Artwork for podcast B2B SaaS Podcast
How We Acquired 60+ Enterprise Customers For Our Niche CRM
Episode 4719th October 2023 • B2B SaaS Podcast • Upendra Varma
00:00:00 00:17:59

Share Episode

Shownotes

Tom Burton, Co-founder of LeadSmart Technologies talks about how he's reinventing CRM for the wholesale distribution space, where Excel sheets rule and cutting-edge tech is sparse.

What to expect:

  • 🚀 LeadSmart's Birth Story: How an industry vet and tech guru created a game-changing CRM.
  • 🎯 Cracking a Unique Market: It's more than just software. It's about introducing businesses to the digital age.
  • 📈 Growth Unleashed: Over 60 enterprise customers and counting! Dive into LeadSmart's skyrocketing journey and their almost 100% YoY growth secret sauce.
  • 💡 The Adoption Playbook: It's not just about selling but ensuring businesses thrive with the software.
  • 🎙️ Marketing Wins: From webinars to their own podcast, "Around the Horn in Wholesale Distribution", discover LeadSmart’s unique approach to trust-building.
  • 💰 Bootstrap to Big Time: Their mostly self-funded adventure is turning heads and attracting investors.
  • 🥊 In the CRM Arena: Why the big CRM players might not always be the best for niche markets.

Join us for a deep dive into the world of niche tech solutions, as Tom Burton paints a vivid picture of LeadSmart’s journey, challenges, and their vision for the future.

You can watch this episode on youtube below,

https://youtu.be/hOz7Wgaa_y8

Transcripts

Tom Burton:

So the short story for lead smart technologies is we're A

2

:

CRM, Customer Relationship Management

and Customer Intelligence Platform

3

:

specifically for a vertical market.

4

:

That's called wholesale distribution.

5

:

Upendra Varma: Hello everyone.

6

:

Welcome to the B2B SaaS podcast.

7

:

I'm your host Upendra Varma and

today we have Tom Burton with us.

8

:

Tom here is the co founder and CEO of a

company called LeadSmart Technologies.

9

:

Hey Tom, welcome to the show.

10

:

Tom Burton: Welcome.

11

:

Great to be here.

12

:

Thank you.

13

:

Upendra Varma: All right, Tom,

so let's try to understand what

14

:

lead smart tech does and you know,

how, why customers pay you and

15

:

Tom Burton: Yeah.

16

:

So the short story for lead smart

technologies is we're A CRM,

17

:

Customer Relationship Management

and Customer Intelligence Platform

18

:

specifically for a vertical market.

19

:

That's called wholesale distribution.

20

:

So people that manufacture products,

and then the companies that sell

21

:

those manufacture project products,

there's a bit of an ecosystem there,

22

:

and we're focused entirely on that

video on that vertical and everything

23

:

in our product is aligned towards

supporting those those customers.

24

:

Upendra Varma: God, right.

25

:

So just talk a bit about the history here.

26

:

Right.

27

:

So like, I mean, I know CRM is

such an age old space, right?

28

:

So how did you end up, you know,

picking this particular vertical, right.

29

:

And you know, just talk

about that story there.

30

:

Tom Burton: No, that's a,

that's a great question.

31

:

So my co founder in the company has

spent 35 years in this industry.

32

:

So he was a manufacturer.

33

:

He was a manufacturer's rep, which are

salespeople that work with manufacturers.

34

:

He worked for a distributor.

35

:

So he suffered through a lot of

the challenges that we have been

36

:

addressing with lead smart and.

37

:

You know, the market has been pretty

underserved with technology solutions.

38

:

So they really haven't had

solutions that are geared to that

39

:

market that makes sense for them.

40

:

So a lot of manual, you know,

the, our biggest competitor, as

41

:

we say, is Excel and email, right?

42

:

That's what, what people use there.

43

:

So he really saw an opportunity here.

44

:

I have a longstanding tech background

and built multiple software companies.

45

:

He said, this is a bit of a blue ocean.

46

:

We need to help this market.

47

:

And so that's how we kind of

jumped in and, and have been

48

:

doing this for the last few years.

49

:

Upendra Varma: God, right.

50

:

And just talk about your

customer base today.

51

:

Right.

52

:

So I'm understanding these are all,

you know, wholesale distributors,

53

:

but just give us a sense of how

many total paying businesses do

54

:

you have on your platform today?

55

:

Tom Burton: Oh, we got quite a few

and they range from manufacturers.

56

:

So again, we have kind of three, you know,

entities that exist in this ecosystem.

57

:

You have manufacturers that are

the companies that make industrial

58

:

products, like the headphones you have

on or our microphones or whatever.

59

:

You have manufacturers reps that tend

to work for different manufacturers and

60

:

help to get their products to market.

61

:

And then you have the actual distributor.

62

:

Where in the B2B world, companies don't

go necessarily to Best Buy to buy things.

63

:

They go through a B2B

distributor, whatever.

64

:

So we have actually, uh, customers in

all three of those different areas,

65

:

um, and are growing pretty rapidly

growing, you know, close to a hundred

66

:

percent a year and probably will

be much faster as we go forward.

67

:

We're really seeing that, um, while

the vertical has been underserved with

68

:

technology, they're really understanding

the importance of catching up quickly.

69

:

And, you know, the whole AI thing and

all of that has really caused them to

70

:

have a bit of a wake up call and it's

like, okay, we got to really move faster.

71

:

And so it's great.

72

:

We're happy to support that.

73

:

Upendra Varma: Got it.

74

:

So I'm saying, Tom, how, how many

customers are we talking here?

75

:

Is it 100, 000, 10, 000?

76

:

Just, just

77

:

Tom Burton: No, no, uh, 50, 60 currently.

78

:

Upendra Varma: Got it.

79

:

And, and what are these, like,

are these enterprising deals?

80

:

Are we talking about 10, 000 deals?

81

:

100, 000 deals?

82

:

Like how big are these deals?

83

:

Tom Burton: Yeah.

84

:

So our average contact value right now

reigns around 35, 000 of ARR average,

85

:

but we're, we, we see that increasing.

86

:

Again, as more and more companies get

on board, a lot of these distributors

87

:

are very large, very large sales

teams, hundreds of people, you

88

:

know, so lots of opportunity to

increase that average contract value.

89

:

Upendra Varma: Got it.

90

:

Yeah.

91

:

That makes a lot of sense.

92

:

Right.

93

:

I just want to move on to

your go to market motion.

94

:

Right.

95

:

So like how you, how, like where

you're finding all of these leads.

96

:

I know you've got a vertical and

you understand how your ideal

97

:

customer looks like, but what are

the channels that you're using to

98

:

reach out to this potential leads?

99

:

What's

100

:

Tom Burton: so another good question.

101

:

So, so a couple of things.

102

:

So it's a little bit of a

complex go to market motion.

103

:

It's not like, oh, we went and

hired a bunch of, you know, BDRs and

104

:

we're starting to smile and dial.

105

:

First of all, what we spent quite

a bit of time is developing really

106

:

strong relationships with buying

groups and associations in that

107

:

industry, because this industry

is very relationship oriented.

108

:

And they rely on the advice and

opinion of their buying groups and

109

:

the associations that they're part

of to determine how they should

110

:

navigate in the technological world.

111

:

So, we have a pretty strong

endorsed partnership with affiliated

112

:

distributors, which is probably the

largest buying group in the area

113

:

partnership with net plus alliance.

114

:

We have a partnership of, uh, with ISA,

which is a large association in there.

115

:

So we put, we spent some time to

really build those relationships

116

:

and build that credibility.

117

:

Then our go to market is a bit

traditional in a sense that, you

118

:

know, we're using, you know, basically

reaching out to companies, you know,

119

:

doing traditional marketing demand,

uh, you know, creating demand and so

120

:

forth with them about what's there.

121

:

But then we're now kind of, because

there's this ecosystem, as I just talked

122

:

about it, the manufacturers, the reps

and the distributors, we're seeing a

123

:

lot of referrals starting to happen.

124

:

So a distributor buys our

product and then they go to

125

:

their manufacturer and say, Hey.

126

:

It'd be great if you could

also be on lead smart.

127

:

So we're starting to see a bit of

a flywheel effect occurring because

128

:

of the ecosystem that exists here.

129

:

And that was our part of

our original strategy.

130

:

It's taken longer to kind of see

that momentum get going than we

131

:

would have expected, but we're

starting to see that happen.

132

:

And then it's turbo charged by

those relationships with the, with

133

:

the buying groups and associations.

134

:

Upendra Varma: Got it.

135

:

So, so I'm just trying to

understand this a bit more, right?

136

:

I'm hearing two things here, referrals

from your existing ones, right?

137

:

And obviously your credibility with,

with, with all of these partnerships,

138

:

helping you to close those deals.

139

:

But how exactly are you reaching them?

140

:

Is it cold calling or is it cold emails?

141

:

Like what's, what's really been

142

:

Tom Burton: No, like we'll do a lot of, we

do a lot of joint webinars with, um, with

143

:

the buying groups and the associations.

144

:

We do our own webinar and funny enough,

we also, which may have been our, her

145

:

best, our best Martian is we created

a, our own live show and podcast.

146

:

It's called around the horn

and wholesale distribution.

147

:

And we did, we started that about a

year ago, my co founder and I, and we

148

:

honestly didn't expect much out of it.

149

:

We, we create a newsletter that we send

out every Friday and then we basically.

150

:

Go live and discuss it.

151

:

And it's really taken off and we've

reached a lot of prospects and

152

:

built a lot of credibility that way.

153

:

And, and, you know, again, that's

creating demand and building trust.

154

:

And, um, as a result of that, that's

also been a really good way of reaching

155

:

this, this market that again is built

on relationships and credibility.

156

:

Upendra Varma: Got it.

157

:

Right.

158

:

So now let's, let's

move a bit bottom here.

159

:

Right?

160

:

So what, like talk about

the sales cycle here, right?

161

:

When somebody Things that.

162

:

Okay.

163

:

This looks an interesting product, right?

164

:

How do you convert them

to a paying customer?

165

:

Right.

166

:

What's the sales like look like,

167

:

Tom Burton: yeah.

168

:

So again, it kind of starts

with that discovery call.

169

:

And then we go in, I guess, I don't

like to use the word demo, but it's

170

:

more of sort of a multi step mini

training, if you will, on what are the

171

:

capabilities of, of the technology,

because for a lot of these companies,

172

:

they don't know what's possible.

173

:

So we take them through that.

174

:

Usually that's multiple two or three

sessions that then, you know, leads

175

:

to generally some followup questions

and then a proposal and then obviously

176

:

a close, probably the obvious

question is how long does that take?

177

:

Um, that can take anywhere

from a year to a week.

178

:

I mean, we've had everything

and everything in between.

179

:

So it really depends upon the company.

180

:

You know, do they have an impending

event or something that's really

181

:

driving them to get going?

182

:

So there's a lot of variables.

183

:

So we know that some are

going to take a long time.

184

:

Some are going to happen shorter.

185

:

So the key is just kind

of have a good pipeline.

186

:

Upendra Varma: And then the customers

that we're talking about, right?

187

:

Are these, you know, somebody

who's, are you literally competing

188

:

against Excel sheets, for example,

or are you sort of, you know,

189

:

replacing it with an existing CRM?

190

:

Late?

191

:

So what's, what's that look like?

192

:

Tom Burton: Yeah.

193

:

So, I mean, there are some companies

that have some existing CRM, but I

194

:

would say it's probably less than And

a lot of the times it's like, I mean,

195

:

it's, it could be going back to like

act and goldmine, you know, some of

196

:

these CRMs that from 25 years ago,

um, or they have some old, you know,

197

:

technology that they've built in house.

198

:

But I would say that 75 to 80 percent

of who we're talking to, they run their

199

:

sales organization on spreadsheets.

200

:

Or, you know, white Microsoft

office or whatever the case may be.

201

:

So, yeah, that's the, and the challenge is

not so much that they're, that they like

202

:

that technology is just to change, right.

203

:

It's a change.

204

:

It's different.

205

:

You know, these are not

high tech people per se.

206

:

Um, so we have to focus a lot on the

importance of how do we get adoption?

207

:

How do we get people to use it and feel

like they're getting value out of it?

208

:

When these are not people

that are just looking for the

209

:

latest piece of technology.

210

:

Upendra Varma: Yeah.

211

:

So, so I believe you also have to

solve this problem of educating

212

:

the people themselves, like, Hey,

you need a tool as opposed to

213

:

them already understanding that.

214

:

Okay.

215

:

Here's a tool we need.

216

:

Right.

217

:

So it's like, is it more

about education in your case?

218

:

Okay.

219

:

You showing them, because I

mean, they're going to resist it.

220

:

Right.

221

:

So it's, it's going to

change a lot of things here.

222

:

Switching would have been much easier.

223

:

Tom Burton: Yeah, no.

224

:

And that's where the podcast and the

show has really helped, you know, it's a

225

:

safe way for people to get educated and

the webinars and, you know, not just up.

226

:

Right.

227

:

There's a lot of industry people

right now, the associations, the

228

:

buying groups, a lot of their focus

is helping to educate these companies

229

:

because they got to move, right.

230

:

They're going to be irrelevant if

they don't really start moving.

231

:

So, but yeah, it's, it's a lot

of education and then getting

232

:

them comfortable that this isn't

going to be really disruptive.

233

:

And isn't going to set them

backwards, but move them forward.

234

:

Upendra Varma: It's a talk about, you

know, your retention as such, right?

235

:

I mean, it's been a couple

of years at least, right?

236

:

And I see you've got a

bunch of customers, right?

237

:

Do you see any churn?

238

:

And how are you able to sort of

expand an account that you've landed?

239

:

Just talk about those.

240

:

Tom Burton: So we're

really excited and proud.

241

:

We had no churn last year, so we've had

no churn really in a year and a half.

242

:

Um, and there's two reasons for that.

243

:

One is.

244

:

We very, very, we spend a lot of time

on that onboarding and the client

245

:

success so that we get the adoption and

we start to see return on investment.

246

:

And I'll give you an example.

247

:

We have, you know, 1 customer that

came on earlier this year and has

248

:

seen a 25 percent increase in sales.

249

:

That they believe is mostly attributable

to moving on is the way they say it is.

250

:

It's a sales team, same sales team

as we had before doing a lot of the

251

:

same stuff, but having a lot of more

capabilities than what they did before.

252

:

So, you know, it doesn't take much

for people to kind of go, wow.

253

:

All right.

254

:

How did we live without this?

255

:

And then, you know, we take care of them

and that's the other really nice thing

256

:

about this market is because they're not

ultra techie, they're very loyal, right?

257

:

They're not looking to switch to

the next shiny object or the next.

258

:

You know, cool thing that comes out.

259

:

So once they come in, they're very loyal.

260

:

And if you're loyal back to them, they'll,

you know, we've had, we have customers

261

:

now that have been on four years going

on five years, that kind of stuff.

262

:

So I don't see churn being

a big, big issue for us.

263

:

Um, in fact, I see our net revenue

retention is going to be very high

264

:

compared to the industry because

it's a very loyal, uh, you know, and

265

:

it's not an easy thing that they're

going to want to replace every week.

266

:

Upendra Varma: So do you have

folks in your team, right?

267

:

Customer success team who are

specifically focused on, you know,

268

:

getting the customers, you know,

you derive value and increase the

269

:

NRR, like net revenue retention.

270

:

Tom Burton: Yeah.

271

:

So we have a client, we do pretty much

that happens through client success.

272

:

So once the customer, you know,

comes on board, we have a, we, we

273

:

take them through what we call a

smart start, which is the onboarding.

274

:

But one of the things that's quite

unique with us, it's not like when

275

:

we're done, it's like, okay, we'll

call support or send us an email.

276

:

If you have a problem, we

continue to support them.

277

:

As a consultant, we call

it our concierge program.

278

:

So they can, you know, reach out and

schedule time and say, Hey, we want

279

:

to build some new reports or we want

to do something new and we'll do that.

280

:

We provide that at no extra cost as

them parting, starting to be there.

281

:

So that's our client success.

282

:

And oftentimes that leads to them going,

Hey, we want to add more users or more

283

:

capabilities, or there's another division

or, you know, whatever the case may be,

284

:

and because they're succeeding, right.

285

:

It's like success is

the only way to really.

286

:

You know, drive the NRR game.

287

:

Upendra Varma: Got it.

288

:

All right.

289

:

So Tom, I just want to want you to sort

of recall your zero to one journey, right?

290

:

So how did you get those

first five customers, right?

291

:

So where did you find them?

292

:

How did you knew them, right?

293

:

How did you manage to convert them?

294

:

Just talk about that story.

295

:

Thank you.

296

:

Tom Burton: the first five customers

really came because of my co founders,

297

:

uh, relationships in the industry.

298

:

So he reached out to people that

he knew had worked with before.

299

:

Right.

300

:

So I will call them sort of

like the friends and family.

301

:

Type of customer.

302

:

Um, but what was good about,

again, people are well connected.

303

:

And so we use those as a platform

to kind of springboard to get to

304

:

the next layer and the next layer.

305

:

But yeah, I would say the most of

them came from the friends and family

306

:

relationship that my co founder had Kevin.

307

:

Upendra Varma: Talk

about your team, right?

308

:

So how many folks do you have, do you

have on your team and what do they do?

309

:

Tom Burton: Yeah.

310

:

So, uh, there's probably close

to 20, 25 people on the team.

311

:

Um, depending upon, you know,

some different, we have some

312

:

different contractors we work with.

313

:

Uh, I would say, you know,

client success is probably a

314

:

third of the team that's there.

315

:

We have an engineering team as well.

316

:

Um, we're a bit unique is that

we're built, our product is built

317

:

on the Salesforce cloud platform.

318

:

So rather than building on AWS or some

other cloud platform, we worked out

319

:

an arrangement with Salesforce that

allows us to build on their platform.

320

:

Everybody buys from us.

321

:

They don't buy anything from Salesforce,

but, um, it gives us really a really,

322

:

really top notch, you know, high

performing cloud platform for us to build,

323

:

build on top of, which is, you know,

arguably the most secure and the most high

324

:

performance cloud platform in the world.

325

:

So we have an engineering team.

326

:

Sales, I would say we're probably

broken down pretty much 40% sales

327

:

and marketing, four 40%, uh, client

success, and then 20% engineering.

328

:

And obviously some, you know, g

and a and stuff like that in there.

329

:

Upendra Varma: Got it.

330

:

Uh, that makes a lot of sense, right?

331

:

So, and like, I'm assuming you must have

raised funds to build your company so far.

332

:

It's have you raised any

external funding so far?

333

:

Tom Burton: Well, we've, well, we

ha we, me, myself, and my partner

334

:

have invested a fair amount into it.

335

:

Um, we have inve, we have raised

some small amounts of, uh,

336

:

convertible debt, literally less

than a hundred thousand dollars.

337

:

So small amounts.

338

:

Upendra Varma: it's bootstrap then, right?

339

:

I mean, if you're putting in your

340

:

Tom Burton: Yeah.

341

:

It's bootstrapped.

342

:

It's bootstrapped.

343

:

And we're looking now because we're

getting to that point where, you

344

:

know, in the early stages, right.

345

:

Investors all like, well, talk to me

when you get to a million ARR, talk to

346

:

me, you know, and we're like, you know,

we can fight this or we can just kind of

347

:

literally bootstrap our way to that point

and then get a place where we're at a

348

:

foundation where we can get quality, high

quality investors kind of picking shoes.

349

:

We're getting to that point right now.

350

:

Um, we've also used

revenue based financing.

351

:

So we've worked with, you know,

companies that, uh, lighter capital that

352

:

help you basically, you know, offset

your revenue because we have good,

353

:

strong, recurring revenue with that.

354

:

It's, it doesn't necessarily, um,

you know, cause you to take, to

355

:

take it big time growth, but it

helps, you know, add more cashflow,

356

:

the equation and give you more

357

:

Upendra Varma: So, so Tom, why race?

358

:

No.

359

:

I mean, if you've already, you

know, bootstrap managed to bootstrap

360

:

and build, you know, build such

a good company so far, right?

361

:

So why not just keep

on doing that forever?

362

:

What's the vision here?

363

:

Tom Burton: Yeah, there's

a, there's a huge market.

364

:

So in the U S alone, there's over 300, 000

distributors and 200, 000 manufacturers.

365

:

I mean, and the majority of

these companies do not have any

366

:

sort of technology that we do.

367

:

So there's a gigantic market

and we're literally just

368

:

scratching the surface of that.

369

:

And so, you know, our vision is my

co founder Kevin says his vision is.

370

:

Right.

371

:

There is no serious talk of CRM

and customer intelligence and these

372

:

companies without lead smart coming

to the, and I think that's a really,

373

:

really good vision and goal that we

should be shooting for because we are.

374

:

I believe we are the leader right

now in this industry of having

375

:

that industry specific solution.

376

:

And that can really help them drive sales.

377

:

So, yeah, we're going to have to,

if we're going to really get to that

378

:

next level, we're going to need more

capital than what we're, we're doing on

379

:

Upendra Varma: And then how does

the competitive landscape look

380

:

like in this particular niche?

381

:

Tom Burton: Yeah.

382

:

So, I mean, there's, you know, what we

call the more traditional CRM vendors,

383

:

there's the Salesforce and Microsoft

dynamics and those types of things,

384

:

but we rarely see them, actually.

385

:

We rarely see them there.

386

:

There's a couple of other

vertical solutions that have

387

:

been around for a while.

388

:

So they're a bit older

technology, if you will.

389

:

We see some of those, but, um, no,

it's not, it's not a hyper competitive

390

:

red ocean that you see potentially in

other CRMs, you know, where you're,

391

:

where you have, you know, pipe drive

and HubSpot and Salesforce and monday.

392

:

com and all of these people vying

for that business, because the needs

393

:

for this business or this vertical

are very specific and those sort of.

394

:

One size fits all CRMs don't

really work well for them.

395

:

So.

396

:

Upendra Varma: Makes sense.

397

:

Tom Burton: I do expect more

competition coming in here, right?

398

:

Anytime there's an opportunity,

there's going to be more competition.

399

:

Upendra Varma: They're

going to follow you.

400

:

Definitely.

401

:

Tom Burton: That's right.

402

:

Upendra Varma: All right, Tom.

403

:

Thanks for taking the time to talk to me.

404

:

Hope you scale your company

to much, much greater heights.

405

:

Tom Burton: No, great questions.

406

:

Thank you.

Links

Chapters

Video

More from YouTube