What are the best customers for B2B SaaS? This is a question that many people in the industry spend time trying to answer, but few of them have come up with an effective solution.
The truth is that it’s hard to tell who will be profitable and who won’t. You can look at their company size or revenue, but this might not be accurate because some companies do business in different ways than others.
In this post, we’re going to talk about how you can analyze customers and identify which ones are worth investing time into so you don’t waste resources on those that aren’t profitable!
Identifying the best customers is a difficult task for B2B SaaS businesses. Most will, at best, build SaaS buyer personas on which to base their marketing around — but there is a lack of refinement that we feel is at the root of many marketing issues that businesses face.
If you are:
- Seeing low engagement and an increasing customer acquisition cost (CAC)
- Only converting a small percentage of trial users into regular customers.
- Being turned down for demo appointments or having a poor conversion rate on demos.
- Seeing a high customer churn rate and a below-average customer lifetime value (LTV)
This article will provide you with a systematic process to strategically identify your best customers based on real data and customer feedback.
I’ll show you how to collect the necessary data for analysis:
- Examine the customer relationship management (CRM) data to find the customers who spend the most and have the highest lifetime value (LTV).
- Get the sales and customer service departments to assist you in identifying your actual best customers (not just the customers they most prefer to sell to and serve).
- Conduct an email survey to obtain valuable feedback from current customers who have given you a high net promoter score (NPS).
Then I’ll show you how to put all of this information together in a way that makes sense.
But before we get started, let’s see what are the 3 common misconceptions about this topic.
3 Misconceptions About Identifying Your Best Customers
Although these three assumptions seem to be self-evident, a closer look reveals that they aren’t always true.
1. Highest LTV Customers Are the Best
Many SaaS businesses believe that their best customers are those with the highest LTV, but this isn’t always the case.
Some of your customers will never unsubscribe, and will rarely (or never) log in to use your product. This is especially true for lower-priced SaaS services. Alternatively, they could have purchased a single service and never added any additional services or upgrades.
When it comes to identifying the best customers, LTV should be considered, but it isn’t the only metric to look at. This payment metric must be combined with others such as usage, net promoter score, and account expansion revenue per account.
2. Customers Who Require the Least Amount of Attention Are the Best
It’s easy to believe that consumers who have the least amount of complaints are the best. Low-maintenance clients, after all, take up less of your time and resources, right?
Those who take the time to make a complaint, ask a question, or provide feedback, on the other hand, often show above-average customer engagement and are the ones who care the most about your service.
As a result, failing to examine high-touch customers more closely is a mistake — some of the best customers can be found here.
3. Customers Who Are the Easiest to Close Are the Best
Finally, the customers who sign up for your service the quickest may turn out to be your best customers. And at least some of them will likely be.
Customers with a somewhat longer sales period, however, should not be ignored. It’s usual for the best enterprise customers to take a long time to close.
Need help with finding your best customers? Our team is ready to jump in and assist you.
4 Tactics to Analyze and Identify Your Best Customers for B2B SaaS
When you combine these analysis techniques with comparing and contrasting the findings (which we’ll go over in the synthesis section below), you’ll be able to:
- Refine your SaaS customer personas
- Improve your targeting and audience creation for PPC campaigns
- Increase customer retention, average LTV, and monthly recurring revenue (MRR)
Over time, the aim is to attract more ideal customers while reducing average and poor customers. Let’s start with tactic number one.
1. Analyze CRM Data for Highest Paying Customers and Highest LTV Customers
As previously said, LTV isn’t everything. However, it is one of the items you should consider during the customer analysis phase. And the best part about this step is that it has almost no friction. There’s no need to speak to people; you can start gathering data right away in HubSpot or Salesforce (or whatever CRM you’re already using).
The goal of this move is to search through your CRM for customers who have paid the most and have also been with you the longest. Also, take notes during the process (this applies to the following steps as well).
The following are some of the questions you should try to answer:
- Which customers have relative longevity?
- Which consumers have upgraded their plans and purchased extra services or add-ons?
After that, you’ll add these customer names to your list in the same way that you did in the previous steps. This can be done in Google Sheets, an Excel sheet, or some other tool.
It’s completely up to you whether you write your notes simple or in detail. When it comes to spotting commonalities, it’s sometimes good to keep things simple (eg. Company X, pays Y, customer since 2XXX). These notes can be entered directly into your spreadsheet.
2. Talk to Your Sales Team and Ask Them for the Company Names of Your Best Customers
Don’t ask questions like, “Hey, what kind of customer do you love working with?”.
If you ask it, you’ll probably get something like this, “I like dealing with the decision-maker at the top of the organization who has a budget and wants to buy right now.
The problem with this is that it’s based on what the salesperson wants rather than what they have and work with daily.
Instead, the goal of this phase is to identify companies that were looking for a solution, created significant friction through asking good questions, and closed within a reasonable or ideal sales cycle.
It’s better to ask something like, “Let’s walk through your last number of X deals” (eg. all of your 2020 deals). Who did you close, starting with the highest-value deals, and how did the interaction look like?”
You might ask:
- What can you tell me about the conversation you had?
- How long did the onboarding phase take, and what was the buying cycle like?
- What did they ask about?
- What were some of their concerns?
- You’ll then add these business names to a new tab in your spreadsheet.
Then, in your spreadsheet, make a new tab and enter these company names.
3. Talk to Your Customer Support Team and Ask Them for the Company Names of Your Happiest Customers
Chat with your SaaS customer success managers and go over your company’s help desk software.
The following customer success metrics are worth paying attention to:
- Individual support tickets
- Customer responses to post-support surveys (e.g., happy/sad faces, 1-5 ratings, etc.)
- Any internal tags relating to customer satisfaction or the role of the company (eg. Evangelist, Super User, Frustrated, Daily User, Manager, Check Signer)
You should look for answers to the following questions:
- Who are the companies that have provided positive feedback on their support experiences?
- What were the concerns of these customers?
After that, you’ll write down some notes and add these customers to a new tab on your growing list.
4. Conduct an Email Survey to Poll Existing Customers Who’ve Given You a High Net Promoter Score
In this step, look through your net promoter scores and read through the reasons why people gave you those scores.
The goal of this step is to:
- Find out the names of the companies that gave you a score of 8 or higher.
- Figure out what it is about the product that these businesses love.
- Then send them an email to see if they’ll share anything about their customer experience.
For example, you might send them a short email that looks like this “Hello [First Name], We’ve found that you’re a high-performing customer of product X. We’re gathering feedback from customers to improve our product. And we’re curious if you’d be willing to tell us about your experience so far. To start, we have only one question…”
Some of the question you can ask:
- What do you like most about the product?
- What helped you the most?
- What features make it easy to work with?
- How did you feel before and after using our product?
Take notes throughout, and add the company names of those who gave you an 8 or higher to another tab in your list, just as you did in the previous steps.
Synthesis Phase: How to Use this Information Once It’s Collected
You can investigate the different tabs of your spreadsheet to see whether there is any correlation between the various sources of customer data you’ve analyzed.
You may, for example, ask, “Which customers did our sales team classify as some of our best, and which customers did our customer success team identify as among our happiest?”
You’ll also want to look at:
- How our high NPS customers compare to our happiest customers.
- How does it match up against the best customer list from our sales team?
- How do the lists from our sales and consumer success teams compare to our list of highest-paying and highest-LTV customers?
See where this is going? You’re simply searching for similarities among the lists you’ve made. And the businesses that appear on several lists are more likely to represent the best customers.
Now you can also use this list to:
- Update your SaaS buyer personas to represent the qualities you’ve learned about your best customers.
- Update your SaaS website based on what you’ve learned.
- Improve the quality of your audience creation across all of your acquisition channels (eg. create Facebook lookalike audiences based on this list)
You may also start allocating more budget to paid acquisition channels to select companies that are most likely to be the right customers.
Don’t be afraid to test things. When you find what’s working best, execute hard.
Measure it, fine-tune everything, and repeat.