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Customer Development, SaaS

Who Owns SaaS Customer Development? ft. @sgblank & @CindyAlvarez

who-owns-saas-customer-dev

Image created by Yasmine Sedky (@yazsedky).

“I have seen startups fail because founders were either too prideful or just plain shy (find a +1 to help!) to connect in meaningful ways with customers – potential or actual.”

– Amazon Customer review of Lean Customer Development by Cindy Alvarez

Don’t you love Amazon user reviews? They tell the unvarnished truth (unless, of course, the reviewer you’re reading happens to be the author’s BFF). This one, in particular, nails one truth that every founder interested in Lean methodology and customer development must face: You’ve got to be willing to put yourself out there.

Not in a metaphorical sense. I mean this quite literally.

Yourself. Out. There.

You, the founder, are the key ingredient. Your vision is more important than any other part of your nascent company, which is why you – not an intern, not your product developer, not your assistant, not your head of marketing – have to be the one listening to your customers.

I know. I know. You are so busy. You’re trying to run a company, after all! And I’m here saying you have to be the one on the phone, on the street, or in the Skype session, gathering qualitative data.

What am I, nuts?

Well, if I am, I’m no crazier than Steve Blank and Bob Dorf, co-authors of The Startup Owner’s Manual. According to them, this is precisely how new companies, and established companies creating new products, are growing intelligently and sustainably, while avoiding the pitfalls that have spelled disaster for the thousands of companies that fail each year.

If the definition of customer development is asking your customers for input that helps you develop the solution they’ve been hoping for – who better than the founder to lead the charge? By learning from your customers, on the ground, what they need most, your vision can and will change – for the better.

Why should I conduct customer development interviews when I know what my customer wants already?

In The Startup Owner’s Manual, the authors make a list of “9 Deadly Sins” that qualitative data is uniquely able to absolve, including…

  • Assuming “I know What the Customer Wants”
  • The “I Know What Features to Build” Flaw
  • Emphasis on Execution Instead of Hypotheses, Testing, Learning, and Iteration

Blank and Dorf recommend founders create a set of business model hypotheses for how they envision their businesses working, and physically go out and ask people in their target market for insights:

Of all the lessons of Customer Development, the importance of getting out of the building and into conversations with your customers is the most critical. Only by moving away from the comforts of your conference room to truly engage with and listen to your customers can you learn in depth about their problems, product features they believe will solve those problems, and the process in their company for recommending, approving and purchasing products.

The road to bankruptcy is littered with founders who thought they knew what people wanted, but never bothered to test their hypotheses. It’s a completely unnecessary risk, especially when avoiding these pitfalls is as simple as finding the answers to three questions:

  1. Do you really understand the customer’s problem, in its entirety, within their everyday context?
  2. Is the problem severe enough that people are highly motivated to solve it?
  3. Will they care enough about the problem to tell their friends?

To find the answers to this list, you’ll need to do a few things:

First, identify your ideal customer – the customer who has a severe pain they’d do anything to solve, and who is willing to pay you real money to solve it. Bonus points if this customer has been so desperate that they’ve hacked together a stop-gap solution on their own already.

Then, ask your ideal customers open-ended questions that lead you to these insights:

When you collect and use qualitative data correctly to inform their product designs and marketing strategies, you’ll have the information you need to produce a product that people need and want, finding problem/solution fit (and product/market fit too).


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

Customer Development, Customer Success, SaaS

5 Steps To Rock Your Value Prop for SaaS Customer Success ft. @MorganB

5-steps-to-rock-your-value

Image created by Yasmine Sedky (@yazsedky).

Special thanks to Morgan Brown for contributing insights. ❤️

Use qualitative data to uncover language-market fit

When the right words appear in front of the right people, it’s like the copy from your page joins a conversation already happening in the minds of your prospects. It becomes a dialogue of “I wish I had this” and “Do you wish you had this? Let me show you how you can get it.” The conversation continues from there, sometimes with other people, like user reviewers, chiming in just at the right moment. Sometimes with your marketer sending an email that is so perfectly timed your prospects wonder if you’re reading their minds.

In this conversation, your job is to convey a simple message of the value you have to offer. But, crafting that message is anything but simple. It all starts with…

Customer Success

Customer Success is a complete customer-lifecycle process that helps customers achieve success – whatever success means for them in the real world – with your SaaS so that you can decrease churn, increase revenue, and create an exponentially increasing mountain of new sales. 

I’m not over-promising. When you nail Customer Success, those are the results.

This process begins with qualitative data research: Real feedback from real users. This research can help you form a unique value proposition to attract your ideal customers from the very beginning so that you (and they) can start achieving Customer Success, and all of the results that come with it.

Qualitative Data Research

At best, analytics can tell you what is happening, but they can never tell you exactly why. They can tell you a channel is underperforming or a page has a high bounce rate but those are symptoms, and you can either guess at the root causes or you can conduct qualitative research to get meaningful answers. When you’re investing time and money into growing a business, guessing becomes expensive. Running A/B tests or trying new things based on your own intuition or your team’s brainstorming without getting outside of the building is an easy way to waste time and money. 

In fact, this is how many startups fail – or make fools of themselves. Remember the fiasco when iTunes gave everyone the latest U2 album?

When you try to guess what to improve upon or how to fix what’s wrong, it’s not just that you might waste time getting to what ultimately works, it’s that you might not ever make the change that really matters. As people, we’re great at coming up with options and ideas based on the combination of things we “see” or understand, but we’re not good at identifying the factors that may be completely off our radar. 

As Donald Rumsfeld famously said, we’re not good at dealing with the “unknown unknowns.” Unfortunately, it can often be those unknown unknowns that are holding back Customer Success. And we’d never get to the answers ourselves. Unlike Sherlock Holmes, we usually can’t identify the dog that’s not barking. So research isn’t just about speeding up the process of finding wins—it’s essential to finding them in the first place.

Qualitative research breaks down into a few key buckets: surveying, interviewing and observing, and inbound analysis. 

Let’s Get Started

Here’s five steps you can use to gather, analyze and utilize qualitative research to continually improve your language —and ultimately rock your value prop:

5 Steps

  1. Identify your ideal customer
  2. Gather qualitative data from existing and potential customers
  3. Form a unique value proposition to begin establishing language-market fit
  4. Update and test your language
  5. Monitor

1. Identify your ideal customer

Most SaaS companies don’t want to narrow their focus to an ideal customer, but this is critical. After all, how do you know what kind of language to use if you don’t have a clear picture of who you’re talking to? 

Think you can write a sales page that appeals to everyone? Think again. Copywriters know that effective copy, the copy that converts into action, must be highly targeted on just one persona (or, at most, two – but they don’t recommend it!).

You can start identifying your ideal customer by using Lincoln Murphy’s Ideal Customer Profile Framework.

We’ll wait here while you do that.

2. Gather qualitative data from current and potential customers.

Once you’ve identified your ideal customer, you need to determine how the market perceives their problems and your product through the language that you’re currently using on your website and marketing materials. 

After all, language is the foundation of growth.

Here are four methods you can use to accomplish this:

  1. Surveys
  2. Interviews
  3. Observation
  4. Inbound Customer Feedback

Surveys

 This is pretty straightforward. Implement regular surveying of both website visitors and customer segments via onsite and email-based surveys. These include product/market fit, customer satisfaction, net promoter scores, demographic/psychographic profiles, product features and more. 

Why you should talk with “qualified noes”

Onsite surveying is great, but you can also end up getting feedback from people who aren’t your customers – ie. unqualified leads. This is not the feedback you want. Instead, focus on surveying the “qualified noes” (the people who are qualified but decided against buying anyway.) These are the people that can unlock real insights to improve your customer acquisition efforts.

There are two parts to talking to qualified noes: part one is asking your questions within the context of the right parts of the user experience to talk to qualified visitors; part two is asking the right questions. 

The right questions at the right time

You want to ask people who just bought what convinced them to buy, and people who abandoned at the last minute why they changed their mind. All of this is detailed well in this article about “golden questions” with Conversion Rate Experts and Sean Ellis.

Custom surveys via email are another important part of qualitative feedback. Ideally you have a regular survey that goes out to your user base on an interval—say every quarter—that asks the same set of questions about overall satisfaction, demographic data and more. This helps you understand if your product is improving or not, and how your user base is evolving. 

Pre-launch Surveys

In addition to regular surveys, you should survey your customers occasionally about new features or initiatives you’re thinking of launching. These can be stand alone, one-off surveys sent from time to time.

Targeting these to the right people is essential to get meaningful feedback.

For instance you don’t want to send new product feature surveys to users who haven’t logged in recently – if they don’t care about your old features, they aren’t likely to invest interest in the new ones. 

You can get a lot more detail about how to survey users in Qualaroo’s Marketer’s Guide to Surveying Users.

Surveys are great for aggregate qualitative data, but they often only collect data around the issues you think are important—after all your team is writing the questions. So they are not always the best at getting to unknown unknowns. Free-form fields can help here, but they’re not as good as interviews and observing users. 

Interviews

Interviews, such as those done in usability studies, ethnographic research and customer development provide a much richer profile of users. They also help uncover unknown opportunities and issues. The key to interviews is to ensure you’re not leading the interviewee, and are able to elicit the insights and information you’re looking for. Interviewing is a skill, and whether it’s for usability research or customer development, knowing the right questions to ask and being able to put subjects at ease are critical to making the sessions valuable. 

Ash Mayura does a great job of outlining the specifics to customer development issues in Running Lean and includes a specific format and question recommendations to help you get the most out of the interviews. Of course it’s critical that you’re interviewing the right types of people—people who are like the customers you are trying to attract or retain.

Observation

Beyond interviews, observation can be really valuable as well. Especially when it comes to usability it studies and ethnographic research, simply watching people interact with your product or service is highly instructive. You can do this remotely, with tools like UserTesting.com and Inspectlet, or you can do it in-person with some of the user testing studies outlined in Don’t Make Me Think by Steve Krug. 

Ethnographic research has you observing users in their actual environment with your product. Watching someone work all day and then pick up their phone to use your app, or login to your service while trying to manage their leads, etc. is an incredibly illuminating experience that not only provides great context to understand how your users think about and use your product in relation to the rest of their lives, but it also creates a great deal of user empathy which is essential in creating new features, campaigns, etc. 

Inbound Customer Feedback

Combining these individual deep dives with other qualitative feedback can help provide context to results and analytics data. All of this is proactive research led by the organization, but you also have a great deal of qualitative inbound data that you can take advantage of.

Complaints, support tickets, phone calls, posts on social media, reviews and chat logs are all founts of qualitative data that can be mined for insights. They can be structured, through tools like UserVoice, or they can be mined from unstructured data like support logs or Twitter mentions. 

While most inbound customer feedback is simply used to manage complaints and triage issues, the growth team can use this feedback to find new opportunities for features and campaigns that can lead to growth. One of my favorite examples of this is from Bryan Eisenberg, who likes to show how different the language is in e-commerce product descriptions and the consumer reviews of the same product. By mining these reviews, e-commerce companies can find inspiration for everything from ad and landing page copy to new marketing channels to pursue.

User research is an important and rich area of opportunity for businesses. Most of the opportunity is squandered by a lack of action. As usability expert Jakob Nielsen said, even talking to just five users can lead to big insights and wins. By combining surveys, interviews, observations, and analysis of inbound customer feedback, growth teams can find brand new opportunities that can lead to big wins for their business.

3. Form a unique value proposition to begin establishing language-market fit.

As pointed out by Peep Laja on ConversionXL, your value proposition is the number-one thing you need to get right — and to test. It is a promise of the value to be delivered to the customer. It should be in the language of the customer and should join the conversation that’s already taking place.

To do this, you first have to understand what your customer needs (and what they’d like to gain), what their jobs are, and what their biggest pain points are. Don’t try to guess – use qualitative data gained from interviews and surveys of your ideal customers.

Then, look at what your product does, what benefits/gains it offers, and what pain points it relieves.

Where the two lists intersect is where you have problem/solution fit. And each “fit” becomes an ingredient of your value proposition.

Use this value proposition worksheet or Strategyzer’s value proposition canvas to get started.

value-prop-canvas

Of course, when filling out the value proposition canvas, you’ll have to condense your users’ answers in order to make a list to compare and contrast with what your product offers. But don’t throw away the complete responses from your interviewees. This chart will help you find problem/solution fit (aka. product/market fit) and let you know exactly which benefits to highlight for your audience, but it won’t tell you which words to use that fit your audience.

Your audience already has.

Within the responses your interviewees give you are perfect little sound bites, snippets of sentences, or possible full paragraphs, that precisely express – in the raw language of your users – what your customers need, want and fear. Use these sound bites as they are (correcting only grammar and punctuation if necessary) in your copy.

When your copy – even your value proposition – captures the diction, tone, and feel of your target audience, they’ll recognize it as quickly as you recognize your own signature on a check. And it will speak to them.

4. Update and test your language.

Now that you’ve collected your qualitative data and put it to use in a working value proposition, it’s time to update the language on your landing pages. 

You’ll need to continue to test your value proposition, so form a hypothesis for an A/B test and start testing to determine which variation has a greater positive impact on Customer Success metrics.

A/B testing may be simple, but it’s powerful. Much like the observation technique of gathering qualitative data, a good A/B test measures the real-world behavior of your customers.

Which metrics to look at depends on your goal. Is it lowering Cost to Acquire a new customer (CAC)? Is it monthly recurring revenue, or annual recurring revenue? Is it retaining customers after a typical “drop-off” point in your onboarding process?

Once you’ve chosen a metric and have a hypothesis – which can be as simple as “I think the new language will increase conversions on this page by 25%” – set up an A/B test to find out if you’re meeting your goal. If not, make one change and try again.

You may find that the issue isn’t your language but its presentation, so if you are confident in your value proposition and your on-page copy, you might try having your web design team change the placement of the text, the font, the color, etc. Don’t make lots of changes all at once, unless the page is brand new or severely underperforming. You need a benchmark to compare the new with the old.

5. Monitor 

The problem with A/B testing is that it doesn’t tell you why you’re getting the results you are, which is where qualitative data comes into play yet again. Once you’ve noticed that version B actually performs worse than version A, you can use on-page open-ended survey questions, or interviews, or any of the other qualitative data gathering methods to ask your customers “Hey, what about this page isn’t working for you?”

Then, iterate based on their responses and repeat the A/B testing cycle until you’ve optimized your value prop, or page, or onboarding process for customer success.

Conclusion

Qualitative data is at the heart of Customer Success initiatives – after all, how can you help customers achieve their successes unless you’ve first asked them what they are. With the foundation of insights ‘straight from the horse’s mouth’ you can build an empire.

  1. Identify your ideal customer by using Lincoln Murphy’s Ideal Customer Profile Framework.
  2. Gather qualitative data through the use of surveys, interviews, observation, and inbound customer feedback to validate your language.
  3. Use this value proposition worksheet to form your value proposition.
  4. Update and test the language on your site. 
  5. Monitor.

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

Content Marketing, Customer Success, SaaS

Inbound Marketing Alone Isn’t Sufficient for SaaS Customer Success by @NikkiElizDeMere

inbound-marketing

If you ask an inbound marketer, inbound marketing is not only the best thing since sliced bread – it’s the saving grace of marketing in general. Now, I will admit to having some bias towards Inbound. I think it works a helluva lot better for today’s customers who are becoming increasingly resistant to the “hard sell” tactics of outbound marketing.

But, it’s not the be-all and end-all, everything-you-need, one-stop-shop for SaaS success.

Not even if you do it really, really well.

Inbound’s strengths are in supporting the Awareness, Consideration, and Decision-making stages of the buyer’s journey. At its best, it reaches out to ideal customers, reels them in with genuinely helpful content, warms them up, and gently nudges them towards clicking the “Buy” button.

“What else is there?” you might well ask.

All of the stages inbound marketing typically addresses are about acquisition, which is great. You need to acquire customers or you won’t have a business.

But you also need to retain customers – or you won’t grow your business.

Ah, yes. Retention.

Inbound Marketing doesn’t do much, if anything, for retention – but your content strategy, together with your onboarding process, should.

Because your goal isn’t just to attract and convert customers. You have to keep them too.

Life after the Buy button

Inbound marketing – to date – has been about making that initial sale. But with more and more SaaS companies coming online with subscription-based models, SaaS content has to include retention strategies.

Let’s strip the jargon for a second. What I mean by “retention strategies” is:

  • Building relationships with your customers based on trust
  • Earning that trust with a solid track-record of supporting customer goals from the beginning
  • Managing expectations, so you don’t over-sell and under-deliver
  • And setting customers up for success in the real-world

It sounds good, right? But in most companies, this outline would likely find some pushback. Management, in most cases, is very fond of evaluating their sales teams, and gauging the success of their companies, based off of revenue – not Lifetime Value.

What’s the difference?

Revenue is the amount of money you make in a month, a quarter, or a year.

Lifetime value is the dollars-and-cents number you can attribute to each of your customers, both in terms of what they pay in recurring subscription dues, and in terms of the business they bring to the table over the entire time they are your customer. Think cross-sells, up-sells and referrals.

It’s too easy to see the $20K you make from a new customer, and miss the slow and steady $5K that drips in from your existing customers – but if you only focus on those shiny new customers…

  • You’ll pay more to acquire that short-term sale (it costs far more to acquire a new customer than it does to keep an existing one)
  • You’ll make less revenue in the long-term
  • And, you’ll grow more slowly – unless you are able to retain the customers you make

When all of your customer acquisition effort and budget is spent just trying to replace existing customers who’ve left, growth is sluggish – if it happens at all.

Lincoln Murphy sums it up in this equation:

Anti-Growth Math: 1-1+1=1

Focusing efforts (and budget) on Lifetime Value (LTV) requires a substantial shift in mindset. But, when you nail retention, you’ll find that acquisition rates rise, and revenue?

It. Blows. Up.

Let’s look at the numbers.

Here’s some stats from a Drift article on The Power Of Marketing To Your Existing Customers:

  • According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 25% to 95%.
  • In a study of over 500 SaaS companies, Patrick Campbell, CEO and Founder of ProfitWell, found that increasing retention had a 6.71% impact on a company’s bottom line – compared with acquisition, which only had a 3.32% impact.
  • Gartner Group found that, on average, 80% of a company’s future profits come from 20% of their existing customers.

The Customer Success Equation: 1+153162562939000+Their_Friends=A Lot

How do you retain a customer?

Let me put it to you this way:

    • If your goal is to have more people find your website and buy your products through Facebook ads
      • And there’s a company that sells Facebook ads… (Note: This is where most companies stop – once they’ve found product/customer fit)
      • And that company not only sells you Facebook ads but also teaches you how to create highly-effective Facebook ads…
      • Then, you actually succeed in having more people find your website and buy your products via Facebook.

Are you likely to leave that company? No!

That, at least, is the theory driving AdEspresso’s customer retention efforts. Since success for their customers isn’t actually the act of placing an ad on Facebook – they’ve gone one extra step to ensure that customers learn how to get the very best results from their ads by launching the AdEspresso Academy. Their academy doesn’t fit into the Awareness, Consideration, and Decision-making stages of Inbound Marketing – that is, it isn’t focused on bringing in new customers, instead it’s focused on keeping the ones they have. By investing in the real-world successes their clients care about most, their retention rates soar, as do their referrals.

And, by producing so much genuinely helpful content, they attract new clients who want to learn how to improve their Facebook ads – who then find the AdEspresso product that helps them do just that.

Hubspot has the same model, offering Inbound Marketing certifications for free and introducing marketers to their impressive platform at the same time.

Hubspot also builds in success markers into their onboarding process, so that new clients can easily keep track of how they’re doing – and get help if they’re not meeting their own benchmarks.

This is customer success in action. This is retention in the making.

This is why SaaS content marketing is different than SaaS inbound marketing. SaaS content marketing is different than SaaS inbound marketing. Click To Tweet

When every user has an entire World-Wide Web of choices, you have to compete based on the one factor that really counts: Do you have what it takes to help that user achieve his or her desired outcome?


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

SaaS

The 4 Types of Churn, and Why Cancellation Isn’t One of Them ft. @Inturact

churn

Churn is what you don’t want. It’s customers leaving you. Saying yes, then saying “Ah, changed my mind.” It’s the breakup we don’t see coming (if only we’d seen the signs sooner!), and it not only hurts our egos, it hurts our businesses.

But simply saying “churn is when customers leave” oversimplifies the situation. If we examine the timing and causes of churn, we can come up with solutions that can stop churn in its tracks (and even reverse it).

Read More on Inturact


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

Customer Success, SaaS

The Natural, Logical, Inescapable Way to Make Sales with Free Trials by @NikkiElizDeMere

the-natural-logical-way-to-make-sales

Image created by Yasmine Sedky (@yazsedky).

One of my freelancer friends has a problem with billing on time. It drives her nuts; it drives her clients nuts; it’s a recurring problem for which she prays for a solution every 30 days. How cool would it be if she signed up for a Free Trial of new accounting software, hopped on the phone with a Customer Success agent, explained why billing is so darn difficult for her, and had the Customer Success agent walk her through the process of solving her problem?

Would she convert into a paying customer?

Try and stop her.

Now, step back and think for a minute because this is a very different way of running a Free Trial. Let’s look at how most Free Trials operate:

  1. Customer signs up for the free trial and signs in to use the product.
  2. Customer glances over the instructions, but doesn’t really pay attention since he or she expects your product to be more intuitive than a toaster.
  3. Customer doesn’t make the connection between what your product does and the problem they need to solve.
  4. Customer leaves and never comes back.
  5. Your CEO wonders why.

The first major drop-off for app users, including Free Trial users, is after their first or second login, which makes this beginning stage crucial. Yet most SaaS companies use the self-serve model for their Free Trials, which means users are on their own – unless they reach out to customer service. Most don’t. Most quit.

The SaaS Onboarding lesson that applies to Free Trials

There was a fascinating article recently about how Groove addressed this issue in their onboarding process. Their churn rate was uncomfortably high, so they began tracking user behavior to find patterns that predicted churn. Then, as soon as a user entered into one of those patterns, a Customer Success representative would reach out and offer help. For example, one predictive action was taking too much time to complete a task (indicating the user was having trouble).

Groove created an automated email that triggered after a set number of minutes saying “Hey Bill, I got an alert that you might be having some trouble integrating your Twitter account with Groove. If so, I’d love to help. Just reply to this email and let me know. Thanks, Adam.” These emails generated a 26% response rate, and of the users who completed the process, 40% were still customers after 30 days.

Whether you’re optimizing your onboarding process or developing your Free Trial, tracking user behavior and looking for predictive actions is vital to catching users before they fall.

Tracking, milestones, and redefining the Demo

Three Customer Success tactics are usually missing from Free Trials (and make all the difference).

  1. Getting to know what success means to the customer.
  2. Setting milestones marking progress towards success.
  3. Tracking progress proactively.

By setting up users to take meaningful actions towards their individual goals during their Free Trials, you’re ensuring that the next logical step after the trial ends is to become a paying customer.

Some of this you can automate, like asking Free Trial subscribers to answer a short open-ended question survey about their desired outcomes for using your product. But from there, you’ll want a real human to help users define a goal and plot milestone markers to show how much progress is being made. By including interactive milestones, you’re providing a constant reminder of just how much value the user receives from your product.

This is where a Demo comes in – but not your grandfather’s Demo. Often, a Demo is seen as an alternative to a Free Trial, an “either/or” option. But if a product Demo is used not to introduce a product in a general way, but to forge the link between how the product works and what the individual user specifically needs to accomplish, it can be a highly effective customer success tool. During the Demo, you can ask questions of the user, define goals, set markers, and walk them through how to successfully use your product and track their own progress.

But wait – there’s more. Not only should you build into your Free Trial system a way for users to mark their progress, you’ll also need to track their progress on the sales/customer success side. Once again, you’re looking for behaviors predictive of churn. By monitoring user actions, your success agents can step in and help when needed.

Support your Free Trial with content

Content works well to support every stage of the buyer’s journey, but is especially useful in strengthening your Free Trial. With a robust educational content strategy, visitors will come into your trial already having a very good idea of what your product can do for them, making them much warmer leads. Try drafting a content strategy around blogs, newsletters, videos, downloadable guides, Ask Me Anything sessions and webinars that show how customers are using your product to achieve great things. Sometimes all a prospect needs to sign up is an idea of what is possible.


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

Product Management, SaaS, Startups

What sets you apart? It’s probably not what you think. ft. @rrhoover

what-sets-you-apart

Image created by Yasmine Sedky (@yazsedky).

When I ask clients what sets them apart, what I hear from most is a lengthy list of features.

Variations on: “Our product does this, that, and the other thing.”

I hate to shoot them down, because they’re all really proud of what they’ve accomplished. Their products are, in fact, excellent at what they do. But here’s the problem with using features as differentiators:

Features can be copied.

Android phones are copying iPhones (and vice versa).

Google Cloud Storage is copying Dropbox and Box, or is it the other way around?

Germany’s Samwer brothers made their fortunes by blatantly copying existing web companies, including Airbnb and Pinterest, and selling the businesses back to their originators or other interested parties.

If you’ve made something, someone else can and will copy it. But, what they can’t copy is you.

“Oh, but I don’t want my business to be about me; I want it to be about my [product/customers/mission trips to Zambia].”

You’re on the right track with this train of thought. This post on CopyHackers says it best, “Potential clients aren’t interested in you. They want to hear what’s in it for them.” But one of the most important benefits customers get from purchasing your product is the expertise, experience, connections, and even personality behind it – your expertise, experience, connections and personality.

Give your brand a face

Some people are deeply hesitant, if not downright suspicious or fearful, of associating their names and faces with their companies. They believe their brands should speak for themselves, which isn’t a terrible idea. It’s just hard to achieve for startups and newer companies. This mindset also misses out on an opportunity.

It is much easier for an individual to become a recognized and respected thought-leader than it is for a corporation.

Consider this:

When Sean Ellis started GrowthHackers.com, he already had a large personal following and authority. He has earned his place as a thought-leader in the field with years of freely sharing valuable insights.

If someone else had tried to start a Growth Hackers community, they could copy the website’s basic premise of up-voting and commenting – but they could never duplicate Sean Ellis.

Similarly, the vibrant Product Hunt community has a duplicable up-vote and comment system, but getting another Ryan Hoover with all of his experience and Silicon Valley buy-in to run the show is unlikely.

Breaking the mold with community

When you consider what truly sets you apart – it has to be something no one else can copy. Knowledge, personal authority, established presence in the community, insider information, in-depth knowledge earned over years, and the community of engaged followers who gravitate to you.

Hubspot, for example, is an outstanding company that makes inbound marketing, content creation, segmentation and tracking easy. But even its sophisticated system will likely generate copycats in the coming years. What these latecomers won’t be able to replicate, however, is Hubspot’s strong community of inbound true-believers at Inbound.org.

Be the first – no one can take that away

You don’t have to invent something brand new to be the unforgettable first (though it helps). Being the first to introduce (or at least vocally adopt) a trend can also establish your reputation as a leader. Buffer beat just about everyone to being a “transparent” company. They’ve become famous for their “default to transparency” values and are credited for starting the movement.

In Running Lean, author Ash Maurya calls these differentiators “unfair advantages”:

A real unfair advantage is one that cannot easily be copied or bought.

On the list are:

  • Difficult-to-achieve capabilities – think of how Google has dominated the search market by constantly making improvements to be the best.
  • Community – the people who not only follow you, but add value for each other.
  • Dream team – it doesn’t have to be all about one person; your differentiator may be how you harness the considerable talents of others.
  • Exclusive access to a segment of customers
  • Reputation
  • Experience & insider knowledge

Once you’ve identified your unfair advantage, you’ve taken the first step towards building a company that may be copied, but will never be matched.

5 fun things to do with your differentiator

Now that you’ve identified your differentiator, or “unfair advantage,” it’s time to use it. You can:

  1. Use it in your unique value proposition.
  2. Include it in your supporting copy.
  3. Add it to the “About Us” section (with a benefits-focus on the customer, of course!).
  4. Let it inspire your social media strategy.
  5. Let it be the leading voice in your content, positioning you and your company as a thought-leader in your industry.

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

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 Success, SaaS

The Right Way to Reduce Your Churn Rate by @NikkiElizDeMere

Some customers are past saving. They’ve made their decision to leave, and they’ll be out just as soon as they can find the “cancel” button.

Of course you don’t want them to leave — nor do you want more customers following suit.

To prevent more customers from leaving, you need to ask yourself tough questions: How did your churned customer get to that point? And once they’re at that point, is there anything you can do to save the account?

Read More on HubSpot


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 Success, SaaS

Trying to acquire the wrong customer? by @NikkiElizDeMere

trying-to-aquire-the-wrong-customer

Image created by Yasmine Sedky (@yazsedky).

“Customer Success starts with acquiring the right customers.”
Lincoln Murphy, SixteenVentures

For some companies, defining their ideal customer is easy. If you make an app that tracks fertility, for example, your target market is very specific: women between the ages of 25 to 35, who are in long-term relationships, are likely college educated and who make a decent income. From that demographic foundation alone, you can derive enough information to inspire several complete marketing strategies.

But many of us, whether we own large companies, small businesses, or are solo acts, have a number of audiences we could appeal to. The trouble starts when we choose one, and choose poorly.

Don’t try to milk a steer – where businesses go wrong

The number one mistake I see SaaS founders make is failing to identify their ideal customers from the beginning.

If you haven’t defined your ideal customer, you won’t have the information you need to attract the leads who will become your best customers – the ones who love what you do, are a perfect fit for your service, and who will enjoy every minute of their customer experience with you.

Instead, you’ll get a grab bag of some happy customers, and some unhappy customers who will waste your time and drive you nuts when you attempt to deliver the kind of experience or results they want.

When you define your customer from the start, you can:

  • Improve retention,
  • Increase profitability,
  • And Grow faster thanks to referrals from delighted consumers.

The alternative is spinning your wheels dealing with the consumer equivalent of bad relationships – they’ll try to change you, complain about you, and never really love you. This is your business; it ain’t no country song! Stop trying to milk a steer, cowboy. It’s time to find your herd.

Of course, many businesses think they have identified their target markets, but they don’t realize they’ve done so incorrectly until:

  • Acquisition rates remain low
  • Retention rates don’t rise (and no customer success initiatives seem to work)
  • Sales cycles last too long
  • Customer service is overwhelmed with requests
  • Customers keep asking for services you don’t provide, or different features

What usually happens is the “target market” was based on an educated guess. Nearly every business starts out that way, but keep in mind – most businesses fail within their first year too!

How to ID your ideal customer

You’ll be starting from one of two places:

  1. Your business already has customers
  2. Your business is brand new, or still in the “idea” stage, and you don’t have any or many customers

Your business already has customers: If you already have customers, then you’ve probably noticed that some are awesome! Some are exactly the kind of customer you wish you could multiply by the thousands. Make a list of these customers, and then devote some time to analyzing who they are, what they are trying to accomplish, and why your product is such a good fit. What are their demographic details? Are there common personality traits (as in – they make decisions quickly, or they want all the facts before making a decision but are then extremely loyal)?

When creating this list and analyzing your best customers, be sure that they are in fact customers who are achieving their goals with your product. The customer who has been with you the longest but hasn’t logged-in in a year is not the kind of consumer you want to attract (he’s probably forgotten about the auto-renewal on his credit card).

Use the information you’ve gathered to begin building a detailed buyer profile, but don’t stop there. You’ll want to double-check your findings by actually interviewing a few of your best clients to find insights into their user experience you’ll never hear otherwise.

In these interviews, it’s crucial to find out why these customers looked for a solution and decided on yours, and why they’re still with you. Use the answers to these “why?” questions to validate your value propositions and develop customer-facing content and marketing campaigns.

Your business is brand-new: The questions you have to ask remain the same; the difference is that you don’t have a ready-made segment to survey.

One common self-inflicted roadblock is assuming that defining your ideal customer too early will limit your business. Nothing could be further from the truth. As Lincoln Murphy says,

“I think people forget that you actually get to choose your customers. You get to choose who you want to do business with. SO creating an Ideal Customer Profile isn’t limiting…it’s empowering!”

Moreover, this isn’t a one-time-only decision that will forever determine who you go after. Your ideal customer is going to be a (slowly) moving target, depending on what goals you want to achieve.

Now that we’ve leaped those hurdles, here’s how to start defining your target niche.

Begin by asking yourself:

  • What problems does your product/service solve?
  • Who has that problem?
  • Who really needs to solve that problem or their lives will be RUINED? (It’s not just the problem, it’s the severity of the problem!)
  • Will this customer immediately find value in your product/service once they buy it (and by “value,” I mean make progress towards their personal or professional goals)

Once you have a general idea of who has the problem you’re able to solve, it’s time to reach out to real people who fit that profile. This is where you’ll get into a Customer Development approach by using qualitative data gleaned from real-people interviews to get the details on your target market.

Then, make sure you’re targeting the right people by defining the wrong people.

Ask yourself:

  • What type of customer would need the most help and customer support?
  • What type of customer is unlikely to see the value in your product/service immediately?
  • What type of customer won’t be able to make progress towards their goals if and when they buy your product?

By defining who your product isn’t for, you’ll get a better idea of who your product is for.

Target Acquired: What’s Next?

Once you understand who your ideal customer is – and isn’t – you’ll be able to derive insights into how best to reach them, how to express your value proposition, and how to deliver what they need once they’ve signed up. You’ll be able to refine your acquisition process so new customers can realize value faster, which leads to retention as well as upsell and cross-sell opportunities.

Essentially, knowing your ideal customer is the foundation of the rest of your business, and as your business grows, your ability to fine-tune your segmentation will grow with it.

Which makes the next step optimization. Make that your next hundred steps, because optimization is more about the journey than the destination.

As your “ideal” customers begin to come in, you’ll want to put analytics in place to tell you how they found you, who they are, what their customer lifetime value (LTV) is, and what actions they take that correlate with greater or lesser LTV. You may also want to look at which types of customers are your loudest advocates, or who are so engaged with your brand that they’ve become integral parts of your social media communities.

With this information, you can change your marketing strategies to attract certain types of customers, or refine your onboarding process to encourage desired actions that correlate with reduced churn.

Don’t be Surprised

Don’t be surprised if your ideal customer doesn’t make up the majority of your current user base – they probably don’t. Once you begin optimizing to attract and retain them, however, you’ll see their numbers grow as the numbers of your less-than-ideal customers shrink (and hopefully disappear).


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