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Payrix's Bob Butler on the anchor tenant strategy

ProfitWell Dec 13 2022

In the 1950s, Victor Gruen introduced a new concept to the United States. This was a world where Main Street reigned supreme and the corner store was America’s linchpin. This new fangled concept that Victor introduced was the shopping mall.

A significant portion of what made these shopping malls successful was something called an “anchor tenant.” If you’ve ever been to a Macy’s, JCPenney, Nordstrom, you know what I mean. And these tenants came in other forms like grocery stores, gyms, or movie theaters. The entire point was to use these tenants as a draw so that smaller stores would benefit from their gravity. After all, once you’re finished going to the gym, that corn dog from the food court can be pretty tantalizing.

While shopping malls may soon be a thing of the past, this concept still rings true in B2B SaaS. I’m sure you know by now how important it is to figure out your target personas, but what if you could figure out anchor tenant personas? What’s better than a persona that brings in other personas? Today’s guest is Bob Butler, the Chief Commercial Officer over at Payrix. In our discussion today we get into the benefits of anchor tenants and, more importantly, how to find your anchor tenants. Additionally we get into making waves in the fintech space. All that and more, coming up next.

 

Listen now 🎧

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Key term:

Anchor tenant

The term anchor tenant, also known as anchor store, draw tenant, or key tenant, is derived from the retail space. It’s the most prominent, well-known, and considerably larger store in a shopping mall or other retail location, meant to help draw customers into the mall or area.

This strategy has now been adopted in other types of business, including SaaS. 

 

What to do today: 

  • Follow Bob Butler.
  • Schedule a time to meet with your leadership team to discuss and evaluate your target personas and determine who your anchor tenant is.

What to do next quarter:

Determine who your anchor tenant is and find them. 

Depending on the stage of your company, you may already have a strong comprehension of your target personas. So if you’ve already asked the questions, obtained the data, and have a solid understanding of who your ideal customer is, you can now set out to find your “anchor tenant.” Because as defined above, an “anchor tenant” is who will help draw in the rest of your target or ideal personas.

Bob was generous enough to share their process for finding their anchor tenants — what to look for and how to find them — to help you get started on finding your own.


How to find your anchor tenants

Start by deciding on what your focus is. What is the industry and ideal persona that you're going after? (Payrix, for example, focused on companies in the vertical software industry.)

  • Be specific and filter your search space.
  • Utilize a software marketplace like Capterra and/or G2.
  • Utilize your own everyday personal experiences to think beyond the obvious.
    • For example, Bob had to take his dog to the vet one day, and that sparked the realization that veterinary software (vertical software) must exist.

What to look for in an anchor tenant?

Bob says, “Choosing a company as a key tenant is equivalent to selecting what is relevant to your ideal clients. So it’s less about branding and more about making sure that it's relevant to your other ideal clients.”

  • They can be in a super esoteric and specific vertical, but they should be number one in that vertical.
  • They should be among the best in their G2 space.
    • It's less about brand and more about who they are in their product space — in their market.
  • Understanding the value that your ideal client can provide, while also knowing their public image is critical when selecting a partner.

 

What to do within the next year? 

Once you’ve found your anchor tenant you can begin the process of acquiring them as your customer and anchor tenant. Transparency is important when approaching your ideal anchor tenant. Be open about your vulnerabilities, but also of the significance and benefit of their collaboration with you.

It's also important to remember that change is an unavoidable occurrence. You can lose an anchor company for a variety of reasons, so it's critical that you're prepared with another anchor company as a replacement before this occurs.

 

Who should own this? 

Your leadership team.

 


Who's up next week?

Next week, Jay Levy discusses investor-founder relationships.

Do us a favor?

Part of the way we measure success is by seeing if our content is shareable. If you got value from this episode and write up, we'd appreciate a share on Twitter or LinkedIn.

 

This is a Paddle production—the first media network dedicated entirely to the SaaS and subscription space.

 

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