What works the best for big sales in IT - Paris Childress | SaaS Founders Podcast

Hi everyone. I'm Dima Rodenko, the founder of SaaS Founders Community, helping founders of software development and B2B SaaS companies to find newbie clients. We are linked in and today we are together with Paris Childres. Hi, Paris.

Hi. Nice, Nice to be here. Dimitro, thanks for the invite.

Yeah, thank you too. So Paris is the founder and CEO at HopOnline. He is podcaster and ex Googler and he helps B2B get more leads and do better growth marketing. So thank you, Paris for taking your time. And let's talk about the things that B2B SaaS founders are very, let's say, excited about. So what's on your perspective? We see that the market is changing, right? And comparing even to two years before one year ago, it's another amount of money available, let's say, on the market among let's say corporate business, or let's say small and medium enterprises. How do you perceive these changes? What do you see what has changed and what remained the same? How do you see that from your perspective?

Yeah, sure. I think that you're spot on in your assessment of what has changed in the market. Generally speaking, if we look at the last few years, SaaS business has had a huge boom during COVID and there was a really massive demand for a lot of the products and services offered by SaaS companies as a result of that, in combination with low interest rates, money was very, very freely available, valuations were very high, and there was a. There was a very, very strong imperative for growth. So there was just tons of, tons of money flowing in, a lot of money getting allocated for marketing. We benefited as a SaaS marketing agency, we benefited from that. And for the most part, that party has ended for SaaS B2B SaaS in particular post Covid, because of a combination of things. The demand for digital services did slow down after Covid, and I think even the largest tech companies like Google and Facebook and others, they also were a bit surprised by that and even had some layoffs of their own. Also, interest rates are higher and the monetary policy is getting tighter. VC money isn't flowing as freely, and the result of that is there's now much more of a focus on efficiency for marketing as opposed to pure growth for growth's sake. And that's what has changed. But what hasn't changed is still the very high expectations for growth with less money and less resources. And that is the big challenge that we see from a lot of our SaaS clients currently is that there's still that pressure from growth but with less resources, lower budgets.

So I absolutely agree with you that let's say the estimations, the expectations are high, the let's say capacities are lower. But to be, let's say on board, to be, to be on the market, we need to deliver some up to date solutions and let's say we need to prove that we are the experts and we are delivering what we promised. So I saw that you are doing a lot of stuff like you're doing CEO, pay per click, advertising, et cetera. Let's say what tools from your perspective are, let's say they remain, they, they keep on giving the same efficiency as before or it's at least they are not lowering, let's say the results. What I would say the best tools, the best audiences and where are the clients in the money and how to get them. That's the general equation.

Yeah, I'll, I'll discuss two, two channels that probably most of the listeners are investing in. Those are Google Ads, primarily Google Ads, paid search and the second would be SEO. These are two channels that I still believe can deliver very positive return on ad spend or return on investment with the right strategy and the right execution. That hasn't really changed in a long time. Now of course there's a lot of nuance and when you get into what particular industry or competitive landscape or niche that you're in. But overall Google Ads is still a phenomenal growth channel starting with paid search. And the reason of course is that you are getting in front of people with high intent who are ready to buy and they're signaling, signaling that intent by, by searching in Google. So I think that the best strategy for Google Ads and the one that we try to employ with our SaaS clients is an approach called value based bidding. So SaaS companies have this unique, they have this unique revenue model which is mostly based on monthly subscription based payments, either monthly or sometimes quarterly or annual. But you have recurring revenue and when you acquire a customer, typically you will, you have the, the future revenue for that customer is out, out there over several months or maybe years. And you try to understand over time what is the lifetime value of those new customers. That's always a good, a good idea to be tracking lifetime value. But the biggest challenge is what can you afford to pay to acquire that customer who has some sort of projected lifetime value of X over the next one year or two years or three years. And value based bidding in Google Ads allows you to import from your CRM the forecasted revenue. The forecasted lifetime value of A new customer. And by giving that information to Google you allow Google to optimize the clicks and the conversions for that sales pipeline and for maximizing the lifetime value. So there's a bidding method that's called target roas, Target return on ad spend. And ideally what you, what you really should be doing is trying to calculate the, either the annual contract value, the revenue value, or ideally the lifetime value right at the point of acquisition of a new customer and then send that via offline conversion import back to Google and allow Google to bid on a target return on ad spend. So let's say hypothetically that your either your ACV annual contract value or lifetime value may be, let's say it's a thousand dollars at the point of customer acquisition and you're willing to have. Well ideally you want to have a 3 to 1 return on ad spend, a 3x. So that means that you want to acquire that $1,000 customer for $333. So target return on ad spend would train Google using your data from your CRM to acquire those customers at that, at that price. Now that price might be dynamic. So as that price goes up and down, where that value goes up and down, Google would adjust accordingly to try to lock in that 3 to 1 LTV to CAC ratio. And as far as investors go, I think that the cac, the LTV to CAC ratio is still a very, very important metric for proving profitable growth. Okay, now that's, that's the best strategy for Google Ads. I'll let you send it back.

I would like to be more specific. For example, let's speak about high paying clients for example that afford themselves to pay 5, 10, $20,000 per month for a B2B S services. So it can be like enterprise plans or something like that. They have specific tricks because you know, there are not numerous. There are, say there are, let's say the sweetest, the sweetest clients on the market because there are not a lot of them but each of them are very valuable because they can pay a lot, have some, let's say tricks or some specific methods how to get these high, high paying clients.

Yeah, I think that digital marketing isn't as effective for the big enterprise leads. I think the best strategy there would be more of a ABM account based marketing.

Okay.

And the toolbox, there are some tools that like Zoom Info or six Sense that will give you some data. Of course they'll give you all the contact data but they'll also give you this intent data which is very important also G2 has really valuable intent data, but it allows you to reach out on a one to one personalized level with your really high, high ticket enterprise leads and prospects on the basis of intent signaling that come from these platforms. And LinkedIn Sales Navigator is another key tool in that toolbox. So I think really for that approach you still need to have a lot of digital assets, but they should be much more specific and personalized to those, those high ticket, those named accounts, those ABM accounts. And it's really a lot about monitoring their activity, let's say primarily on LinkedIn, connecting with them, engaging with them, liking and commenting on their posts and then watching for intent signals and trying to, to react accordingly. I don't think generally that like Google Ads, paid search or any other form of scalable digital marketing with paid ad campaigns is really the right approach to generate enterprise leads. I think it's, it has to be more account based marketing.

Okay. Actually when we're doing LinkedIn outreach it's most, it's like AB account based marketing for sure. But we see that we need to, let's say, cover all the fields, meaning that once they enter the digital sphere, they have our, let's say communication and linking. They have our communication in content in different areas. But also it might be interesting that they should see our communication in CEO, in SEO search engine optimization and in Google Ads as well. Right. In, in this area, how to combine it all together to make it, let's say to work it as one.

Well, by including certain named accounts in your ABM strategy, you do not exclude them from your digital marketing campaigns. Which means that still if you have a, if you have a big whale prospect and they go and do a search on Google and that triggers your ad, that's totally fine. The same with LinkedIn. If they see, if they, if they're part of a broader LinkedIn ad campaign, that's great. That can provide great air cover so to speak, for, for your ABM efforts. But really I think that the way to actually acquire them and, or to move them down the funnel is, is primarily through abm.

Abm. Okay, okay, yeah, I got it. So basically in my case we are using for ourselves about 16 lead generation channels. And one of them, of course it's like working on LinkedIn linked content, linked paid ads and of course Google paid ads and the search engine optimization as well. Right? And what I see that, you know, sometimes it works like a sequence, so they saw you at the webinar, then they connect with you on LinkedIn and then when they are becoming more mature regarding your service or my service, whatever. They see us in Google Ads and they say, yeah, now it's time to connect, now it's time to book an appointment. So I see it's like one of the parts of the sequence to be covered and maybe you have some suggestions because from our case we see that for Google Ads it's fine, the more we pay, the more we get. It's absolutely automatic. And it's like we see a good proportion of that for other channels. For LinkedIn it's the same, but for other, it can be different. But what's the right, let's say ratio for the Google Ads in that case? Because I saw that many people say, okay, if we're speaking about US market, the cost per click is absolutely huge. If you're speaking about top corporation, top banks, and especially some specific industries. And they need to invest a lot, let's say, just to be present on the first page on the, on the search results. What approach can you offer here? How to be present and not to pay a ton of money on that?

I think that LinkedIn still offers a pretty good opportunity for organic reach without needing to invest a huge budget in LinkedIn ads. And that's partially why I would strongly Recommend Also using LinkedIn Sales Navigator. I think it's around $200 per month. But because LinkedIn is still relatively generous with organic reach, you can, you can connect with people, you can build a following and you can have pretty good access and reach to that following with your posts. So LinkedIn is the one channel where I believe you can still accomplish a lot without a huge budget. I think the second channel would be YouTube. If you are, it's a great idea to invest in video content, whether that be through webinars, podcasts or other forms of video. We, we see now that short form video in particular performs especially well. And if you optimize those videos well for, for YouTube SEO, you can get some, you can get some pretty good reach that way. And if you want to boost things with it with ads with a small ad budget, you get a lot of bang for Your Buck on YouTube because you can pay on a per view basis, which is still relatively cheap considering the, the impact that you have. And with LinkedIn also, I would suggest having a small budget even for thought leadership ads so you can boost if you're, let's say particularly for the SaaS, CEOs and founders, it's very important to be out there with your personal brand on LinkedIn. And I would suggest in addition to try to build a following to use thought leadership ads to put small budgets but impactful push behind some of your top posts.

So. Okay, I get it. So you mean we should talk. Let's say our clients and let's say our audience. Let's say the founders of software development and B2B SaaS, they should look careful in linking on YouTube and start small and let's say promote their business step by step. Okay, good. If we speak about, let's say that your service small and let's say promote their business step by step. Okay, good. If we speak about, let's say that your services. How do you charge a client? Because I know that paperclip companies, the agencies cooperate, they usually charge, let's say, a percentage of the budget starting from certain, let's say amount. What's your point of view? How do you, let's say, how do you charge your clients?

Yeah, that's, that's what we do. We charge a percentage of, of the ad spend and there's a minimum, if it's very small, there's a, there's a minimum level. But mostly it's somewhere around between 10 to 12% depending on the size of budget.

Okay, okay. Okay. So you operate with the companies and you tell them, okay, if you are paying less than 10,000, we are not working because it's not effective for you to start to launch. Let's say the campaign. Maybe, and, and maybe what's your level, let's say, of the average spend when you start working with the clients?

We do, we do Recommend at least 10,000 in media spend per month to be effective. In most SaaS categories, particularly the ones that are mature and very competitive, the cost per clicks are pretty high and you really need to have, you need to have a healthy budget in order even just to generate the amount of data that's required to fully leverage Google's AI and automation, particularly automated bidding. Below those levels, you're playing more of a manual game. If you're, if you're only investing maybe a few thousand in ad spend, you're probably going to need to do manual bidding and you're not really going to be able to take advantage. You're not going to be, you won't be able to leverage Google's AI and automation as much with a smaller amount of data. That puts you at a disadvantage that it's very hard to overcome. So we generally recommend starting at least at 10,000 per month in ad spend.

Okay. And I thought that we are, and you and me, we are almost at the same situation. Because we are working with B2B. We are. And our clients, because we are working with B2B, we are working on subscription packages, which is closer to B2B SaaS because it means regular payments. Right. And we are aiming to work, let's say with the biggest milestone, with the biggest budgets on the market or with the longest, let's say long and to create trustful, long relations. What do you personally do to attract big, high paying clients?

Well, personally, I tried to be pretty active with on LinkedIn. I do a podcast and that's, that's a big part of our marketing efforts. We, we do rely on referrals from current, existing and past clients. Those are always a good source of leads. And we do have some outbound activities as well. So we do send emails and we do, we do a combination of cold, cold email and LinkedIn outreach to try to get in front of target audiences. So it is a combination of inbound, which is driven by content marketing, outbound, which is mostly cold email based, and then referrals from our network.

If we speak about, let's say a paid search, it's more scalable to a certain level, that's okay. But for the referrals, the leads that comes from referrals, they're really good, they're really warm, they share, let's say, the trust. They are able to pay more, but there is less amount and it's hard to scale the referrals. Do you have certain, let's say, approaches how to scale the referrals?

I think that there are some, they're inherently not scalable, but there's some things that you can do to get more referrals. I mean, one thing is just simply to ask the clients and former clients, a lot of people don't even do that. Another to be a little more proactive is to Even research the LinkedIn connections of some of your best clients and find those people that they're connected to that you would like to work with and then write to them and say, hey, I noticed that you're connected with this person or maybe with these few people on LinkedIn. I'd really appreciate an introduction and that's a way to be more proactive with it. But yeah, I think a lot of agencies like ours and other service companies that they don't do that well enough and as persistently enough.

Sure, that's true. How do you motivate referrals in terms of the money? I see that. Okay, you like my job. That's why could you please recommend. So it's part. It's like trust part. This is. Okay. But do you motivate referrals in the monetary. Monetary. Or how do you motivate referrals to, let's say, to refer you. If we speak not only on the quality of the work, which is, let's say, essential for that level, but they may say, okay, I'm a little bit busy, I don't have time. They are really busy because they're the founders. They're overwhelmed. But how do you motivate them, let's say in general, to refer your services?

I think that if we have a great relationship and we've done good work for them, my experience is that they don't need a lot of extra motivation that they would actually do it as a sign of appreciation for the good work that we've been doing with them. In rare cases, though, we have offered some monetary incentives, like even saying, hey, we'll. We'll give you a discount on next month's invoice.

Okay.

If you help us to close this client. And, and sometimes we do that, but we don't lead with that. It's something that normally would be kind of in reserve, but most of the time when, when there's a specific ask, I try to maintain the pretty good relationships with all of our active clients that they would say yes, just as a, just as a sign. A sign of thanks for the work that we do. Yeah.

Again, because I see that some companies, they pay like 10% if it is like a custom work or up to 40% even if it is like a B2B SaaS. So it seems huge to pay 40%.

That's a lot.

They are still alive and they are still economically beneficial, but they pay. Sometimes they pay for a first month, for the second month. Some, some people pay let's say 20 or 30% lifetime. So which is a huge, let's say, amount of money. What do you think about that? Is it possible for, for service companies to pay for that?

Yeah, I think, I think, I mean, 20% is the, I would say the max that I've heard of. And we've had some other. Over the years, we've had some partnerships with other agencies that are maybe not, not directly competing. And we refer us some of their prospects and we, we've agreed in the past on the 20 rev Share for Life, for the life of a client.

Okay.

I wouldn't really go higher than that. And I think the way you can always adjust your own final price to the customer to the, to the end client to make sure that you can maintain the, the margins that you need. So I, I think it's, yeah, there needs to be some incentive there for the, either for the partner or the referring partner to have, have something there. So I think, you know, below 10 probably isn't going to be enough of an incentive. 20%, I believe is, is quite enough.

Okay, have you tried working with referral platforms? Because you know, there are some, let's say market organizers and people say, okay, if you have an offer, I have access to the people, let's say, that are ready to recommend you basing on the certain, let's say incentive and we would like to be paid like a share of this incentive. Have you tried working with this platform? Because I heard a lot of them. I tried several but I didn't succeed with that because they are talking a lot. And if we're speaking about B2B SaaS, it's more like B2C related because if people are, let's say, buying and selling toothbrushes, everybody need that and they can, let's say, find a lot of people who are ready to bring you more clients like that. But for the B2B SaaS, in my case, it was not, let's say, very efficient. What's your point of view? Have you tried these platforms or kind of, let's say, other referral channels to grow your business?

No, no, I haven't done any specific referral platforms. It's just been limited to the occasional partnership with other agencies and then requests made to clients, current and past clients.

Okay. Have you tried events online or offline? Because I heard that events. Well, I, I know that events are good, but people are rarely ready to go outside and to, to, to meet with other people. What do you think about that? Is it life now or it's maybe not working very good?

Well, I think events have made a huge comeback post Covid and I've been, I've been to a couple of events. I've been to SAS Doc in Dublin last, last fall, which was great. So I, I really enjoy going to events. Ideally I try to speak at those events and I, there's a few events that I apply to speak at every year and I've spoken at events like the PPC Hero conference in London a couple of years ago. But yeah, I think events can be a very powerful way of lead gen, particularly if you can get on stage and you can speak.

Yeah, if you want, I can share some secrets of the events. So what we do, we try of course, speaking is absolutely awesome, but if it is huge competition, it's hard to penetrate and to give a good story for the people. So we see that events are getting more digitalized and people trying to create certain platforms for participants to communicate with one another. And there is a smaller, simple thing that we do. We got, let's say, for example, there is 10,000 of attendees and we put, let's say, several of my employees, let's say, in the application and then extract, say, the first name, the last name, the position. And when we find these people on LinkedIn and we tell them, hi, Paris, it was nice to see you at the conference. I saw that you've been there, but unfortunately we haven't managed to connect. And it gives huge feedback because people see, okay, we are, let's say we are interested in the same events. You are the person that have been there, I'm the same. So let's get connected. And we see a much better acceptance rate there. And it's a good, let's say, door opener for people. And it doesn't cost a lot, for example, even if the entry fee is $500, for example. But I get the access to the list of potential candidates, or let's say a list of potential clients, and they talk to them personally, LinkedIn. So I'll say I buy a source, I buy a database of these people and connect with them personally in LinkedIn. So it also gives a good result.

I think it's a fantastic strategy. If, if you can, if you get access to the attendee list as a, as a benefit of signing up and paying, then absolutely, yeah. I mean, reach out and say that. So, yeah, I was there. Sorry I missed you. Would love to grab a virtual coffee since we couldn't get, we couldn't get a real one. Oh, yeah, yeah. Love that strategy.

Yeah, it's not, it's not like a list, but you have to work with the filters because if you have the access to the internal app, like, you know, for all participants, they share to help people interconnect together better. Right. But if you get the list, you get, let's say, dimensions. But it's okay, you can, let's say, write it down on LinkedIn. Okay, I found Paris. Paris is the founder of the company. Okay. I go with the Paris and say, hi, Paris, we've met there. Let's have a quick talk. And it's really good because Even more in LinkedIn you have events, and if you want to attend this event, you get a list of people. So you can see other people who are attending this event. For example, if you are selling B2B SaaS and you see that there is a B2B SaaS event of your competitor, you can add yourself to this list and then you can have list of the profiles and then you see, okay, these are the employees of my competitor. Okay, we'll not connect to them, but these are let's say our competitors, then we're not interested. But these people who are the founders of some specific companies, they are interested in this event. And it's also good intent to show because if they are interested and they are the appropriate level, why do they come to see this B2B SaaS event? Maybe they are interested in something or it can be B2B marketing event, et cetera. And if you connect with them basing on the same stuff, it's also good give a good insights. I saw that you've been there. Okay, what's your point of view? Do you like it or no? What works, what not? So there are a lot of good points how to use this stuff. So I think that connecting all the dots together, making let's say a sphere around our potential clients can give a good result.

Yeah.

Okay. So I was pleased to meet with you. I see that you get a lot of interesting points. So guys, if you are interested in advice from Paris, please there will be contacts of Paris below this video. Please contact Paris because he knows a lot. He works till since 2009 if I'm not mistaken. So he got a very huge experience in working with the BTB SaaS. So ask him for his expertise and get his advice to see how you can work together and how can you get the best results out of it. Right?

Yes. Thanks very much, Dimitro.

Thank you, Paris. I hope that let's say the market situation will change after the US elections because it will be more sure. And let's say it will be more. More stable. I hope so. And let's say the people will stop holding the money and will keep on investing more in business. And that's why it will be a good point for us to work on and to help our clients grow faster.

I hope so too. I think there's a bright future.

Absolutely. Times are going to get for the people who love their work, who are concentrated and who give real results to the clients. There is no other way to work to avoid success. Okay, so thank you Paris. So guys, you know there's description. Contact Paris and ask about SEO and pay per click advertising. Thank you Paris.

Thanks very much. Dimitro. Have a great one.

Yeah. Thank you.