Will Probably Plummet Toward $10m ARR. Plan For It.


And often, if you are capital efficient, your marketing cost will be close to $0 at this point (you are barely spending anything to acquire most customers), and your sales costs are pretty predictable. Competition in core deals is the root cause of systemic high sales & marketing expenses.

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If You’re Building Your B2B Marketing Strategy, Start Here

Sales Hacker

For 13+ years in marketing, I’ve never seen a B2B company who’d say they don’t have a B2B marketing strategy framework or that their marketing strategy is ineffective. What Is A B2B Marketing Strategy? B2b Marketing Strategy Framework. The breadth of the market.

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Answering Readers' Questions about the Free Trial Survey

Tom Tunguz

I would have expected companies in the $1M or less in ARR to observe lower conversion rates because they are earlier in their go-to-market development. Jonathan asked: Can you share trial length by market segment? After publishing the survey last week, I received many questions.

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Outbound Sales Science: How Growlabs Went From $0 to $2.5M ARR in 6 Months

Sales Hacker

Market Segmentation combined with tailored messaging. The key to achieving explosive growth is to start by identifying your Ideal Customer Profiles (ICPs) via segmentation, reaching out to them with personalized targeted messaging while building a scalable and repeatable process.

Segmenting the SaaS Market for Sales

Tom Tunguz

The first step in developing a sales strategy is to build a robust market segmentation. I’ve used data from the US Census to develop a segmentation that reveals some surprising facts about the SMB market and may help inform your startup’s sales strategy. This large segment of businesses provides ample testing ground for product development, market fit validation and creation of word-of-mouth marketing. Payroll Segmentation.

Five ways to make your reps more productive


Can marketing help? They should see the same metrics every month, to drive their strategy in sales and marketing. Segment your reporting. As a sales leader, you’re only as good as your team, and it starts by managing a team effectively.

The Funnel is Dead. Long Live the Flywheel. With Hubspot CEO Brian Halligan (Video + Transcript)


Join Hubspot CEO Brian Halligan and NEA’s Hilarie Koplow-McAdams to explore the evolution of the marketing and sales funnel you’ve been using for decades to generate traffic and convert and leads into customers. The original concept for the company was an inbound marketing platform.

How Competition Strengthens Startups

Tom Tunguz

These startups' management teams have already proven they can develop marketing and sales competencies while bringing a product to market. The takeaway from this study shouldn’t be any new insight about whether a startups should enter markets with our without competitors.

If You Chase Two Rabbits.

Tom Tunguz

Founders often ask, when is the right time to expand geographically, add a second product or pursue another customer segment? There are now two marketing messages, two sales pitches, two press strategies, two product and engineering teams. Founders should ask whether faster growth and dominance in one market segment builds a more valuable business than smaller penetration of and slower growth in two markets.

Create a Sales Plan That Actually Works (Tips + Template)

Sales Hacker

Lastly, a sales budget plan gives you a sales forecast for a given period based on factors that could impact revenue — like industry trends and entry to a new market segment. Remember, markets and customers are in a constant state of flux. True success always starts with a plan.

A landscape of the major SaaS app stores

Point Nine Land

I believe this is an important trend to follow for SaaS founders as they have to adapt their overall strategy (from go-to-market to product decisions) to this “app store dominated” era. Observation #4: SaaS app stores seem to make more sense for the SMB and mid-market segments.

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5 Stages of the Recurring Revenue Maturity Curve


Defining the offer, experimenting with discrete market segments, testing pricing/packaging, and solidifying the business case takes place. Sales and marketing efforts are properly aligned (i.e., By: Jeff Wissink , Navint Managing Director.

Preparing For Acquisition - The Due Diligence Checklist

Cardin Partners

Preparing to sell your company requires a lot of work. Whether planned or unsolicited, when the time comes to ready the company for sale, you will be able to move much more quickly if your financial house is in already in order.

Press Release Distribution Service Frequently Asked Questions


Press Release submission for Media Coverage from sites like; Google News, Bing News, Yahoo News, Fox, NBC, ABC, CBS, AP News, Bloomberg, USA Today, Market Watch, Reuter’s and major PR Wires like; Cision Wire!

“Land, Expand, Explode: How to Win the Long-Game in SaaS” Egnyte Chief Customer Officer and Co-Founder Rajesh Ram (Video + Transcript)


And recently we raised around from Goldman Sachs in September of last year to fuel our go-to-market expansion. So what is our target market? And we said we’re not going to focus on these other segments, which is real large enterprises and also consumers.

Christoph Janz on SaaS fundraising in 2018 and how startups should use data

Chart Mogul

Whether startups should aim to dominate a niche before expanding to wider market segments. This week's episode of SaaS Open Mic features a live discussion from the Berlin edition of Mogul I/O, our event series bringing industry leaders together around the topic of sustainable growth. “I

Disruptive Innovation in SaaS by Competing with Non-Consumption

Tom Tunguz

Clay Christensen, a Harvard Business School professor, asserted in a recent interview that we understand only half of the marketing puzzle: the marketing science involved in a competitive ecosystem, when consumers are buying millions of products. In these markets, concepts like Westendorp Price Sensitivity and conjoint analyses work. But to incite disruption requires a different set of marketing skills.

Product Market Appetite vs. Product Market Fit


Others focus obsessively on market timing, looking to introduce products that they know will be needed in rapidly expanding markets where they’ll be able to reap the benefits of not just product market fit, but product market demand.

4 Things Marketing Can Learn from Product Led Growth

OpenView Labs

Product led growth (PLG) is a go-to-market strategy that relies on the product itself to drive acquisition, retention and expansion. The way software is bought and sold has changed due to the emergence of inside sales and content marketing. Marketing PLG

Do Vertical SaaS Companies Benefit from Higher Sales Efficiency?

Tom Tunguz

When writing the post Vertical SaaS Startups Require Different Go To Market Than Horizontal SaaS Companies , I realized that there is a perception on my part and perhaps more broadly that vertical SaaS companies enjoy greater sales efficiencies than horizontal SaaS companies. The marketing team concentrates their media buys to target this audience, the sales team focuses on a smaller lead list. This may be because of a greater competitive pressure within the horizontal markets.

WTF is PMF? (part 1 of 2)

The Angel VC

I’ve been fascinated by the concept of Product/Market Fit for quite some time. The reason why it’s such an interesting and important concept is that getting to Product/Market Fit (PMF) marks a critical juncture in a company’s lifecycle. What is Product/Market Fit? Marc Andreessen got more precise, saying that PMF means “being in a good market with a product that can satisfy that market”. How can Product/Market Fit be measured? pmf product/market fit

Avoiding Poor SaaS Customer Alignment

Chaotic Flow

When I’m not completely absorbed with my agile marketing software startup , I do a bit of SaaS consulting on the side. Future posts will examine the challenges of achieving SaaS customer alignment in customer acquisition, customer success and early product market fit.

Block and Tackle Product Marketing

Tom Tunguz

By that point, it was apparent that a new customer segment had emerged that wouldn’t cannibalize their existing business. The wrinkle is that Apple combines this design with superb product marketing. It’s block and tackle product marketing

Lessons from New Relic: Five Critical Steps to Scaling Enterprise (Video + Transcript)


So many of these are born digital companies and fast-growing disrupting their market space, and we love the diversity of in our customer base of both many traditional enterprises and fast-growing enterprises as well as the disruptors. Your marketing mix changes quite a bit.

A Tale of Two Go To Market Strategies

Tom Tunguz

After last week’s post, Is There a No Man’s Land in SaaS ACVs , a founder asked me to highlight some of the go to market strategies in different segments. The story behind Fleetmatics and Geotab illustrates the way two companies pursued the SMB logistics market in radically different ways, but built roughly similar sized businesses. Geotab addresses the same market as Fleetmatics. There are approximately 22 million trucks in the US.

Startup Best Practices 24 - Marketing Your Product with Novel Framing to Maximize Sales Success

Tom Tunguz

At this point, the critical marketing imperative is to start a conversation with a receptive buyer, and do it thousands of times per year. I met a master software marketer last week, and he shared some of his wisdom. This master marketer pointed to our language. Within in a market, competitors often use the same language to describe their products. The rest of the market described their displays in pixels (e.g.,

Aligning SaaS Customer Acquisition

Chaotic Flow

Then, there’s the marketing. In my own SaaS experience, be it scaling a sales and marketing team, consulting for SaaS startups or bootstrapping my agile marketing SaaS, Markodojo , I find myself returning to a common theme that always cuts through the complexity: SaaS customer alignment.

One of the Hardest Things to Do in Sales

Tom Tunguz

Focusing on one customer segment, the ideal customer profile, reinforces the startup’s strength. Even if you’ve researched the market ahead of building a product, developed an ideal customer profile (ICP), the challenge arrives when you take the product to market. A unexpected surge of interest from a customer type raises the question, “Should we serve that market segment too?”

SaaS Metrics Refresher #9: Segmentation

Chart Mogul

Segmentation in SaaS may seem like a basic analytics practice, but it's actually a critical part of your growth strategy that can help you understand customers and drive deliberate growth. What is segmentation? “Audience segmentation isn’t a new concept.

Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics

Tom Tunguz

Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time.

4 Features Your Digital Customer Engagement Platform Must Have


Success in the customer-centered economy can be a lot to wrap your arms around, especially for large enterprises with multiple brands or complex market segments. A quality customer engagement platform helps you personalize communication with different customer segments.

How to retain more users with value-based onboarding

Inside Intercom

Your product may do different jobs for different market segments. This minimum viable onboarding flow will vary by customer segment and use case, so make sure you customize onboarding for each segment.

The Funnel is Dead. Long Live the Flywheel. With Hubspot CEO Brian Halligan (Video + Transcript)


Join Hubspot CEO Brian Halligan and NEA’s Hilarie Koplow-McAdams to explore the evolution of the marketing and sales funnel you’ve been using for decades to generate traffic and convert and leads into customers. The original concept for the company was an inbound marketing platform.

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Startup Management Best Practices #3 : How to Structure a Sales and Marketing Team

Tom Tunguz

The sales and marketing teams of a startup are responsible for this. There are many ways to structure sales and marketing teams. The diagram above outlines a sales and marketing team structure that I’ve observed across many startups. The chart above shows three roles: Marketing, SDR/ADR (Sales Development Rep/Account Development Rep), AE (Account Executive). Marketing teams generate Marketing Qualified Leads through content marketing and lifecycle marketing.

Vertical SaaS Startups Require Different Go To Market than Horizontal SaaS Companies

Tom Tunguz

Vertical SaaS requires a different go-to-market than horizontal SaaS companies. They trade a more narrow customer base and consequent reduction in market size for a competitive advantage in that market segment. Today, Veeva’s market cap exceeds $3.3B. Similar large market cap examples exist in real estate (CoStar - $5.8B), insurance (Guidewire - $3.7B), logistics (Fleetmatics - $1.8B) among other categories.

“7 Tips and Tricks to having happy customers at Scale” New Relic EVP, Roger Scott (Video + Transcript)


We could see the market opportunity there, but nothing as big as we’ve been able to realize, now, as a company. We started out in the commercial SMB mid-market space. And that brand led to viral adoption, whether it was in the commercial segment or the enterprise segment.

Is Your Customer Segmentation Too Basic?


The concept of segmenting customers, and building an account coverage model based on these segments, is not a new idea. At Customer Imperative, we often see early stage SaaS companies choose the customer’s ARR value as the primary segmentation metric. Needs-based segmentation.

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4 Steps to Create a Buyer Persona Sales Reps Will Use (Template Included)

Sales Hacker

I’ve seen it time and time again… A company’s marketing team dedicates their already stretched resources to develop strong, accurate buyer personas — but no one actually uses it. Sales & Marketing Articles

Data Governance: Salesforce Objects in a Lead-to-Cash Process

Sales Hacker

Firmographic data is relevant for customer segmentation, with information about geographic area, number of employees, annual revenue, and industry. RELATED: If You’re Building Your B2B Marketing Strategy, Start Here. Reliable data is everything….

Building a Customer-Centric Company: Five Best Practices for Growing to Multi-Digit ARR with Segment and Aloglia (Video + Transcript)


Join Algolia CEO Nicolas Dessaigne and Segment VP of Marketing Hollie Wegman for a session discussing best practices for growing your ARR in your SaaS. Hollie Wegman, VP of Marketing @Segment. I think sometimes because I’m a marketer, I look at marketing a lot.