Welcome back, to the email you didn’t know you needed, but now you’re getting.
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Also - some housekeeping.
I screwed up.
I was trying to add new emails in bulk to Substack, to my existing database (we’re at 20k now!).
I downloaded my entire email list and then re-uploaded it with new emails.
I forgot to filter out unsubs.
IF you had unsubscribed before and you get this email I AM SORRY. It was not on purpose!
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This is what it looks like (at the very bottom) I didn’t choose to make it so invisible!
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For everyone else…
Here’s a quick list of what’s coming up.
- 😕 Sales: SaaS Acronyms
- 🔍 Marketing: The Art of Defining Customers
- 💻 SaaS of the week: Fleets
- 🎧 A few other people you should listen to.
- 📚 Other things you should read.
- 🧠 #ScottsThoughts: Looking For A Mentor
😕 Sales: SaaS Acronyms
I really feel like this isn’t discussed enough.
Especially for people who are earlier on in their career, there is somewhat of an expectation to just “know it”.
As much as I hate jargon, there’s some words you simply can’t ignore if you want to understand what’s going on in your company.
Here’s a list compiled by https://weav.com/blog/saas-terms/ of some of the most commonly used acronyms and SaaS terms. You don’t have to memorize them, but this can give you some extra ammo next time you want to go toe to toe with your (or a customer’s) VP Sales.
- Average Customer Life (ACL) – measures the amount of time a customer stays subscribed to a service offered by the company. It can be measured in an average number of days or months.
- Annual Recurring Revenue (ARR) – a measure of revenue using predictable and recurring revenue components such as subscriptions or maintenance, normalized to a one-year period. It always excludes one-time fees and variable, usage, and consumption fees.
- Average Revenue Per User (APRU) – the amount of revenue generated per customer.
- Average Selling Price (ASP) – the average amount of revenue generated per signup.
- Bookings – the dollar value of contracts within a specific period of time. This includes both subscription and non-subscription revenue.
- Break-even – a point indicating that a company has generated enough revenue to cover the cost of acquiring a customer.
- Burn Rate – the rate per month in which a company spends cash before generating profit.
- Cloud – a network of remote servers that are hosted on the internet. It is used to store, manage, and process data in lieu of local servers.
- Cohorts – a group of customers that have simultaneously signed up or took part in the same onboarding group, etc.
- Contextual Engagement – describes a situation wherein the right customer receives the right message using the right channel.
- Contracted Monthly Recurring Revenue – contractually-guaranteed monthly recurring revenue.
- Conversion – the upgrading of an individual from being a site visitor to a user to a customer to a referrer.
- Customer Acquisition Cost (CAC) – the average amount of money spent to acquire a single customer. It is calculated as the sum of all costs incurred in the acquisition of a customer, including sales and marketing expenses, divided by the number of customers acquired within a given period.
- Customer Churn Rate – the rate at which customers are lost through cancellations or failure to renew their subscriptions. This is presented as a percentage of the customers lost to churn over the number of customers at the start of the period for which the churn rate is computed. See our churn rate and SaaS churn posts for more info.
- Customer Experience – the entirety of a customer’s perception toward a company, brand, or product, based on all interactions, touchpoints, and engagements.
- Customer Lifecycle – a concept describing the process undergone by a customer when interacting with a brand or business. There are four critical stages involved in the concept, namely: acquisition, adoption, retention, and expansion.
- Customer Lifetime Value (CLTV or CLV) – a number used to predict the net profit that can be gained during the entire relationship with a customer. It is the amount of revenue gained between the break-even point and the end of the relationship with the customer.
- Customer Relationship Management (CRM) – a term that refers to the practices, strategies, and technologies used by companies to analyze and manage customer interactions throughout the customer lifecycle. It aims to improve customer service relationships to drive customer retention and improve business growth.
- Customer Retention Cost (CRC) – expenses made by the company through efforts made to retain customers. These costs include salaries of employees responsible for customer retention, marketing efforts, and other costs.
- Customer Retention Rate (CRR) – measures the amount of customers remaining after a period has passed, but does not include new customers. This value is the complete opposite of the churn rate.
- Dunning – a strategy when your customers fail to make their payment on their renewal date and they’re at risk to churn. You kick off a series of dunning emails you can increase your chances of collecting failed payments or avoiding failed payments altogether. See our Dunning Emails post for more info.
- Freemium – a strategy that provides users with limited access to a piece of software free of charge. This aims to entice users into subscribing to the service to enjoy the full benefits of the software.
- Free Trial – customers receive full access to service of software for a pre-determined time frame. e.g. 7-day free trial before you’re charged.
- Monthly Recurring Revenue (MRR) – the total amount of revenue from subscriptions expected every month.
- Multi-Tenancy – a term used to describe multiple companies subscribing to a specific service being placed on a single server.
- Personalized Customer Experience – the process of designing and delivering targeted messages to the customer to create meaningful customer engagements and improve the customer experience.
- Product Engagements – the sum of all the interactions prospects have with your products.
- Product Life Cycle – defines the progression of products through the four stages of its time on the market. This framework helps companies organize the marketing and sales of a product.
- Product-Qualified Leads (PQL) – prospective clients that have signed up and demonstrated interest or intent to buy or subscribe based on their behavior, usage, or interest on the product.
- Retention – the result of providing value or keeping your customers happy to stay on as active customers.
- Retention Rate – the rate of how well you’re able to retain customers.
- Revenue Recognition – the recognition of revenue from a contract at the time it is earned and never before.
- Service Level Agreement (SLA) – an agreement that defines the level of service that is expected from the service provider.
- Signup-to-Customer Rate – the percentage of users that have signed up that become paying customers. This value demonstrates how well your company converts signups into paying customers on average.
- Total Contract Value (TCV) – a metric that represents the value of one-time and recurring charges but does not include usage charges. It is useful in planning expenditures and managing the growth of businesses.
- Unified Customer Profile – a comprehensive profile of a customer that presents an overview of the activity, history, characteristics, and preferences of each customer. It integrates multiple sources of customer information into a single profile to provide a complete view of the customer.
- User Onboarding – the process of getting newly-subscribed users or customers acquainted with the product or service. This process entails training, setting up accounts, and providing assistance to the customer with integrations. This ensures customers will see the full potential of the product or service to improve retention while also expanding the business through referrals. Here’s an awesome resource to see the webs most popular user boarding tear downs.
- Value Gap – describes the discrepancy between the expectations a customer has for a product or service and the actual or perceived value received.
- Value-Based Pricing – a pricing model that involves knowing the product features that customers value the most.
🔍 Marketing: The Art of Defining Customers
Todays marketing story comes from Saurabh Bhatia, who does an incredible job of break the art of defining customers. as shown through Carhartt massive success, longevity and diversity of adopters & product. Read on. 👇
The Art of Defining Customers
Written By Saurabh Bhatia
There’s only one thing that I am not a big fan of, and that is Average companies.
Average companies make products for average people. When I say average people, I am implying the people who don’t care about anything. People who don’t belong to any tribe.
Things get a bit complicated here because this concept is hard to put into words. Stay with me and try to understand this.
- I, personally, don’t like companies that make products that people buy after sorting by price. They are making average products for the masses. The products don’t have a story behind them.
- To some extent, it’s okay, because not everyone cares about the vest they are wearing, or if the sock matches (or mismatches) the trousers. Just that, no one talks about these products, and even I don’t. These products can create multi-billion-dollar companies, but not a BRAND. Creating a brand isn’t just about solving a problem, it’s about solving a problem while telling a story.
- Products with stories create tribes, whereas products without a story create averages.
A well-defined audience
Whenever you start a new venture, no matter what it is, it is important to define your target audience. If I write a blog about football, my target-audience would obviously be people who love reading about football. That’s easy.
Now, if you are opening a new merchandising company, even then, defining a target audience should be easy. If it isn’t, then you are opening an average company. Vans decided to make shoes for skateboarders. Skechers wanted to make comfortable utility shoes for people who aren’t obsessed with looks.
Little Mismatch, that sells colorful socks, in a set of 3, and none of them match. They have no more than 133 styles. Their target audience? Little shy girls who didn’t know what to talk about during their lunch break. What better way to start a conversation than by saying “Wanna see my socks?”.
Their current net worth is more than $100 million.
Similarly, Carhartt made products for industrial workers, construction workers, railroad workers, blacksmiths, goldsmiths, plumbers, farmers, stable workers, and many more.
Carhartt is basically a brand for blue-collar workers.
When you learn a new word, you see it everywhere. Similarly, if you’re in North America, from now onwards, your eyes would keep seeing this logo again and again and again (if you haven’t seen it already).
Just because it is making a product for a vast audience doesn’t make them an average brand. Their products had a story behind it. Carhartt created a tribe of blue-collar workers who wear strong, durable, and long-lasting clothing. The clothing exemplified the “tough” personality of these workers, the same way that Warby Parker exemplifies personal and affordable designer eyeglasses (does using affordable and personal next to each other constitute as an oxymoron?).
Brands like Carhartt lead to conversations like “You’re wearing a Carhartt. Look, me too”. Conversations lead to the formation of tribes. Tribes lead to sales, and sales solidify a brand. It’s a vicious cycle; without the vicious part (obviously).
There’s a saying that I love a lot. I have used it several times to act cool in front of my friends.
This is an Irish proverb. A well-defined audience is a good start, and a good start is half the battle. That’s exactly what this proverb translates to.
Not so-well-defined audience
Do you know what follows when you have successfully created a tribe and when people start talking about you? More people.
This is a part of what I call a “Not so-well defined audience”. I just coined this term, and I am proud of it.
The not-so well-defined audience comprises of people who don’t necessarily resonate with the buyer persona that you created, however, they are here to buy your product because they have seen someone else talk/use/wear your brand’s product. Observational Learning is a powerful tool.
Not every person who wears Vans is a skateboarder. Not every person who buys socks from Little Mismatch is a teenage girl struggling to find topics to talk about. And obviously, not every person who wears a Carhartt bib/jacket/cargo/cap is a blue-collar worker.
Barack Obama wears Carhartt. George W. Bush wears Carhartt, and so does his cook. Rihanna, Drake, Kanye West, and other celebrities have donned Carhartt merchandise as well.
The biggest issue with is a not-so-well defined audience is that businesses usually start with it. I have seen a lot of small business owners having no sight of who to sell to (and hence not-so-well defined audience). They think that you would get to know your ideal customer when you start selling.
This highlights a wrong business foundation. Don’t make a product and find an audience for it. Find an audience and make a product for them. Solve problems. Don’t create one.
You first learn how to pass the ball, and then you learn how to shoot. You first learn how to do a baby freeze, and then you learn the rest of b-boying. The order is important.
Coming back to Carhartt, they solved a big problem. They made tough clothes for workers that stood the test of time. They didn’t make clothes and then found an audience to use it. They chose an audience and then made products for them. The order is important.
Carhartt is now a billion-dollar brand, and its $16 watch hat is its most famous product. Have a look:
The company was started by Hamilton Carhartt in 1889. He started with two sewing machines and a half-horsepower electric motor in a small Detroit loft.
The brand’s motto has always been “outworking them all”, and usually, that’s the essence of all blue-collar workers. Carharrt executives, to date, claim that they never wanted all this publicity. They just wanted to make quality products for their customers, and they still do.
Their clothing stands the test of time, and so does the art of defining customers.
Written By Saurabh Bhatia
Saurabh is a marketing student who has worked at Google as an Ads Account Strategist. I also have a weekly newsletter that talks about marketing. Marketinggrads.com
💻 SaaS of the week.
Whatever you want to call them, they were released, platform wide - on Tuesday.
Short form is in. Casual is in.
That thing you didn’t Tweet but wanted to but didn’t but got so close but then were like nah.
We have a place for that now—Fleets!
Rolling out to everyone starting today.
— Twitter (@Twitter)
Nov 17, 2020
It seems like everyone’s jumping on the short video bandwagon.
We’ll get some stories in sheets & excel before you know it.
🎧 A few other people you should listen to.
If you’ve learnt from major players in the sales space, there’s one individual who’s name you’ll hear again & again, He doesn’t from a traditional sales background, but still provides immense value and insight into the world of negotiation.
Chris Voss. Ex-FBI hostage negotiator.
After a lengthy career negotiating deals that had a serious consequences if he lost them, much more than you missing your q4 target.
Chris retired from the superhero life to translate some of the tactics he learnt in the FBI to actionable insights for sales practitioners and leaders.
Here’s his conversation with the equally as impressive, James Altucher.
📚 Other things you should read.
In celebration of our actual medium publication launching, I’m going to link the work of the incredible authors who have taken time to write down their thoughts on some sales or marketing topics. They deserve some love, and I always enjoy learning in small bite size chunks (as oppose to long form books), so I hope some of you do too!
- How to Get Started with Evergreen Sales Funnels - Fab Giovanetti
- Newcomers Guide to Etsy - Ryan Adams
- Focus Your Best Marketing Into Free Presentations By Busking Out - Caelan Huntress
- Client Acquisition Made Easier ( For B2B Industries ) - Melanie Stewart
- Don’t Leave Business on the Table - Jacquelyn Lynn
🧠 #ScottsThoughts: Looking For A Mentor
I’m going to keep this thought very short this week.
When you’re looking for a mentor, look for a mentor that teaches you how to think, not what to think.
There is a massive difference in between the two.
You’ll also know exactly what I’m speaking about when you find this kind of person.
When you’re working with the right mentor, you’ll feel like you’re having lightbulb moments every single time they speak to you, even though they aren’t saying much.
They’ll point out the most obvious things and connect the dots right in front of you between two dots you didn’t even know existed.
You’ll feel enlightened and empowered and confident.
It’s an amazing feeling.
Look for a mentor that makes you feel like this.
That makes you feel like you’re leveling up your brain every single time you chat.
That’s who you want to have by your side.
That’s all for this week!
Remember, if you want to chat about sales & marketing, hit me up (reply to this email) and I’ll get you set to write on our medium publication!
Or… you can fill this form out, and I’ll shoot you an email!
Also - let me know if you like this format. It’s a little longer, but I hope there’s some true value here.