How turning customers away increases retention.
Co-founder and CMO
Today on the show we have Steffen Hedebrandt, Co-founder and CMO of Dreamdata.
In this episode, Steffen shared how documenting quality content and sharing it on social opened many doors for him, he also what Dreamdata does and how they offer multitouch account-based attribution.
We then dove into the power of positioning and understanding who your ideal customer profile is on churn and retention, how Steffen and the team orient all their marketing and sales efforts around their ICP for healthier retention, and he explains why they turn customers away that don’t fit their ICP.
[00:01:29] Andrew Michael: Hey, Steffen. Welcome to the show.
[00:01:31] Steffen Hedebrandt: Hey, Andrew, I'm happy to be here. I'm looking forward to the
[00:01:35] Andrew Michael: conversation. That's great to have you for the listeners.
Steffen is the chief marketing officer and co-founder of team data at B2B revenue attribution platform. And prior to dream data, Stephan was the head of marketing at a time where he joined as the first marketer and seven was also previously the country manager for the Nordics and Upwork. So my first question for you, Steffen is what has been your hardest personal challenge in starting dream data?
[00:01:59] Steffen Hedebrandt: Let's [00:02:00] do two things. One thing is deciding. Go full-time entrepreneur because like I've always been working. I've been working in startup and growth companies, but like saying, okay, now it's the time to put put, all chips on the table and do it myself that wasn't really hard to incision.
And then. Being the only commercial founder of three people that I did all the first sales and did all the first sales leadership. And, I have had absolutely no experience with sales. Realizing that sales is an actual craft. And, there's so many things that matters in sales came to me a little bit as, as a surprise, because of course I've always been doing marketing and growth, which is, Hey, I'm serving you all these great leads.
There's so much demand by not selling more. The slide decks are ugly. We have bad reviews instead of, so that said, there's so many things that actually employ That makes it harder to sell and little by little you're learn that it's a craft [00:03:00] first as a craft of being a good salesperson that knows the craft of being a good sense leader.
And, you can really master all of it so fast enough.
[00:03:09] Andrew Michael: Yeah. That's very interesting. And I think obviously then from a marketing perspective, you get a new appreciation for the relationship between sales and marketing as well. And. Yeah. And you mentioned that you found it really hard to make that leap and to jump into entrepreneurship which had just before the shows or the GA actually started out as a blogger for Boston and w with the idea of maybe one day starting something like, how did you get going with that?
Because obviously we mentioned that's exactly what I did with this show. The idea was just being like, I wanted to start a new business. I wasn't sure what I wanted to do yet, Tom. So I said, let's just start building an audience. How's that?
[00:03:43] Steffen Hedebrandt: So I think if, I think back, maybe I was in 2010 started following a Gary Wiener, Chuck back when he was still really small, but I could just see that kind of, he was just constantly saying this thing about, document what you do document don't [00:04:00] create.
I'm not downward. And so I can just start writing about it on blogs, maybe on LinkedIn, on Twitter, on Instagram, et cetera. I see this kind of all my social media as a tool that I need to use for the rest of my, probably my working career. So no, the more reach and the more quality that I can put in.
Those channels. The more I can also extract from it. And some point when I went on.
[00:04:29] Andrew Michael: Yeah, for sure. I think the main focus, like you said, just having that emphasis on quality content going out and pays itself back for me. Like the podcasts originally was really just to start building an audience and then I've just keep getting surprised by the different ways that it delivers value back.
[00:04:44] Steffen Hedebrandt: Yeah, I think the most, the bigger thing also now we're pushing really hard on social selling at Dreamdata now, and now you don't see. Most of the things it's, I think it's a little bit like an iceberg that you, you see the tip of what the value it creates for you, [00:05:00] but it's also opening tons of stores that you will never ever find out about.
So just through appreciate when you find out about some of the things, but I should say, so if you're putting out good quality, this good qualities, opening so many doors for you. You will not even find out.
[00:05:17] Andrew Michael: Absolutely. So talking a little bit about dream day to then obviously a B3 revenue tuition platform, but maybe you want to give us a little bit of an overview why you're different to existing solutions.
Yeah. So it's
[00:05:27] Steffen Hedebrandt: a dream that is basically. Go-to market data platform. In essence, it's a place that, to which you connect every single tool that touches your account journeys. So that's from the first touch of ads to visits on your website, to the actions of your salespeople and customers. So test people and, when does start using your product.
If there's a digital touch anywhere, we want to pull it over to, to print data. And then we keep an account-based data model on your behalf. Where's the customers coming from? No, ultimately if they churn, [00:06:00] which channel did they enter from? What did the sales people sell them, et cetera. So we try to be that hub that instead of you having eight different data sidles.
It's with their own little part of the customer journey. We just connected to dream data. Then we extract the data and clean it and join it and, make it easily accessible for your employees. Very
[00:06:22] Andrew Michael: cool. And how has that then different from like a, something like a segment, a customer data platform.
[00:06:30] Steffen Hedebrandt: So in some ways where a. We are a B2B CDP with a purpose. So w we are building to do customer journeys, to do an account-based data model with a tool like segment it's very much DYI. So like we can dump all this data into a data warehouse for you, but then you need to make sense. And what we've said is that, yes, you need the segment tracking data, but you also need some CRM data and you need some [00:07:00] customer success data, and we pull all of it in and then model it for you.
So it's this. Do you want to build it yourself and hire for data scientists and spend a ton of money on it? Or do you want to just let us do it
[00:07:14] Andrew Michael: cool. Yep. And. Sort of attribution being one of the central points, then being able to understand where the customers are coming from, what closed the deal?
Very nice. And I think like in the context of general attention attribution is really something very powerful to understand and know because ultimately if you can see what channels you're requiring customers from, which. They tend to stick around with and where you finding your best fit customers it can save you a lot of pain future.
[00:07:42] Steffen Hedebrandt: I think there's some people that think very narrow when you say attribution, but I think very broad to me, it means get all the data that you have available into one place. And then you can take the revenue component from your CRM. You [00:08:00] can have an opinion about what is the most valuable thing for me, it's about getting every single touch on that customer journey into somewhere.
Then you can do attribution, but you can also inspect whether that one email is working and so forth. You can also say if the first touch, is that going to increase the likelihood of churn or if it's gonna decrease.
[00:08:21] Andrew Michael: And then, and that's are you doing then multitouch account-based attribution.
So looking at both, all the touches across the specific accounts, looking what does the first and last, how that spread without the organization and yeah,
[00:08:33] Steffen Hedebrandt: so w our data model is account-based. So we've been, we believe that there's such a thing as a world. One company is selling to another company, which in like speaking of segment and all the other tools out there is that they're still individually based.
They're based. Yes. We can see, for example, when we sell dream, there's five people involved in a deal in average, or we know five emails. And if [00:09:00] those five emails were just operating independently, they went no clue what's going on. Yeah. Oh, a data model. It keeps a timeline of every time there's a touch in the account and that's the transparency we're trying to
[00:09:13] Andrew Michael: provide.
That's great because I think that's also one of the big things. And then when people get started with like attribution products is generally, they tend to see like a large percentage of their acquisition coming from direct sources, but that's not necessarily the case where that account specifically discovered it from because it's like somebody sees an ad somewhere or reads a blog post, or they discover some piece of content.
They go in and then they shared with a team, but that might be a link on slack directly to the sites. And then for all, it's just a direct a direct traffic, but ultimately it wasn't really, there was another touch that happened before that. And yeah.
[00:09:48] Steffen Hedebrandt: Yeah. I simply extend, we can be let's say those four touches before a demo call is booked.
Then the first click can be from like a Google search ad. Let's say somebody searched for customer [00:10:00] sex success, and then you're arrived to your website. Then the next time they come to the website, they organically Google your brand name. And then they come one or two more times just directly to the website.
If they booked a demo call there, it looks like direct was. We're in fact, there was actually one of your ads that actually started that journey. And if you don't see this, you can't spend your money in a reasonable way or you're growing a lot slower than you, you could be
[00:10:28] Andrew Michael: doing. Yeah. And then it gets a lot more complicated when you look at adding on team members to that as well.
And sometimes the person that actually signs up for the product and creates the account might even be in finance, who never, ever saw an ad. And just what that link from the team members. Cool. And then in the context of it, like how things been going at dream data what's been one of your challenges when it comes to churn and retention.
[00:10:49] Steffen Hedebrandt: So I was just anecdotally telling you this before we started, but we've really done a lot of work around our ideal customer profile and our positioning of what is [00:11:00] the product and who is it good for? Let me just give a quick shout out to April Dunford wrote a book called obviously. About how to nail product positioning.
So customers get it, buy it and love it. And I think this book has it's gone hand in hand with our work on ideal customer profiles because in the beginning, when you start a new company, just so desperate to sell the Judas, you just sell to anyone. Who's going to be willing to buy your product.
But then you realize when the contract is up for renewal, You actually sold to somebody who were not in a good position to renew or the product was not positioned to make the customer super happy. And then little by little we've learned that for us, are an ideal match is a B2B SAS company.
In the beginning, we were selling to hardware companies, manufacturers, logistics, companies, all sorts of things. But what we found out with our product is that. We want companies who produce a lot of digital touches, [00:12:00] because those are the ones we use to actually understand what's going on. And with SAS companies, you get, you have to, all the marketing spend is digital.
The sales pupil sit with inside sales tools and the product is delivered digitally as well. So we can you can close the loop of the customer journey. Whereas if you sailed sold, sell to our hardware manufacturer, there might be some digital stuff. And some log calls, but you have no clue who ended up buying the product and you know what, then you lose those customers at some point.
So I think my best advice to people just thinking about churn or a new to it is to think about who is your ideal customer. Perhaps easier come up with a, an entities as to what, who is your ideal customers. So know when an email converts to say, this is from soft, we should try to sell to these guys, or these 10 are going to be happy and they're going to churn even if we could solve.
[00:12:57] Andrew Michael: Yeah, that's very interesting. I think April [00:13:00] Dunford as well, we had on the show, we'll add that link, that episode to as well. Yeah, definitely an amazing book. And I think it really is one of those things that a lot of people underestimate is really the power of positioning. And then secondly, like the power of, and really understanding who your ideal customer profile is because as you mentioned in the beginning, you might want to sell to anyone and everyone.
And that's ultimately what's causing you a lot of pain when it comes to generate attention. It also has a counter point as well that typically these customers need a lot more support and they bring a lot more pain to the company. So he ended up spending a lot of time serving people that aren't really the best fit for your business.
And ultimately not doing anybody justice or anybody, the good service. So walk us through, like, how did you figure this out then? What were your steps that you took to realizing when was the moment when you said, okay, Oh shit. There's a problem. We need to figure this out.
[00:13:52] Steffen Hedebrandt: It's the first of all, it's always, as you start a company you're desperate and if your bank account is low, you're just, [00:14:00] sometimes it's very hard to resist to do the sale if it's just adjunct doorsteps. But I think. When we started to have the full at first customers up for renewal, you start to think about, oh, I wish it wasn't this type of customer, because then I could at least not believe that they actually must not a good fit for the product.
I think when you're in these subscription businesses, you start to realize that once the subscription is up for renewal, you start seeing the pains. Why are they not happy? What could we have done more? Should we have read that? And if you just sell two bad fits, there's probably not much you could have done at the end.
And then I, one of our investors has also been good at pushing us towards this direction because. No, we have seed stage investor style and we're raising a seriously now. And they probably know that the numbers that these guys are going to be looking at this numbers about June. So
[00:14:51] Andrew Michael: yeah, that's not getting
[00:14:53] Steffen Hedebrandt: focused there.
And you're also both in a churn perspective, but also in a growth perspective you need a clear messaging. [00:15:00] Now, if you are to say something to another person about. It cannot be like a long, 10 page, long story about what it is. It needs to be quite clear about who's it for and what does it do? Otherwise that message can't really travel.
And I think what we've also found out is that with an ideal customer profile, defined and also enforced, is that all other decisions become such an issue. Should we build this feature or should we build this feature? Which words should we use in the blog post for us, it should be like in quotes that SAS companies, like who should we make case studies with text goes on a website, et cetera, et cetera.
So if you really start like making your ideal customer, yeah. It should be like the north star. All the decisions you make. Then I left a lot of things become so much.
[00:15:53] Andrew Michael: For sure. And I think the point you make is on the beginning, like when you just need to get things working and you need to generate revenue, it's all right.[00:16:00]
To sell them to those companies. Like even knowing, because I think what they allow you to do is to build up that runway to build the fuel so that you can find some more of the best fit customers and get to the point where you can actually realize that, okay, this is something that we need to fix.
[00:16:14] Steffen Hedebrandt: Then when we started enforcing it, I would just say also it takes away.
Deal of patients have thinking we are, you're easily looking at six months, maybe even 12 months before the market starts to repositioning inside their own head about who are you for and what do you do? So it also takes some. Persistency or faith in that you have made the right decision and now we should keep
[00:16:40] Andrew Michael: enforcing it.
Yep. And so you got to the end of the first year, I'm assuming like you're doing yearly contracts can correct me if I'm wrong. And then you realize, okay this is a problem for us. We need to figure out who this ideal fits looks like. What are the steps you took there to realize what was the data [00:17:00] you were looking at?
What made you get through realization?
[00:17:03] Steffen Hedebrandt: I think it was really rooted in where the product is most likely to succeed. So like we want to help people understand their customer journeys and if we are to do we'll need a lot of data about their customer journeys. Little by little, you get to a place where you can see, oh, it's probably SAS companies will produce a lot of data, but then you can go even deeper.
And then you can say, who actually they have no manpower and capital to, to have a product like this. Okay. But then maybe they shouldn't be more than 50 people. Ideally they should also have investments. So the investors are going to be pushing for those numbers. And yeah, we prefer to me English speaking.
So maybe it's just Europe and north America. So you can really like, you can go so deep into it as you like, just critically ask yourself, do we more know more about them? Is it a certain CRM system that is even better at delivering for? [00:18:00] And the more specific you can be? The also the more targeted with the features, the advertising to salespeople, et cetera.
[00:18:08] Andrew Michael: Yeah, for sure. I think like for us previously, when I was at Hotjar, I worked here with the team, a lot of this research around like identifying our ideal customer profile. And one of the things I think like that hit me in one of the big realizations was that. We originally started out just like you as well, looking at the data, trying to understand, okay, what is the best fit?
And actually looking at, say in our case, it was like month to month was like monthly subscriptions. Typically we didn't have many yearly subscriptions, even at the time. I think when we did the research, we didn't even have a yearly plan. The first time around and again, what we did was I quivered stick around for the 12 months spending over a certain amount.
And we started to look at what are the firmographic and demographic properties which is great. It's served us well. We had a good understanding. And I think what we realized over time as well, and probably this might be something that you come to a new realization as well over like a few years.
Is that when you first do this work, [00:19:00] your ideal customer profile that you look at when you just looking at data alone is that it's a direct reflection of the product that you have today. And the marketing that you've done up until that point, because those are the people that do the door and sometimes over time, like you might see new opportunities or the market might be evolving in new ways and.
The ideal customer profile then can change and it can shape. And then it does, like I said, change all those decisions when it comes to product and when it comes to marketing and so forth. But it's definitely a very interesting exercise to continuously do.
[00:19:29] Steffen Hedebrandt: Yeah that's probably very true that.
Probably good to pull it up once a year or something like that to say, do we still believe that this is the right direction? Or do we want to set up a soft team that can address this new part of the market, but some continent, the website for those guys
[00:19:47] Andrew Michael: that, yeah. Yeah. As the market's changing, are the trends moving in a different direction?
Is there some big seismic shift it's changed? The way people operate today? But very interesting stuff. And then, so you mentioned like it took about six months [00:20:00] for the market to understand can you explain that a little bit? Cause it's all in my mind and somebody like a, in transparency for us, like I have a startup as well called everyo where like in this phase now where we just really trying to figure out to now our positioning.
I w like how, in my mind, I wouldn't even worry about like the market itself, because I think we so small and insignificant at this point that nobody really knows about us. So what do you mean by took six months for people just to understand that and see the shift.
[00:20:30] Steffen Hedebrandt: This like this positioning or whatever we want to call it. It starts with a paper exercise that you do inside of your own company. And then at some point you say, now we've analyzed enough. We've written everything down, but it doesn't mean anything because nobody knows about it. It's just you and your team that agreed upon this is our ideal customer profile.
But as you say, it was so small, then who cares? And ideal customers actually only real when you actually also start [00:21:00] acting upon it, meaning that does this. So I can just go through a bunch of fix things we do. So when we have a conversion on our website, we have somebody who manually looks at that email say is design ideal customer profile.
Yes, no, if no, we just put it into it. We use HubSpot and then it just goes into. Close last comment column. We can't use that for anything. If it fits the ideal customer profile, we assign it to a salesperson. This one you can work on because they are likely to be happy. They're likely to be willing to buy our product.
So we do another thing is that we do a lot of social selling on on LinkedIn. And I dunno if you know it, but you have a hundred connects a week. And I will say everybody in our company are only allowed to connect with people who fits the ideal customer profile. So the audience we are building.
It's also going to watch our ideal [00:22:00] customer profile. So when we do all this social selling on LinkedIn, we try to post anywhere between one and five times a week per person there, the content we put there, somewhat minded towards the ideal customer profile and the audience we're building is the ideal customer profile.
We've also upgraded a G2 reviews. Because due to is software reviews and we do software and we know a lot of our ecosystem are using G2. So that's another place we need to strengthen our positioning because these guys who are likely to buy our product will be, first of all, they have at their own G2 profiles and they know what it is, but they'll also be researching software there.
And we try to from through everything we do really to just know, come through and align it towards the ideal customer profile. And, if you then acquire demand, you do marketing and you put it in front of people who are not your ideal customer profile. Then all the money you [00:23:00] spent various, it's going to look like cost because they're never, ever going to buy your product because they're not the people who are likely to use it or be happy about your product.
[00:23:11] Andrew Michael: Very cool. And then you mentioned as well, if a customer is not a good fit, you put in a closed loss column, what happens to those customers? Do you still allow them to purchase the product or do you only have a there's no self of model it's only sales
[00:23:24] Steffen Hedebrandt: and I know it says we have a free tier that everybody can use and the, we just don't spend our sales people's time on.
Yeah. And if they're a B2C company, we actively tell them to go to one of the B2C companies that we are providers that we recommend. So in that sense, I think we are very. Like if it's clearly a bad fit, we pushed him
[00:23:46] Andrew Michael: to work somewhere, push them away. That's great. Yeah. And then when it comes to sort of customer success on that side, then as well, like how do you have a customer success team?
How is it set up? Patty operates. Yeah.
[00:23:58] Steffen Hedebrandt: So they, they typically get [00:24:00] involved step. Typically when contract is signed, then the customer success team is responsible for onboarding. Now are our paying customers. But they are also sometimes pulled into the sales conversation before signing, just making sure that we're actually able to deal with the tech stack that they have.
We integrate with the most typically used serum systems by SAS companies, which is, Salesforce, HubSpot, Microsoft dynamics, pipe drive. So if they use these platforms, we know the typical FAQ around them. So we can actually, that's another way to keep that alive.
[00:24:35] Andrew Michael: It makes the job of customer success so much easier then as well, like having a really specific customer you're serving, you can go a lot deeper in terms of the level of service you deliver as well.
[00:24:45] Steffen Hedebrandt: Bubba. So the challenge is also like when you get so busy, just onboarding new customers, you I think where we need to get even better is the kind of activation slash self activation. That whole learning the environment about [00:25:00] how you can use the product, because like we have, because we have all data about the customer journey.
There's also. 1000 analysis you can do with that data, if you want to. Yeah. So we need to build up this whole learning environment about if you have this situation, you can do this analysis that's where we need to get better, but I think maybe that's a, and that's probably progress as
[00:25:22] Andrew Michael: you go.
Absolutely. It definitely is something we hear about on the show and the sophistication grows over time.
[00:25:29] Steffen Hedebrandt: Yeah. But I fundamentally believe that modern websites should supply an answer to any questions that any customer can be asking. And I feel like that as well at myself when I'm shopping online now, I don't want to speak to sales at all.
If I can avoid it, just enabled me to find the answer myself and I'll do it. And that's the kind of words we live by with dream that as well, that we want to build up such a good documentation and such a good learning environment that. Then you can [00:26:00] basically supply yourself with
[00:26:03] Andrew Michael: yep. I think that's definitely a good path to take, but I think the other thing is well, is that it's like different people have different preferences and at some point being able to meet all those preferences really is a big plus that you can have against like others focusing on a single channel.
I remember having this discussion as well, like in country. Whereas actually we do a video. Should we do a post? Like they just, some people that are visual learners and prefer to watch than to read. And there's other people that just love reading and don't want to sit and watch a video. So like figuring out the right balance or if you can, and you do have the resources being able to serve customers where they want to be served as ultimately.
[00:26:38] Steffen Hedebrandt: Yeah, I can have a very specific example that just about a year ago, we launched this free tier where you can try the product yourself before buying. And I bought some denim, was all book, a demo call, and we'll take you through the process. And I think nowadays two thirds of our signups are free [00:27:00] and then one third books a demo.
And I think that really, a lot of. Prefer not to talk to sales before this it's a contract situation. And instead of being forced into this demo call and say, this is the buying process you need to take. And it is the same with content. Some people first to listen, some watch others read, you need to make all of them available.
[00:27:22] Andrew Michael: It's tough, but in the moment you don't have the resources to be with, to pick and
[00:27:25] Steffen Hedebrandt: choose.
[00:27:28] Andrew Michael: Cool. I see we running the time. So I want to say for the two questions I ask every guest let's imagine a hypothetical scenario. You join a new company. General attention is not good at all. The CEO comes to you and says, Stefan, you really need to turn things around.
You're in charge. You have 90 days to do it. What you. The catches. You're not going to tell me I'm going to go speak to customers on, I look at the data and see what the problems are out there. You're just going to pick one thing that you've seen be effective in the past. Like one tactic that a company where you previously worked at was really effective.
And you're gonna run with that blindly hoping it works. What would you do? [00:28:00]
[00:28:02] Steffen Hedebrandt: So I think the most extreme customer success situation I've been in was that air team where they did this crowdfunding campaign. And when you do a crowdfunding campaign for a piece of hardware, that is super hard to make, not everybody's going to be happy.
So what we actually did at heritage, most of we one-on-one emailed every single customer and asked. Are you happy about the product? It's not. Can we please help you make it work for you? So we went through a thing up again, up towards like 10,000 people. Emailed one-on-one and made sure that they were set up and they were happy about what we did there then was the, we found out okay.
When you make somebody happy, if all the have generated a little piece of Goodwill and that little piece of Goodwill, you can turn into a review or referral. Post on social media, et cetera. But this thing about asking no, not a standardized NPS click here, what you may recommend friend, [00:29:00] but like sending them like a one-on-one mail and then actually taking the time to give a one-on-one.
I answer afterwards can be a very effective way of, winning friends.
[00:29:10] Andrew Michael: Yeah, not a super scalable one, but definitely very effective. And I think that's the challenge as well. Like when asking this question in 90 days, there's not much you can do. I think that it's scalable and it is almost a trick question to turn rights because anything really effective that's going to solve churn in the longterm, takes time to get that.
Cool. What's one thing that, you know today about gender retention that you wish you knew when you got started with.
[00:29:34] Steffen Hedebrandt: So that sounded like a broken record, but to be very deliberate about your ideal customer profile, who are you selling to, who you're not selling to and let that be the guidance of all your decisions in growth, product, customer success, et cetera.
[00:29:53] Andrew Michael: I love that. And it's a good summary of this episode as well today. Stefan, is there any final thoughts you want to leave the listeners with before [00:30:00] we finish up?
[00:30:02] Steffen Hedebrandt: Oh, I think that's good. People are very welcome to reach out to me on LinkedIn and I'll help reply any questions that they might
[00:30:10] Andrew Michael: have. Very cool.
We'll definitely make sure to leave any notes and links to the resources we chatted about today. And thanks so much again for joining really appreciate it and wish you best of luck now going into the new year. Thank you, Andrew. Thanks. Cheers.
A new episode every week
We’ll send you one episode every Wednesday from a subscription economy pro with insights to help you grow.
My name is Andrew Michael and I started CHURN.FM, as I was tired of hearing stories about some magical silver bullet that solved churn for company X.
In this podcast, you will hear from founders and subscription economy pros working in product, marketing, customer success, support, and operations roles across different stages of company growth, who are taking a systematic approach to increase retention and engagement within their organizations.