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Customer Development

Customer Development, SaaS, Startups

Should you use growth tactics that don’t scale? by @NikkiElizDeMere

growth-tactics-that-dont-scale

Last week, my friend received a charming hand-written note from a monthly wine club she recently joined. It was addressed by hand, the welcome note was written by her personal “wine concierge,” and it contained four $30 Off coupons to give to friends.

But what impressed me (and my friend, since she’s a copywriter) is the words in that handwritten note.

“We are a new company and growing fast.”

“Please help us continue to grow by sharing these referral cards with friends – you’ll earn free vino if they join.”

With that simple call-to-action asking the recipient to share the referral cards with friends (for free wine – who doesn’t love that?), Bright Cellars delivered a customer development tactic that may not scale, but will definitely help them grow.

Read More on SEMrush


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Development, Customer Success, SaaS

Two Mistakes I See SaaS Founders Make All The Time by @NikkiElizDeMere

mistakes-saas-founders-make

Software as a Service, and any subscription-based business model for that matter, relies on customers who stick with them. Attracting the “sticky” kind of customer is a science, some might even say an art. And the stakes for perfecting the acquisition of long-term, high-yield customers are high – they’ll make or break your business.

So why do I see SaaS founders making the same two mistakes over and over again?

Hook, line and sinker

You know who doesn’t make these two mistakes? A fisherman. A fisherman goes out knowing exactly the type of fish he wants to catch. He comes prepared with the correct type of fishing reel to catch his fish. He chooses from among hundreds of types of fishing lures and bait, finding the exact combination most likely to appeal to his fish. According to Field and Stream, you can find a lure that catches fish, “specified right down to size and color.” Then, he finds the part of the stream, river, brook, or ocean where his prey is most likely to be, according to the time of year and weather conditions.

This leads me to the first mistake far too many SaaS founders make:

1. You don’t identify your ideal customer

Oh, there are variations. There are a number of SaaS founders who think they’ve identified their target customer, but haven’t done enough homework to flesh out the details. It’s like saying you’re going after trout, but do you want rainbow trout? Brook trout? Brown trout? Cutthroat trout? Did you know Ireland has more types of trout than anywhere else in the world?

And each type of trout has its own lifecycle, feeding habits, and habitat.

You can’t just say you want trout and expect to catch one. You need to know the details.

You can’t just say your target audience is women, between the ages of 25 to 35. You need to know what their problems are, what frustrates them, what they love, and what outcome they would most like to the problem you’re uniquely prepared to solve.

Lincoln Murphy has a theory about why so many founders fail to ID their target – he thinks that people forget that they can choose their customers. I would add that many business owners have a “beggars can’t be choosers” mentality and fear excluding potential buyers by targeting one group too specifically.

However, unless you’re attempting to become the next Amazon or Apple, chances are your product won’t appeal to everyone equally. This isn’t a liability, it’s an opportunity. Business that are able to become leaders in their niches do very, very well.

Meet your ideal customer

There are many methods and theories for how to create customer profiles and buyer personas. Many require you to go into incredible depth of detail, fleshing out your target’s family role, religion, hair color, ethnic background, geographic location, house or apartment, favorite celebrity trend-setter, shoe size.

I appreciate what a well-developed buyer persona can offer businesses. Advertising Andy in his size 10 Birkenstocks can be a useful rallying point for the different teams responsible for attracting, acquiring, retaining and delighting his segment.

But I recommend starting by finding out the information that is most pertinent to what you have to offer and what business problem you’re trying to solve (Retention? Lifetime value? Creating brand advocates?).

Picture the best customer you’ve ever had:

      1. What was that customer’s industry?
      2. What problem did that customer need to solve?
      3. What was at stake for that customer if they didn’t solve their problem?
      4. What did that customer appreciate about your solution?
      5. How long did that customer stay with you (and if they left, why?).
      6. What other solutions did that customer try before coming to you? How did they find you?
      7. What was the thing that tipped them over the edge into conversion?
      8. Do they ask your customer service team a lot of questions – or rarely make contact?
      9. Have they referred more business your way, or agreed to upsells and cross-sells?
      10. How exactly have they experienced success/value from your product?

The answers to these 10 questions are a recipe for who your customers are, where you can find them, and what is likely to appeal to them most. You won’t get this information by guessing, which leads me to the second most common mistake SaaS founders make.

2. You don’t talk to your ideal customer

There is a right way and a wrong way to talk to your customers, but many SaaS founders don’t talk at all. That’s definitely the wrong way! Here’s another wrong way:

If I asked my customers what they wanted, they would have said faster horses. – Henry Ford

While you can’t rely on your customers to come up with their own solutions, it is important to ask them questions and listen to what they are, and aren’t saying.

Focus on understanding their problems, the severity of their problems, and the contexts of those problems.

What is their workflow?

Ask questions about their desires and find out what drives them. Their goals probably have nothing to do with your product, but your product could be exactly what they need to reach their goals of saving time (to spend more time with their families), working more efficiently (to experience less frustrating and impress their bosses), or whatever it is.

Ask them where they look to find answers – do they Google problems? Do they ask their co-workers?

Ask your best customers if you can speak with them for 20 minutes to find out how you can better meet their needs – most will be more than happy to comply. Be sure to take word-for-word notes, since your copywriters may want to use the exact language of your customers in their conversion copy.

So much valuable information can only be gleaned through customer interviews. Yet most founders are reluctant to “bother” people. But here’s the thing: When the purpose of your questions is to create a better solution, improve the user experience, and essentially make your customer’s lives easier – they’ll be glad you asked (and impressed by your commitment to customer service).

The information you gain from your customers can be used to refine your marketing and sales tactics, strengthen your customer success efforts and drastically improve retention. The trick is to ask the right questions of the right people.


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Development, Customer Success

Close the Loop, Boost Your Business: Customer Development to Customer Success and Back Again by @NikkiElizDeMere

close-the-loop

Customer Development and Customer Success are like a stream that feeds into a river that creates an ocean. It’s all water going on one direction, and when they’re connected, they ensure a healthy, fast-growing, sustainable business. While the two terms aren’t interchangeable, they work best when intertwined. Before we get into how they flow together, let’s define both terms separately.

  • Customer Development means talking to people to find the motivations behind their actions. Gathering qualitative data from real people through interviews and surveys reveals the “Why?” behind the “What,” which you can use to validate your product and value propositions and inform every customer-facing decision. That’s my working definition, though you could also say that it’s a framework developed by Steve Blank for discovering and validating the right market for your idea and testing the best way to acquire and convert customers.
  • Customer Success, on the other hand, is more about determining when and why a customer might churn, and reaching out to them in ways that get them to stay. It’s about defining churn indicators, putting a system in place to prevent churn, and most importantly, designing those systems to support customers in achieving their desired outcomes in a way that scales.

TODAY on Will it Blend? Customer Development and Customer Success

At their cores, Dev and Success are both about achieving a thorough and meaningful understanding of your customer. And, both are dependent on qualitative research. Qualitative research is conducted through observation and inquiry instead of number-crunching. Using qualitative research, you can find answers to:

  • Who is my audience?
  • Why are they here?
  • What are they trying to accomplish?
  • When are they thinking of leaving?

So yes, not only do they blend, but you should combine them so your Customer Development data feeds into and informs your Customer Success data, and vice-versa. Here’s what that looks like:

The Intersection Between Customer Development and Customer Success

Step 1. Create well-rounded, accurate buyer personas by asking, not by guessing.

There are a lot of ways to go about building a buyer persona – some stress quantitative data, others sing the praises of qualitative data. I like both. Use quantitative data to build the demographic framework of your buyer persona (products like Cubeyou make this really easy). You can find the age, gender, income, geographic location, relationship status, interests and brand preferences, by using tools that leverage social media data.

That data is helpful, but it won’t answer questions like:

  • What motivates customers to find you?
  • What is your buyer’s desired outcome, or end goal, they hope your product/service will help them achieve?
  • What do they expect to be different once they switch to your service?
  • What is important to the buyer about how your company/product/service looks?
  • What has your buyer disliked about providers he’s used in the past?
  • How does your buyer currently solve his or her problem?

This is the gap only qualitative data can fill.

You’ll want to conduct a few persona interviews of recent customers, repeat buyers and long-time customers to find the answers to these questions, and you should also implement exit surveys just a people are leaving a conversion page to discover what stopped them from purchasing.

All of this falls under Customer Development, but are also key actions towards finding problem/solution fit, product/market fit, and finding out what success means to your prospects.

Step 2. Focus on what they want to achieve.

Once you have your well-rounded buyer persona sketched out, you’ll want to focus on what goals they want to achieve using your product. Nobody buys a hammer because they want a hammer. They buy a hammer because they want a hole in the wall.

In order to create value propositions, benefits, Calls-to-Action, and content that grabs your audience by leveraging what they desire, you have to find out what they want most. And, the only way to do that is by gathering qualitative data from interviews and surveys (not interviews OR surveys – if you only use surveys, your data may be distorted for any number of reasons, including biased question phrasing and self-selecting groups of respondents).

Remember: Success exists outside of your platform, not inside of it. Bring the outside success together with your products/services offered, and you’ve got the makings of a great customer success strategy that reduces churn and maximizes the potential for upsells and cross-sells.

Step 3. Incorporate this information into everything you do and make.

Buyer persona information from qualitative and quantitative data should inform everything the buyer sees or buys – products, content, messaging, CTAs, images, the tone of your copy, the offers and freebies you create, your methods of reaching out, where you place your online ads, and when you make contact for sales, customer success check-ins, and upsells. How you do this depends on what your data tells you, and will also depend on sequences of testing and iterating based on results.

Step 4. Make data-driven UX decisions.

The need for qualitative data doesn’t end when you’ve constructed a buyer persona. You can and should use surveys and interviews to improve the UX of your site, implement meaningful updates and create new features.

To double-check your UX and find out how people really experience and engage with your site, you’ll want to perform usability tests early-on and often. Tools like UserTesting.com and TryMyUI let you take actual videos of people navigating your website.

You can also use a live chat program like Wordle that lets you keep transcripts, so you can see what visitors ask about most, and whether something is unclear, vague, or missing from your site.

When Customer Development and Success Align

Customer Development is all about optimizing acquisition and conversion. Customer Success then picks up the relay baton and runs with it, retaining customers, reducing churn, and leading to up-sell and cross-sell opportunities you can only tap into when you know what your customers’ goals are and whether or not they’re achieving them.

The fastest-growing new companies are those that master acquisition and retention both, which means that to grow – you need to close the Development-Success loop.


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Conversion Rate Optimization, Customer Development, Customer Success

Customer Development: 4 Steps for Decreasing Churn by @NikkiElizDeMere

4StepsForDecreasingChurn

If you had to sum up conversion, customer success and retention into one phrase, that phrase might be “customer development.” Customer development doesn’t have a succinct and pithy definition – it’s just too complex of a concept to smush into a neat sentence. The best definition I’ve come across is from Patrick Vlaskovitz in The Entrepreneur’s Guide to Customer Development:

“Customer Development is a four-step framework to discover and validate that you have identified the market for your product, built the right product features that solve customers’ needs, tested the correct methods for acquiring and converting customers, and deployed the right resources to scale the business.”

Clear as mud, easy as an appendectomy.

Which is to say, it’s not easy at all. So let’s break it down in terms that lend themselves more to concision: Conversion, customer success and retention.

It’s like the circle of life. They’re all connected and flow into each other. To eliminate churn and increase customer success, you should constantly optimize your conversion process (hello retention!).

Read More on Conversioner


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Development

It’s not just about solving a problem – it’s the severity of the problem. by @NikkiElizDeMere

Its-not-just-about-solving-a-problem--its-the-severity-of-the-problem

Image created by Yasmine Sedky (@yazsedky).

Finding “problem/solution fit” is one of the first tasks any aspiring entrepreneur must face. When you’re finding that problem to solve, it’s important to not just jump on the first problem that comes to mind – take the time to uncover a problem that has real pain and high stakes attached to it.

High stakes, low stakes, and in between

Whether your customer is B2B or B2C, she has a job she wants or needs to do. Not all jobs have the same level of importance, of course. As a devoted Modcloth customer, my “job” to look fabulous in fox-faced slippers isn’t really that high on my list of priorities. Not compared with, say, my job to help my clients grow their businesses through customer development. That job has high stakes attached. If I fail at that job, my customers go away (and then I can’t afford those very cute slippers). Therefore, if your company provides a solution to a problem attached to that very important job, I’ll be willing to pay more for it and engage more with your company when you help me succeed.

Then there are the other kinds of jobs that may not seem vital, and certainly won’t make or break anyone’s livelihood, but are crucial because they occur frequently. Take billing for example – the bane of every small business is the time it takes each month to create and send invoices. The billing cycle is a frequent time-suck that hinders productivity, unless you have a tool to ease the burden.

Your business’s pain rating scale

pain

This is the scale they show you in the hospital so nurses know how much pain killer to give you. But, you could also use it with your prospective target audience.

Pain points come in nearly as many flavors as Baskin-Robbins ice cream. There are functional pain points – when a solution doesn’t work well or comes with side effects. Social pain points – when those slippers you ordered online make you look silly at the grocery store. Emotional pain points – when taking an action makes you feel bad. Obstacles to getting jobs done also qualify as pain points, as do potential risks of undesirable outcomes.

You’ll want to clearly differentiate your prospect’s pains, jobs, and desired outcomes in order to:

  • Develop a successful product
  • Ensure customer success
  • Create effective marketing
  • Grow your business, etc.

To find out which pain points affect your target audience, start by asking yourself a few questions – and if you don’t know the answer, ask your audience (Qualaroo surveys are great for this).

  1. What makes your customers feel bad? What frustrates or annoys them? What causes their headaches?
  2. What are their main difficulties and challenges that they encounter?
  3. What negative social consequences do your customers fear?
  4. What keeps them awake at night?

Then, see if you can quantify the severity of those pain points.

For example, if I were doing this for Capitan, a grocery list app, I would list their customers’ pain points as:

  • Losing their shopping lists – mild pain
  • Having a purse cluttered with old shopping lists – mild pain
  • Having to text grocery list to significant other who still can’t figure out what kind of milk to buy – moderate pain
  • Forgetting the toilet paper for the 3rd time – MAJOR PAIN

Nobody wants to go without toilet paper, especially when you also forget to buy Kleenex and therefore have nothing with which to… well, you know. That is a major potential pain point that having a shopping list on your phone, which you always have with you, alleviates.

From there, you can go on to create highly effective (and pretty darn funny) marketing messages.

Identifying the most severe pain points is also one of the keys to developing a great value proposition.

And, of course, pain points are just the insights you need to develop solutions people will pay for.


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.

Customer Development, Customer Success, SaaS

Leverage NPS Surveys to Boost Brand Advocacy ft. @Wootric

leverage-nps

Image created by Yasmine Sedky (@yazsedky).

“Net Promoter Score,” also known as NPS, is the metric of choice for measuring customer loyalty. The magic lies in the answer to one simple question you’ll find on almost every company survey: “How likely are you to recommend us to a friend or colleague?”

NPS is based on the idea that customers come in one of three flavors: Promoters, Passives, and Detractors. Promoters are loyal consumer advocates, ready and willing to sing your praises. Passives are those who are content, but not enthusiastic, and are easily wooed by the competition. Detractors are people who have found reason to dislike your company and/or your product. By attaching a score to each of these segments, you can see where customers fall on that continuum on a scale of 0 to 10, and track the efficacy of your customer outreach efforts.

Where does Customer Success fit in to this equation? How about everywhere.

Read more on Wootric


Let’s Get SaaSsy – I’m offering a limited number of SaaS consulting engagements.