How To Segment Target Accounts for Maximum ROI

Hello everyone, welcome to today's webinar: How to segment target accounts for maximum ROI. So today we're talking about something very important, which is the account segmentation. And so this is the third webinar of our series about the comprehensive account-based marketing guide for SaaS from 0 to 100 million ARR. So if you missed the previous webinars, you can find them on our website on sasmql.com/webinars and you can watch the recording anytime you want. So like I said, there are 5 more webinars after this where we're gonna go in details about each step of planning, building, launching, and scaling the account-based marketing strategy for your SaaS company. So let's start digging into the segmentation part, which is, in my view, one of the most important steps in the kind of journey to launch the ABM strategy. So if you have missed the previous webinars and you don't know who I am, My name is Franco Caporale. I founded SAS MQL about 6 years ago. Before, I was in Silicon Valley working for a few venture-funded companies like Branchstone.io, The Way to Optimize, and Couchbase, and leading demand generation for the most part. And in 2018, I started SAS MQL, which is a company focused on account-based marketing. We partner with many SaaS companies to help them launch these ABM programs and scale the ABM campaigns to generate opportunities from target accounts. So let's start talking about segmentation. So today we're gonna talk about building the ideal customer profile based on your CRM data. Data. We're gonna talk about segmentation and the different dimensions for segmenting target accounts. We're going to talk about account fit versus account intent, and intent data and account intent is a very, very big trendy topic lately. So I want to, I want to discuss a little bit about that. We're going to talk about how you build and enrich the target account and contact list And at the end, we're gonna talk about focusing on low-hanging fruit. So let's start. So the first thing you wanna do, and this is particularly if you are at the early stage of your kind of demand generation journey and maybe you are seed-funded companies or you have some customers obviously in your belt and you have some success, but you're looking to become more targeted with your, marketing effort, and that's why you're launching ABM. But in general, even for more established companies, I see this is something that should be continuously discussed. So you always want to have visibility of what's your TAM, or total addressable market, and you always want to start from that because everything you do after is always going to be a subset of that TAM. So if you start with a really, really small TAM because maybe your product is only designed to do one feature only small niche companies can use it, everything else is going to get very, very tough because you're only going to be targeting then a percentage of that and then you're going to segment that in more small buckets and then only a percentage of those are going to engage and only a percentage of those are going to turn into customers. And so, you know, ideally your TAM is really, really large. Those are the most successful companies are those that have a large addressable market. See, for example, Slack. Everyone that has any kind of company can use Slack. You can have 1 employee or 100,000 and it works. And it's not just a small niche. So they have the opposite problem. They have too many options. And then from the TAM, you want to find what is your ICP or ideal customer profile, because not everyone who is part of your TAM is going to be part of your ICP. And then from the ICP, you want to segment all your ideal potential customers into multiple segments so that you can be really strategic with, with your budget allocation, with your efforts, and really looking for, who you want to target and prioritize. So this is kind of the, the model, and now we're going to talk about kind of each different step. So when you look at the total addressable market, um, like I said, this every company that can potentially buy or and use your product or service. So I give— I like to give examples so it makes a little more clear. So for example, for us, we run account-based marketing campaigns. Who can use that service? Who can benefit from account-based marketing campaign? Any B2B company that has a high ticket price, usually. If you sell something for $50, it's not really well suited for ABM. So any service for high ticket price, but that could be a mortgage broker, or it could be a real estate agency, or it can be manufacturing, or it can be software, can be anything, right? So it's really, really broad on the TAM side. And so it should be broad, right? Like I said earlier, so you normally want to have many, many thousands of accounts in your TAM. It can be 20,000 companies, 50,000, 10,000, 100,000 companies. But not everyone is an ideal customer. Going back to that, so for us, an ideal customer is, is much more narrow than that. So we only work with SaaS companies, and so already we are limiting from any B2B company to, to SaaS companies. It's not that we cannot work with non-SaaS company, but we decided that those are more ideal for us. But that's particularly on the outbound strategy We only outbound to SaaS companies. So in our ABM campaigns, we only have SaaS companies. But if we have interest inbound from other companies, it's not that you have to exclude it, but this is just for ABM in particular. So if your TAM is really small, you will have very little room to grow and everything you do is gonna become very, very, very hard. But it's good to have an idea of how big is your TAM. Like literally as a number of companies, if you do, some, some research using databases like ZoomInfo or Uplead or Crunchbase. Look for how many companies— or LinkedIn even— look how many companies there are broadly in your town, like roughly maybe it's 50,000, 30,000, just to have an idea, because everything is going to be a subset of that. So now we talk about ideal customer profile within your town and When you look at your ideal customer profile, if you just started your business yesterday, obviously you will only make assumptions of who you would like to serve or who will benefit from your product. But normally all the companies that we work with, and normally anyone who has raised money, anyone who is already like, you know, has already revenue, they already— you already have some customers that they are hopefully successful with your service and product. So that's where you start from building your ICP for your next ABM campaign and ABM strategy. Because what you're looking to do with your ABM program is to scale what is working really well. So if you have 3, 4, 5, 10, 20 customers that are really, really successful with your product, that are the highest value, the lowest churn, that was easier to close, they really, they really feel the pain that you're solving and they're successfully solving it with your, with your product or service. That's what you want. So if you have 4, 5, 10, like I said, you need to find them, identify them, who they are, and then look for, for trends, look for patterns of what do they have in common that makes them really successful with our service? Why do they all feel that pain? And what is the value of each? So that hopefully, you know, you are maintaining that high value. So this is— I took from, from a Salesforce, uh, report of some random company. So you can see that they are targeting, uh, mobile generators, portable generators, uh, probably that's their, that's their service. But you can see there is all logistics-based, or hotels, hospitality, so manufacturing. You have some mix here, but you want to group them ideally with certain common characteristics and finding, uh, what they have in common. And you can see the product that they're serving with the generator side, and maybe they have a specific product for a specific group of companies. But that's where you want to start. Always start from your CRM data. Don't go with assumptions that are not really reality for your product. I saw in the past companies that told me we want to target Fortune 500 companies as our ICP, but they don't have any large enterprise in their customer list. They only have like small mid-sized company, like 200-300 employees. So you're gonna have a really hard time selling to those large enterprise when you have zero case study at that level. You don't even know if your product can support the requirements of a large enterprise. So that's why you want to look for what is working and find more of it. If you find 5 or 10 of these companies, you can probably find 50, 100, and that's what you want to focus your marketing budget. So you start from Salesforce, you pull your— or HubSpot— pull your close-won deals and opportunities, look at the customers. Hopefully they haven't churned, right? Because we're talking about really successful ones. Look at the value, and then find common characteristics for these companies. And that's gonna be your ICP. That's where you're gonna create your, your profile of the ideal customer. So you, you might create more, um, more than one profile depending on what stage is your company. So if you write down in this chart at the top your, your top customers And then what is the geography of these top customers? What is the size? What are the attributes they have that maybe they are not part of the firmographic? For example, they all use, I don't know, they all have high-ticket services, right? That's not something that is listed on other parts here. What is the industry? What's their revenue? What technologies do they all use? For example, for us, we know we do very well when a company uses HubSpot and Slack because they tend to be more forefront in adopting new strategy, new technologies. But that's an example. You can find correlations there with technologies and, and the fact that is if it's a good fit for you. And then the last one is the persona, which we're going to talk in a second because You want to put what role is going to benefit from your service, and sometimes there are more than one. So you might have a different service for, for example, HR and a different one for finance. For example, we actually have clients that have something related to expenses and tracking expenses, and they have a slightly different product for sales and one for finance. And so those are two different personas, different messaging, different value even on, on a potential value for, for them. Because if we look at their revenue distribution, the finance part is probably like 70% and only 30% from sales. But that's why you want to keep that as, as part of your, of your strategy. But you want to be very specific because you're looking to really narrow down from the TAM, which is many, many thousands of companies, to what's going to be your ICP, which could be 3,000 companies, for example, or 1,500 companies, or 5,000. I don't know, it depends what your solution is and what's your deal size, etc. But it should be a manageable list on your ICP because you want to target that list actively and you want to have it in front of you. And so that's where we're going to go next. So on the persona side, that's another part that you don't want to guess or use assumption. You want to actually look who is the persona, who is the role, what's the titles of the people that were involved in the buying process of your successful closed-won opportunities, especially those that fit the profile of your best customers. So if you go back at those customers and look what roles were involved from the beginning of the buying process. So who engaged first with your sales rep? What was the title? Who was brought in and involved later? Then who actually signed the deal? And who had to review, for example, the compliance or other things like that? So you have the initial person, you have your influencers, you have the technical buyer, you have decision maker, you have potential enemies or potential stops that could become a problem for your sales that maybe you want to influence from the beginning. But you want to create your buying committee basically, but you don't want to guess it. Just go in Salesforce or HubSpot, pull the list of your close-won opportunities. And for example, in Salesforce you will see there is a report called Opportunities with Contact Roles. So it pulls every contact associated to the close-won opportunities in this case. And you can even open it up to the current opportunities and just get the whole list of titles. Because 90% of the time I see that the titles are very different from what I hear from even the sales team. Well, many times they say, we only target VPs and C-level of engineering. And then I look at their close one opportunities none of those roles were involved at the beginning. So if you target those from the beginning, you might just find a block and you won't be able to move forward. So you want to see who does the initial valuation, evaluation of that, of your solution. And that might be just a technical buyer, someone who is more on the day-to-day that you need to influence first to then arrive at the director, the VP, the C-level It depends what the path is, but you want to reverse engineer that path to close using the, your actual data. So then you can form the list of titles. Then when you pull the list of your target accounts, you're gonna look for content that match those exact titles as well. So you're literally recreating that buying process proactively towards, towards prospective customers or potential customers instead of your real ones. And you want to open it up. So it's not just whoever signs the deals, right? The CEO who signs the deal at the end, that person might not be involved at all in the actual sales cycle. So you definitely want to influence and target that person, but you definitely need to expand who you target using data. So one other very hot topic is intent. And intent data, which is very buzzword as of a few years. So, and I hear also very, very often, we want to target accounts that are about to buy our solution, they're in the buying mode, and avoid everyone else. But guess what? There is this thing called the larger market formula. Where only 3% of your target accounts and your target buyers are actually buying today. So if you decide to limit all your marketing efforts towards that group of companies, assuming that you can find them, by the way, reliably, because that's something that's not very easy to do, but assuming that you can find them, you are missing out on 97% of your target market. And you probably say, well, if I always target, you know, only that 3%, I'm saving a lot of money in marketing and I'll be very successful if I can find them. But in enterprise sales, it's all about nurturing and building relationships with those accounts. It's not a quick buy or someone that can do an impulse decision. It's all about creating awareness and really nurturing those relationships with with the buyers, with the, the decision maker, the influencer, creating a champion within the account, etc. So that's something that requires an extensive period of time. But if you're not targeting those ideal customers, those that you have determined they are ideal potential customer for you, and you decided that you don't want to target because they are not buying today, guess what? Your competitors probably are targeting them. And they are taking them out to dinner, they are meeting regularly, and when it's gonna be time to buy, they have shaped the entire decision criteria for your solution. So literally, the requirements are going to be written by your competitor, and it's going to match their solution, not yours. Actually, it's going to be designed on purpose so that something that maybe the customer didn't even care about, that you don't have, they put as one of the requirements and explain why it's so important. Because you have not even showed up to that potential customer during all these months, and now you think you can jump at the top of the list is very unlikely. And so you want to actually target everyone who is not buying today, as long as it's a great fit for your product and solution based on what we discussed earlier. But if they are a great fit, you want to target them today. And you know, they're probably not buying today, but you want to build the relation, you want to nurture them. And if you focus on, on those with a great fit, eventually they're gonna become interested in buying. Maybe their contract with their competitor, with your competitor, has run out and now they're looking to replace them. Or maybe they feel the, the pain that you're solving now that before they didn't. So as long as you have showed up regularly and consistently and kept them informed on everything about the industry and your solution and gave them value during all this time, you are gonna be the first one they think about. And on the contrary, if you focus on companies that have a high intent, but they probably are not a great fit, are actually low fit for your solution, you're just wasting a lot of time and money because you're just gonna sign up customers that are probably gonna churn very soon or they're low value, they're a pain to serve because they don't fit the criteria of your ideal customers. So fit is way, way, way more important than intent. And so just focus on those great fit accounts. So when we talk about segmentation, These are some examples on how you want to segment, and it's super important to do, to do this properly and early because this is going to drive your entire ABM strategy. Because if you think each segment is gonna match basically one campaign, so you're gonna build one campaign for, for your segment 1, one campaign for your segment 2. So for example, if you segment your account by verticals and you have a software vertical and healthcare vertical which have a different messaging because they use your solution in a different way, then you're gonna create two campaigns, one for software, one for healthcare. Great, but that's not it. So you might also want to sub-segment them into tiers. You might have a tier 1 software and a tier 2 software, a tier 1 healthcare and tier 2 healthcare. Why do you want to do that? Because you want to allocate different budget on different sub-segments. So if tier 1 software accounts provide me with more value when they engage and they convert, I might want to put 70% of my budget for software into tier 1 and only 30% on tier 2. And then I might be shift— maybe tier 2, they actually are lower value, but they tend to close much faster. And so maybe Lately, I'm going to look at the data and might shift some of the budget from tier 1 to tier 2. But when you do that, when you have a good segmentation, you can really drive your strategy in a much more granular way. Same thing with geography. That's another subsegment of your main segmentation because you might have a sales team that just started in Europe and you have to allocate some budget to target European accounts for that, but maybe you're not allocating the same budget than North America because you only have 1 or 2 reps there. So you're not gonna spend the same amount of money where you have 20 reps in the US. And also you have less traction in Europe in general. So that's another way to target that. And then a very important segmentation, sub-segmentation actually, that applies to every segment is the funnel stage. So for each of your segments, you need to identify if the accounts are cold, if they are warm, engaged, if they are an existing opportunity, they are a customer, maybe they are a churn customer, or maybe they are a lost opportunity. Because when you bucket them this way, you can create specific targeted campaigns that are a good fit and they match their existing stage. Where they are today. So obviously you don't want to target a lost opportunity in the same way that you target a cold account, because the lost opportunity maybe has spent weeks speaking with your sales rep. Maybe you have done a pilot or you've done many demos, etc. You'd scope the project, and then you don't want to target like they never heard of your solution before. So that's why you need a specific bucket for them. And same for every funnel stage. It's super, super important to do that, or your campaigns will have very little effect because you are just treating everyone like they are at the same stage, like they are cold, or like everyone knows your product when they don't. Obviously it wouldn't work, so it's clear why you have to do that. But for each segment that you identify, it should be of high potential value because you're gonna spend time creating flows, assets, allocating budget, running those targeted campaigns. And that's why you shouldn't have like 10 accounts in one segment unless they're worth a lot of money and, you know, they, they are really, really, really valuable. If not, you don't want to do that. Make sure you have The total amount of potential value of them combined should be really high because you know you're only gonna actually convert a percentage, maybe small percentage of that every quarter. So make sure that it's worth it. Some examples here, we talked about vertical, funnel stage, tiers, and a lot of segments are custom for each company. Like for us, we work with both marketing and sales, and those are two separate segments. We have obviously tier 1 and tier 2 and tier 3 accounts. We have not many— we have one vertical that is software, but we have different locations as well, different regions, and obviously the different funnel stage. So those are— that's something you want to have a clear and visualize so that— and ideally put a number on each of these buckets of how many accounts you have and put the potential values so you know where you want to allocate most of your marketing budget towards what bucket this quarter, what bucket next quarter. So you can literally turn this into a plan, and that's something we're going to show in the, in the next webinars starting from these buckets. But these buckets are going to drive everything you do after and your strategy. You're going to measure the results and everything around this. So once you have your target segments, you can start building the target account and contact list. So we talk about the different attributes that you want to list, and these are some of the, some of the tools that we use to help our clients build their target accounts and contact list. And, you know, it's a constant work because the list gets stale within weeks, literally. People, especially now, they change job constantly. So your list needs to continually be revised and kept up to date. And, you know, you want to have someone who is responsible for that, usually RevOps or someone in marketing, but A stale list is a money killer. You are gonna be spending time and money targeting maybe someone who doesn't, hasn't been worked there for 3 years, or maybe that company is not in business anymore, or things that was acquired by your competitor. I saw that as well. So you wanna be always keeping your list very, very up to date. And the last part I want to talk today is about prioritizing your budget. So when you have all these segments and you can visualize them and discuss internally, the next thing you want to do is start from your low-hanging fruit. So for example, if you have your cold segments or accounts that have never heard of your company or your solution, usually that's the biggest segment obviously, but is not necessarily the first segment that you should target and prioritize. I always like to look at existing engaged accounts that maybe have visited your booth at a trade show, have downloaded a white paper, have clicked on your email marketing, and fill out any kind of form. So they're maybe doing research, or at least they, they are familiar with your content or familiar with your, with your website. And there are other segments like that. Lost opportunities is always something I like to start from. If there are a lot of lost opportunities that we can retarget and try to re-engage and restart, especially if they haven't been lost like, you know, in the last few months. But those that you lost last year, potentially they could be reactivated, and that's something that is usually very low cost and very high reward and high conversion. Same thing for churn customers. Sometimes they churn because maybe they run out of budget, they had layoffs, especially in the last couple of years, but not necessarily because they didn't like your solution. So we always want to try and retarget them and at least keep them up to date on new features, new services, new anything that you are releasing. The highest the potential value of your segment, the more budget you should allocate, but always, but not necessarily you want to start from that. Maybe your highest potential value is the cold accounts like we discussed, but you always start from those that are higher priority. And especially when you look at funnel stages, the warmer, the more, the higher priority and the sooner you want to target them because they're not going to stay warm for long. So I always like to follow the revenue. I start from whatever account is closer to sales, like those that you sent a proposal and then never responded. Like, that's, you know, something that you can literally with, with small budget turn into a lot of revenue. And then move your way back to the left of the funnel to the cold accounts, and that's who you target after every— everyone else. But every month, every quarter, you want to revisit this budget allocation And maybe you shift budget if you see that one segment is showing traction, is driving results, and maybe other segments not so much. And so you can always be strategic with your marketing budget. Don't set it once a year and then, you know, forget for 12 months. Because if you have spent all this time doing this segmentation, which is very, very strategic work and really valuable activity that I recommend, then you wanna also be strategic with your budget and you're gonna turn that into a lot of ROI if you do that. And with this is the end of the webinar number 3. So I hope this was interesting, this was interesting. And next week on May 7th, we'll have webinar number 4, which is how to create your ABM playbook. So we're gonna start from the segments that we have created after this webinar and we're going to create a playbook using different strategies to target those segments. So thank you everyone for joining us today, and I hope to see you next week at the next webinar. Thank you.