How to Target your Product, Sales and Marketing More Effective with 1Password, Mediafly, and Segment

Hi, and welcome to our session on building your ideal customer profile. First, I just want to thank the SASR team for getting us all together. What a great lineup this has been. I continue to be impressed by SASR's conferences. We're super excited to talk to you about ideal customer profile today, because an idea— getting your customer definition right can be really momentous in everything you do, from engineering to sales, to marketing. And each of us as heads of marketing have gone through many different ideal customer profile projects. And while it can be big and amorphous, there's also a pretty solid process that you can follow to make sure that you're targeting the right people to be more successful and grow faster. So with me today, I have Katrina Wong, who's the former CMO of Hired and now the head of marketing at Segment. And I have Isabel Popolius, the head of CMO of Mediafly and a former advertising agency executive. And my name is Carrie Lou Dietrich. I'm the former head of marketing at Atlassian. Was there ahead of taking them public and then after they were public. And now I'm an advisor to a number of tech companies, including a fractional CMO role at 1Password. So next slide. Next slide, please. We have a couple minutes of housekeeping here. I don't think it is showing up.

It is not. Hello, everyone, because I'm having slight technical issues, but—

I'll take over. So you can put your Q&A in the chat or the questions on the platform. I can see that. So hi to Kim and Julius. Thank you for letting me know you're live there. And the session will be 50 minutes. We'll go through some content. I'll actually be looking at questions the whole time. So if you want to vote them up on the Questions tab, I can insert them at the appropriate times. But we'll also leave time at the end for questions. And as with all the— all the SAS presentations today, they're going to be recorded and posted afterwards on the SAS YouTube channel. So without further ado, let's get started on the meat of this one. You're going to see all the slides. This is a Rorschach test.

It works very well when in rehearsal, but for some reason—

Slide 3, the one that looks like magic. All right.

I'm going to stop sharing my screen for a second, and I'll come back. Apologies, everyone.

Okay, so we'll just start talking about it. So we wanted to start by talking about what is an ideal customer profile. So in the world of marketing, everyone likes to have lots of acronyms, and so they might throw this ICP at you. But at its essence, the ideal customer profile is trying to articulate as specifically as possible exactly whom you are selling to. And the reason you want to do this is because the more accurate you can be about what vertical these people are in, what level, title these people have, what stage of adoption, are they early adopters or are they late majority, the more you can identify who they are, the better you can build the product and the better you can message to that audience so that they feel like, oh my gosh, that's totally me, I need this. And you can be more effective. And, you know, early in some product lifecycles, you might not, you might be willing to take customer, any customer that will try and use your product. But as that product matures, it becomes inefficient to have a lot of different customers that have a lot of different patterns because you can't service them effectively. You can't prioritize improvements to the product effectively. And so you want to be really thoughtful about structuring this definition that the whole company can rally around. And when I went to Atlassian several years ahead of the IPO, we were only selling to developers. And we knew that we wanted to unlock this bigger audience. Of team collaboration for all sorts of business users and customer support and IT teams. And you can't always start by messaging to everyone, you know, you start like a piece at a time. So Katrina and Isabel have been through this process at big companies, at little companies, and everything in between. Katrina, do you want to start and just talk a little bit more about why ICP has been important at the companies you've worked at and just a super quick overview of where you've run that project? Process?

I think simply put, when I think about the ICP, it's who you want to sell to versus who just wants to buy from you. So it's strategy in many ways. And to Carolu's point, it's not just marketing strategy. It's synonymous with your company's strategy. Another way to think about it is for every dollar that's going out, what is the best return? So in other words, how easy is it to make that sale? And taking it one step further, what about churn? Is your ICP the best fit for your company because maybe the sale's easy, it's the best fit for the customer, and therefore it's the best fit for the business, and you're also thinking about longevity? So that's how I would describe ICP. There's a later slide that talks about how to about ICP, you know, across different stages. So I'll kind of hold off, you know, on that until we get there.

Thanks, Katrina. And I like what you said. I feel the same way. The way I put it is, you know, the ICP helps get the most bang out of your buck with less effort. And, you know, coming from a company like AdMediafly, which is a, you know, mid-sized to small with limited resources, right, both in people as well as budgets. As I see it, it's, you know, where do we want to spend our calories, really? And where do we want to allocate these resources across the board? Of course, in a way that ladders up to the business strategy, as you said. And in our situation, where we were, you know, about a year or so ago, was, you know, we had come— we had 3 acquisitions in 2 years. So we absorbed other companies. As a result, our Product portfolio became much broader and more complex. We found ourselves in the middle of COVID as many of you, with limited budgets. We felt that we had started to stray away potentially from our core customer. We had a brand new sales team. We were getting a lot more pipeline, which is great. Like our pipeline quadrupled as a result of the messaging, the efforts that we were putting out there. And because we're getting better at doing what we're doing. But we also realized that we, as someone put it to me, you know, you can die from starvation or you can die from overeating. And so we couldn't follow through on the pipeline and we couldn't service everyone effectively. And so that became back to resources, okay, where do we really put our effort? So that was the kind of the beginning of the discussion for us. And I would say Mediafly is the first place where I really lived the ICP process in a very, you know, in a startup environment. But I've been involved in segmentations and persona work with, you know, with my past life in the agency world with clients, you know, much bigger clients.

Right. And, you know, it's funny because I ran the ICP project for 2 or 3 startups last year, and then this summer ran one for a brewery in town because it's the same problem. How do you talk to the people you're going for, and what do you prioritize to really and meet their needs. So let's talk a little bit, Katrina, about what growth looks like, or, you know, what the ideal customer process looks like at different stages of companies, and how it's different if you're like $0 to $5 million, or $50 to $200 million.

Yes, we can definitely talk about that. You know, I spent some time, a little bit of time across a couple of C-stage plus Series A startups. And, you know, at the $0 to $5 million, you may not really have that many customers yet, or what you're doing is looking at your first set of customers. Maybe it's your first 100 customers. And so really, when you think about your ICP, the patterns may or may not emerge immediately. And so you're working off of this hypothesis for why you even built the product in the first place. So that first, you know, ICP motion, if you will, it's really about validating and this continuous validation with your first, you know, set of core customers and figuring out, you know, how to iterate, you know, what are you learning. As you get bigger, and so maybe this is, you know, from, you know, $5 million, $10 million to $50 million, or, you know, perhaps even up to $100 million. When I was at Zora, what we looked at were just our top deals. And we looked at the best fit for these deals across industry. So again, back to the point of how easy is it to close the deal, and then how easy is it to implement, right? And how sticky is your product? And this was around the Great Recession. And so we had to move up to the enterprise really, really quickly just to survive as a company. And so What you want to avoid is ending up with 5 enterprise customers or so that are just so different. And all of a sudden, you experience this drag with your product because you're kind of almost custom building for your enterprise customers. And you definitely, if you don't get your ICP right, you kind of become this custom software development shop for your top customers.

Which is better than being good at a lot, but not fantastic at any one thing, right? You can kind of move slower with all those. You can move slower with a whole bunch of different customers, or you can move a lot faster to dominance with a really more focused target.

That's right. That's right. Because if your surface area is too big from a product perspective, your execution for being able to build product that services your customers in a deeper way as you move upstream to enterprise, it'll be impossible to execute. That's a good segue into, you know, where I'm at right now. And so this is the, you know, $100 million to $300 million beyond, right? So currently at Segment, we are a CDP, customer data platform. And what's interesting about CDP is that, you know, we're starting at the data level. There's not a strong point of view, which a lot of application companies do. So I guess the downside of success is that you can actually sell across multiple industries with a variety of use cases. So when I walked in about a year ago, I took a look at the data and I'm like, hey, let's take that approach again. Let's look at the best fit deals. And we were in 100+ subindustries and there wasn't even a 15% concentration in any one of these industries. And where we are today is we ended up hiring a large vendor to run a large market research study for us. And we'll, you know, there will be some examples later. But we basically combined, you know, kind of in-house data, along with external data, research data, so that we can get to the best characteristics for our segments so that we can zero in on the right, you know, customer profile so that we can build our product for growth, because we were facing that, which is the huge product surface area, and it was hard to build for every single customer across every single industry.

And so, Isabel, can you go to slide 5? Because I think, you know, there's complicated ways to do the project with in-house, with external vendors. You can take a long time internally, but it's actually not magic to do it. It's kind of like a thorough process that has some of these aspects in it, right? You're looking for use cases. So maybe you solved a government use case first with your AI software, and then you're trying to figure out what's the enterprise application there that's like just kind of same technology, like different use case. There's the types of solution, the size of the company. Are you selling to enterprises, as Katrina was talking, or are you really interested in mid-market or SMB? There's verticals and industries. So I think ultimately we all wanna sell to all verticals and industries, but sometimes you need to, take one at a time and, you know, take a bite of the elephant instead of trying to eat the whole elephant. These adoption stages are really interesting in your ICP, because you can end up with a lot of early adopters, but they might just be tire kickers, and so you might find that that's actually not what's going to get you to your next fundraising round or to IPO, because you need to get, like, farther into the early majority. And like, what does early majority care about? It might be a little bit different than what the early adopters care about, or the innovators. The sales model you're using. Do these people like to be sold to through product-led growth, which was Atlassian's bread and butter, or do they want enterprise sales motion because they don't like to, to kind of implement the product themselves and kick the tires themselves? There's partnerships and ecosystems, like Are you going to sell alongside, like, on AWS's cloud instead of Google's? There's country and geography. There's some technographics about, like, the behaviors and personality of the people. Isabel, do you want to talk a little bit, like, you've done big projects and small projects. Which of these use cases do you— have you used most frequently? Or, like, which of the aspects have you really focused on when you've been working on an ideal customer? Profile?

So several of these, right? I mean, I would say industries, use cases for sure, technographics, and primarily those, and then a company size. Those are the ones that we, we look at and kind of what, what, where we ended up. So for Mediafly, if you'd like me to jump in now and kind of talk about your recent process and how we did it, and I think Hopefully this would resonate with some folks on this. I'm not sure exactly the makeup of the audience, but for those of you who are, you know, midsize and smaller companies, you know, you may not have the luxury to go out there and do a hyper-sophisticated, you know, ICP effort with a third party and a consulting firm and segmentation and whatnot. So what I like about this is, again, we took We took a grassroots approach, and it still worked, and we've seen great results. And so we started with a hypothesis, and I know Katrina, you mentioned that too, right? And our hypothesis, as I had said, was after multiple acquisitions and a lot of changes in the company, we had strayed out of our legacy core customer, which historically had been enterprise in what we call the traditional industries of CPG and manufacturing. And also incidentally, at the time that we kind of started this work, we had come out of the Forrester wave, and we had done very, very well in the wave. And Forrester, in their analysis, quoted specifically saying Mediafly is the best solution for enterprise for CPG and manufacturing. And so, you know, that also gave us pause And so we went in with a hypothesis of, okay, maybe we should focus on that core customer. We then looked at the data internally, you know, we looked at our customer database and sliced it in different ways. And while it wasn't completely clear-cut, we could see that our stickiest customers were in those industries that were larger, and they were, you know, larger accounts. But that wasn't enough. So then we went into the qualitative, and what I mean by that is essentially was me calling a meeting with a head of sales, a head of customer success, head of channel sales, and asking everyone to come in with what they consider to be their top 10 list of best customers, of delighted customers is how I put it, right? Not just happy customers, are truly delighted, the ones that in their experience have— are the stickiest, are always giving us referrals, are growing the account. And I was— what I was trying to get at was, okay, well, let's identify who those truly delighted customers are as a base for the ICP, because we want more of those delighted customers, right? And let's see what they have in common. And so everyone came in with their list. Happily, there were many overlaps. And that's when we started to dissect the commonalities, which is some of what you had on your list, Kary Lou, on the previous slide. And we saw things, like I said, it was enterprise. It was companies of 1,000 employees and higher. Companies heavily embedded in the SAP tech stack. Companies with two main use cases. And to be clear, that's not to say that, as I said, the ICP is not the OCP, is the ideal customer profile, is not the only customer profile, right? So we do work with customers across a variety of industries and we still do. But the ones that we decided that we'd proactively seek were based on the work that we did coming out of that session. And then what we— what we rolled out is what I call account-based marketing on steroids, or really like surround sound. And what I mean by that is really marketing and sales working very closely together to agree, okay, if this is the ICP, then let's really talk about who are the personas within the ICP, right? And what are the accounts that we want to go after? And we have 3 tiers of accounts from the dream accounts, which are priority 1 to priority 2 and priority 3. Tailing the messaging, and sales is doing, you know, outbound outreach using the same messaging to the same accounts as marketing is, from a one-to-many approach. So we're hitting all the same accounts with the same messaging, just through different channels. And we're definitely seeing the payoff. And one of the things that we had to do in order to do this ABM on steroids, as I call it, is make sure that we had the people, process, and technology. And so that goes back to the resources conversation we had at the beginning, right? So we actually restructured our— the alignment between sales and marketing, including our BDR team and how we're all working together. And we put in place these pods where we have one rep, one assistant development rep, and one campaign manager. And the campaign manager is a completely new role that we created, and I'll talk about that very briefly. So the ADR is in charge of looking at the target list, scrubbing the account information, the lead information, you know, spending time on LinkedIn and finding new leads and so on, doing some research, and then pinpointing conversation starters, right? The campaign manager takes that information and starts to build messaging and cadences that then get turned over to the reps that do the outreach for the outbound. So it was a deliberate decision, right, that we needed to restructure and we needed to actually hire people that can work together in that way. And then on the technology side, our ABM orchestration platform is crucial to this. We use 6Sense. I know there's others. To enable us to reach those accounts, reach the personas that we want with the messaging that we know is relevant to them based on intent and what we know these personas, these titles, and these companies are out there in the market looking for, right? So in our case, we are a sales enablement and content management platform. We're looking for companies that are actively searching for that, right? Sales enablement, interactive presentations. Value selling tools, and so on. So all of that is what the— is the data that the campaign manager, the ADR, and the rep are looking at together. And then we're also lucky to have our own technology, so Mediafly. And so that enables us to serve the content through our technology and through that see how the buying group in a given account is engaging with that content at a very, very deep level, right? Because I mean, Let's say a rep might be sharing the content as a follow-up after a meeting. They may be sending, let's say, a guide, a Sales Enablement Guide 101 or something like that. They get to see if their prospect opened it, how far they read it, and if that prospect actually reshared it with someone else in the organization and who it was reshared with and so on, and the trail continues. So it also gives you a good sense of the buying group, which is core to, to ABM. And then The important to this is now everything we do is through the filter of ICP. So beyond these channels, beyond the outbound, beyond the digital marketing, the way we look at events and which events we sign up for, I'm making sure that, yeah, if I'm going to sponsor an event, the ICP is present, right? Our PR strategy has shifted to ICP in terms of our messaging and the media properties that we're going after, and so on. Our influencer strategy, the trade groups that we're going after. So it's very much the filter and it's the thread across everything that we do. I will say also that we were making— we wanted to make sure that there was no bias to how we were doing this work. You know, we all have our legacy, thinking about what used to work for Mediafly and whatnot. We wanted to make sure that everyone came in with a blank slate. While I was the one who initiated the ICP exercise, it's not about me or marketing doing this on their own at all. I mean, it really takes a village, no question about that. And then because we didn't do this through a third party or consultant, we tried to leverage the, the third parties that we already work with. So Forrester We use them as a sounding board. Our board advisors, we use them as a sounding board. So again, I think if there's no— if you don't have the resources to do this in a, we'll call it like ultra-scientific way, doesn't mean that you can't do it and you can't see the payoff. We've seen it in strides in terms of pipeline quality and close rates and all of our metrics. And yet, you know, it's not perfect, but it's definitely good, if not great.

Well, and that ties into a question that we're seeing in the chat and questions, which is just about, is it wise to focus on ICP when you are seed or Series A or early stages? And I'll speak first, because I'm working with a number of Series A CEOs as an advisor who are working on their fundraising, and part of doing effective fundraising is describing your audience. Describing the audience of customers you have already, people who have adopted it, ascribing— describing very specifically the audience you're going to go after next and why that's believable, and painting a vision for the long-term audience that you think you can address in, in which order. And it may be that you're ultimately getting to all business users in all verticals, but it's a lot more believable if you have it broken up into some segments that get you there one step at a time. And Katrina, I guess I'm going to hand it back over to you. And maybe, Isabelle, you can go back a slide once really quickly. Because I guess I— Back a slide? Yeah, back.

One more? This one?

Yep. Because Katrina, I wanted to ask you a little bit. Again, you've run this process at Series A companies personally. Now you're at this, like, huge company. And the ICP project was actually tied up in a lot of strategy conversations. Because I think you were also talking about, pricing, right? It's like once you get the, the target audience right, then how do you price it right for that target audience? And how, how much sense does that pricing make sense in the context of what else that audience is seeing? So can you tell us a little bit about the process of deciding whether you would run an IC project internally or externally? Because, because you were looking at a lot of these different areas and made that decision?

Yeah, yeah. We ultimately decided, because for our run rate, you know, we were spread so, you know, thinly across, you know, different use cases for different industries, we ultimately needed to take a very scientific approach, a very data-driven approach, because it was de-risking the decision. So, you know, given our run rate, right, so, you know, us focusing and zeroing in on the business that we actually want to do versus not do meant by default that we were leaving money on the table. Now, ultimately, getting, you know, better product out faster, you know, having it be stickier and solve a deeper problem for, you know, customers that are high value will make up for it. But it was such a big decision. So the one thing you don't have when you run something internally, and I definitely will recommend this for, you know, sub-$100 million to kind of run things internally, is that you don't have external data to kind of validate, right? You're just looking at your own sales data, for example, right? Or you're gathering customer insights with just who you have in-house, and sometimes that's not enough resources to do data-driven market research, if you will. So those were our considerations. We needed to go big because it was pretty critical. Yeah. Carol Lou, we can't hear you.

Sorry, I'm on mute. Too many mute buttons.

Great.

Isabel, if you can go down to slide 8. So Katrina, you guys decided to hire an external vendor. You set up a process. Tell us just a little bit more about the process. There was like, you know, like Isabel, like there's this upfront where we are today. There's this research and data process. I remember when you got your slide deck and you were like, they gave us all these insights, but now what do we do?

Yes, it was overwhelming.

Walk us through a little bit of the process. And then I think we have a couple slides that show your persona example and some of the flow. So just ask Isabel for which slide you want.

Yeah, so the first process is not any different from what you would do in-house, which is look at your sales data, look at patterns, really look at the characteristics of your best fit customer plus sales. And you'll see things in the next couple of slides like who is your buyer persona, understanding some of those challenges and pain points and looking for patterns across your install base, right? And you may, and if you have a lot of customers, you're going to have to take a sample of it, right? And it is very institutional knowledge. You talk to your best reps, your customer success team, right? And then if you have a customer advisory board set up, or, you know, you're polling customers, that is the very first step.

And just to jump in there a second, because I think we've done it so many times, but if you're just getting started, the buyer personas that you want, you want the person who buys it and you want the other influencers. Because in most, you know, in it, and, and I think we're maybe, um, leaning here towards B2B SaaS, which is more of our focus than B2C, although all of us have done some B2C. Yeah. Um, in B2C, sometimes you're selling to just one person, although sometimes you're selling to like their wife or husband, or, you know, there's someone else that's also influencing the decision. But in business sales, it's, it's generally a number of people, especially if you look at the personas, not just from the initial purchase. So like one, one developer might buy an Atlassian product, but then what we're looking to do is really massively expand that and really grow the net dollar retention. You know, which is one of these core success metrics for fundraising or for just having a successful company. So looking at that primary buyer and then looking at the influencers as well, I would imagine— That's right. You probably had 4 or 5 different personas.

Yeah, yeah, that's right. Like, you know, with something as hefty as, you know, what a CDP could solve for, right? We were talking to multiple departments. It can be a marketing department. It could be developers that are servicing a product. It could be developers in the driving seat, and actually they're paying for it because they're innovating, and it's PLG, product-led growth. So it's a number of personas, but engineering was one set of personas, product, you know, marketing. The way that we were thinking about it is there's the economic buyer, so this is the person where the— but who's, you know, the budget pays for the product. And then there's use cases, how is the product being used, and is that different. And, you know, in our case, it was definitely different. As we moved upstream, the economic buyer became more and more marketing. But the actual, you know, end users were developers, and that's okay, you know. Yeah, that was kind of our experience with the influencers versus decision makers.

Um, can you go to the next slide, Isabel? So, so you were talking about your process. This is kind of an eye chart.

Yes.

Um, you're— so your process took, um, probably like 3 months or something, right? Like from beginning to end. And you started with this research phase, you incorporated the data, you came out with these insights, and then from the moment of the insights on, that actually was like maybe the most critical period, right? Like, so now, like, how do you make a decision? What do you actually do with these insights?

Yeah, that's right. That's right. It was a pretty involved process. This is an eye chart, but the short of it is you have that inside-out process, which I described looking at your data, you know, gathering your own your own artifacts, if you will, about your customers. And then you have the SIAM process, which is essentially, for us marketers, this might be an easier way to understand. It's a massive lookalike exercise. So you take your own data and you're saying, hey, and we actually had access to 34 million records. So these are company characteristics, both demographic and behavioral intent. And we said, okay, this is, you know, what we know from our own data. But if we were to extrapolate out to 34 million records, right, what other signals and characteristics come out of that exercise that we could then fine-tune what our ideal customer is above and beyond? So we got pretty specific into actual use cases. So things like, okay, for the enterprise, they want to do AI/ML. But what about that specifically? Yeah, so think of it as our big process as internal data. We modeled it out, and then we got very, very specific. I will get to how do we actually take action on it because that's a big piece. But maybe with the next slide, I can kind of talk about that. Also an eye chart. Right. So prior to working with an external vendor, the ICP was never this complicated or this segmented, no pun intended. But what was interesting was they had multiple cuts of this, and it was fancy math, Monte Carlo analysis, a lot of clustering. And we came up with different industries across different sizes. And then the double-click into this is just a wealth of information in terms of characteristics. But from this simple slide, believe it or not, we actually were able to take action. And that was something that I even questioned myself when I first looked at the 5-inch slides that were delivered to me. And how we did this was we refactored our lead scoring. We refactored our account scoring. This was a company-wide effort. To Isabel's point, it wasn't just marketing. And so territory assignments for reps changed. Okay, our industry vertical plays were further refined. Prioritization for the product was, you know, very clear. And that was really, really nice to see. And if I were to say, you know, the biggest impact was really that we didn't feel the pressure to build everything for everyone across all industries. And then, obviously, on the marketing side, everything that Isabel mentioned, you know, from ABM to our messaging and our work with analysts, all of that was refactored as well. And we took the time to— it was part of our job to really get sales enabled and trained. So there was 3 months of you know, analysis and research that went in, and then 3 to 6 months of actually making it really real. That was actually the bulk of the work. I think what finance— and this really benefited across every single function of the company— what finance really, really appreciated was that for the first time they could say, Definitively, this is where our growth is coming from, backed by data. It was really scientific. And our board members loved it, you know, back when we were still a private company, because, you know, if we were leaving money on the table, we were doing it in a way that was smart. Yeah. And the most de-risked.

Well, and Isabelle, you talked about that in our prep. So let's go to the next slide, the gotchas. That one of the hard parts for you and the Mediafly team was that in deciding an ideal customer profile, you actually reduced some volume because you were focused on the right people, but then it turned out to create the right, you know, more revenue. Tell us a little bit more about that.

Yeah, I mean, it's nerve-wracking, no question about it, right? And we had a lot of debate. I, um, all of a sudden you see fewer and fewer inbounds And your pipeline in terms of number of opportunities is decreasing, but the size of the opportunities is bigger, right? And your, your close rate goes up. So ultimately it's all good, but there are definitely these moments of what is this going to do to the inbound? And what if, you know, we don't get the messaging right? And then you question yourself every few weeks or so. We do have this, we still have those discussions. Wow, we had I didn't see much pipeline last week. What happened? Maybe we're too upmarket. Maybe we should— And sometimes it comes from marketing. Sometimes it comes from sales. Sometimes it comes from the CEO. But then we're committed to this and we're seeing it work, no question. It's not going to be our ICP forever, right? I think it's something that you should absolutely be revisiting every so often and checking yourself. And based on, again, how your category is evolving and where you are as a company. And so on. But the psychology of it is pretty nerve-wracking, and the— but I think one of the positives is understanding that it doesn't have to be perfect, right? Accepting that— what's the saying? Perfection shouldn't be the enemy of the great or the good. Start somewhere, and we started somewhere, and I think we'll continue to get better at it. There's still places, things like we haven't quite refined, like personas, but that's okay.

Well, and that one of the questions here is, how often should you reevaluate it? And I, you know, when I think about you two, and knowing about your ICP projects, there was some sort of trigger that brought it about, it was like, okay, great, we're, you know, we need to reach the next stage of growth, or we need to get the sales process more efficient. Or, you know, we're going to go through this big pricing exercise, let's make sure we understand the audience. I like, how often do you think you'll reevaluate it? Like every couple years, like every 18 months?

For us, it's more often than that. Reevaluate as in actual changing, or reevaluate as in having the conversation? Because if it's changing, my guess is it's probably, yeah, probably a year and a half or so, you know, at most. But in terms of the conversation, we're having it every quarter because we plan quarterly, right? We, we We set our goals every quarter. There's annual planning, there's quarterly planning, and at the beginning or the end of every quarter, beginning of next week, we look at things and have the discussion, but it's— we're not changing anything.

Another question is, when should you expand your ICP or go after the second? Katrina, you guys tiered yours, right? So I think you had 15 industries with like 4 or 5 different company sizes. So presumably you're going after several. Tell us a little bit more about the timing of when you added.

Yeah, we do think of things in pilots, right? So as we're steering the company towards another direction, we're not going from, you know, like, you know, I'm making this up, 40% enterprise to like 80% enterprise overnight. So we are kind of phasing it in, right? In terms of industry and kind of these adjacent industries, industries, we're going to go after the primary industry with the primary use case and see how much traction we have. And then when we get enough traction, because we're piloting everything, then we just go down the list. So it's not too, too scientific, but we are not doing like a heavy steer right away. It is phased.

And, you know, again, I think back about Atlassian, because this was one of the biggest debates. We were so strong in developers, but we wanted to grow to serve all audiences. And at the time when I was running marketing, we put in place these divisions. There was a developer division, a business division, and a support division, and they each had their own general manager that was thinking about their strategy. And the head of the developer division was like, we haven't won this market. Like, we can't let ourselves be distracted. We can't move on to these other markets. And yet at the same time, you know, I'd like not to see everything from the fundraiser's perspective, but, but like, to be believable as a massively bigger total addressable market, you have to show some traction in these other markets. So I just felt like, I feel like it's messy, right? Like you want to figure out the ideal customer profile, and then you want to be kind of methodical about starting and really being successful in one before you spread yourself too thin. But this is like all the game of like speed and timing. So I think there's no one right answer to how fast you expand your ICP. So, so I think that's my answer on that one. Let's talk about another one. How do we pick between an ICP that buys quickly but lower profit versus bigger enterprises and bigger deals and higher lifetime time value. Katrina, do you want to take that one?

Yeah, that's a good point.

You guys moved up market more in enterprise, right? You decided—

I would look at— I mean, there's no hard and fast rule, because it really kind of depends on what product and what problem you're solving and types of customers. But generally speaking, I look at, you know, just life cycle of a company. At how early you are on your journey, right? And so I go back to, if you're earlier stage, there was a hypothesis, you know, for why you built your product, and you're really essentially, you know, in the early days kind of testing that out. And if you're a little farther along, right, I still stand by the how easy is it to get a deal, and, you know, do you have enough product-market fit? Because what you don't want to do is actually move up to stream too quickly, because I've actually seen that where companies end up stalling out because their product wasn't ready for enterprise, or they get taken down a path for enterprise, and it's too custom and it's not applicable for, you know, who they should be selling to, to get more revenue, right. So that's, there's a little bit of a dance there for sure. But yeah, just, you know, where you're at on your journey.

Well, and I can't recommend highly enough, and I can't say if this is pronounced his name right, but Tomas Tung's presentation that opened up SaaStr Build this morning about the 5 key metrics that go into your evaluation. I loved it. And I was pulling up a screenshot here, but he had one of the metrics that he shared was how important net dollar retention is. That if, if your net dollar retention, like if you sell a dollar to a customer, like the next year it's, or let's say $100 to a customer, next year it's $120, you know, or $140 or $170, whatever it is, like, and understanding that growth rate of how much you expand within customers through either like upsell or cross-sell. And the data that he showed that he analyzed was that it's just the number of companies that have higher net dollar retentions who sell to enterprises is greater than, than those that sell to SMB and mid-market, which makes sense. SMBs like turn over more, so you don't have the same customers and there's less to grow. If you get full deployment, you can't get it there. So I, you know, I do think there's more money to be made in enterprise philosophically from the analysis. But that being said, it depends on what your, what problems you're your product is solving, right? Freshworks has huge growth really focusing on being optimized all-in-one for SMB, and they've like had that growth by adding on incremental product sets horizontally instead of trying to sell to more people. So yeah, yeah.

And with enterprise, you got to think about, you know, hiring sales teams and just picking the right time to invest in, you know, building out your revenue org, because that will increase your burn as well.

Isabel, do you want to tell us about other gotchas? Like, what else do you think would trip people up if they were going to start their own ICP project after this call?

Would trip people up? The messaging is another one where things can go wrong, right? Because you can do all this work and then you're not putting quite as much effort into the messaging to that audience. And so you're losing— I mean, that is the big aha, right? And the point of doing this is to communicate to them in a way that's truly relevant. And that's one of the things we haven't really talked about. We've talked a lot, I think, about why is it important. It's important because of allocation of resources and strategy and all those things. But I think one of the benefits— I'm digressing a little bit— is also that by being more focused to the ICP, we're also creating a much better experience for our customers and prospects. Why? Because we're not spreading ourselves too thin. We are speaking to them in the language they want to be spoken to. And so to me, that's another watch out would be, are you putting as much effort into the messaging and the campaigns as you were in defining your ICP in the first place. And for us, when I was talking about ABM on steroids, we have campaigns to one account. You know, that's that level of, that level of personalization.

So I'm just going to go back. We're still like trying to read through the chat and questions, and I think a lot of it is How do you go to your next ICP from your first? So, Katrina, can you go back to the slide with slide number 5? Let's see, is it 5? And what should be included? Because I think you could define an ICP as super narrow, right? I mean, it could be like B2B SaaS company, you're going to only sell to B2B SaaS companies in the Bay Area who have a woman CMO. Like, that is an ICP, but it's not a very practical ICP, right? And so the magic of the ICP is you want to be narrow enough that your messaging and sales really resonates and that you have sufficient engineers to develop the right software to make those people happy. But that can be— you know, but that could be wide, right? You could decide that, you know, it's global, It's anyone who will buy from a salesperson. It's early adopter and early majority. It's 3 verticals that are like kind of similar because some of their processes are similar. So I think there's space between having too narrow an ICP and winning it and moving on, or having like a wide enough ICP that lets you experiment a little bit and then refine as you go. And I don't think we can give you a formula for that. That's part of the the magic. Katrina, you're nodding forcefully.

Yeah, if we— if you go to slide 11, I mean, again, this is, you know, we're taking a very data-driven approach, but I've actually— and connect with me offline because I can kind of talk through how to replicate this exercise in a less complicated way and probably way cheaper way. But we're literally going to move from A to B to C, right, to start, right? So when we're done with A, or feel like acceptable Penetration A, we're gonna move to B, to C, right? So there are ways to mimic that, you know, even if you're not doing this big exercise.

Yeah. So I think we're out of time, but I guess I wanna finish with, I think that the point of ICP is like the quote, I'd rather be someone's shot of whiskey than everyone's cup of tea. Like you're just really looking to resonate with people that are gonna love your product, buy it and tell everyone so you can see the flywheel run, and growth will go up into the right. So we just encourage you to think through carefully as a leadership team and work on this really important part of company strategy. Thanks for joining me, Katrina and Isabel, and thanks, Caitlin and the SaaStr team for having us. Thank you guys for joining us. And thank everyone for being a part of the first day of SaaStr Build. We look forward to seeing you tomorrow. Thank you, ladies. I look forward to seeing you guys around. We really appreciate it.