Georgiana Laudi: Human beings are more complicated than free to paid. We need an experience, we need to see value. In a way that makes sense to us. And because you've got this customer insight and you understand what this customer is trying to accomplish now, what actually matters to them. So now, what parts of your product to introduce to them in what order.
Intro: Hey everybody, welcome to the Forget the Funnel podcast, we’re Gia and Claire, founders of Forget the Funnel, a product marketing and growth consultancy that helps SaaS businesses learn from their best customers, map and measure their experiences, and unlock their best levers for growth.
If you're looking to help your team make smarter decisions, this show is for you.Â
Georgiana Laudi: We're going to talk about customer led growth because it deserves an overview. So that's what we're trying to accomplish today is why should anybody care about consumer led growth?Â
Claire Suellentrop: I can read off the definition that we have been using maybe as a starting point.
Customer led growth is a strategic approach. Approach to what is the question we're going to answer in a minute that leverages customer insights to qualify and quantify customer value and then operationalize and optimize your end to end customer experience. So let's like put that into some context approach to what strategic approach to.
Georgiana Laudi: Where it came from was leadership teams or those either heads of marketing or heads of product marketing or heads of product or founders and CEOs wanting to make better decisions about how to grow. That is really what this approach was meant to do was answer that. And this sort of genesis of that was like, Primarily like for these customer facing teams and people within tech companies, really enabling them to learn what is needed to create a better customer's experience to drive more revenue. And when you come back with like real customer quotes and real customer data, it can be very empowering and it can help get stakeholders bought in and it can help create better outcomes.
Alignment for the, across the entire team on what is this customer experience that we are building? Who is this customer that we're even serving? And what is the customer experience that they need in order to create value in their lives, which then in turn creates value for the business. You don't have to guess.
You don't have to rely on best practices. You don't have to read every blog in the world from every episode. Relying on experts and people outside of your and for your team and company to be making strategic decisions for your company and your product and your customers is just like absolutely silly.
And there's no such thing as best practices. For anybody who doesn't know, we just ran, we just rolled out three episodes about best practices. And that's actually part of the reason why we came up with this framework was because you don't have to rely on best practices or experts or basically everybody else to tell you how to do your job.
There's a better way to get the answers. And we have a visual to help illustrate this point. And there are many like leds, right? Like marketing led, community led is coming up a lot. Content led, I think I've probably even heard. Sales led, obviously. Product led, obviously. Engineering led doesn't get talked about that much, but is a thing, especially at companies like Facebook and things like that, right?
And then there are, there's product led sales, a little bit more nuanced, totally interesting, totally relevant here. It's another sort of motion, like growth motion, for lack of a better expression. And the customer led growth approach is really meant to inform All of those motions like not only which one should you leverage, but how should you be leveraging it?
And how should you be basically executing? So this brings me back to a conversation I had just a couple of days ago with a founder that got in touch that was basically saying that His head of product was going in the, like today right now is going like full bore on PLG and I was like, Oh, what does that mean?
He was like, he's super bought in. He's reading all the books. He's doing all the courses. Like he's doing all the learning. That he can about what is product led growth? How can they be leveraging it? What does it mean for the organization? How would it change their model? Cause they're predominantly rely on a sales led approach right now and they want to go product led.
But the point being is that this founder was like, is that a mistake? And also do we have the order of events? Because I think what he's seeing, I think he's seeing the writing on the wall, right? We're like, okay, we make all these major investments on taking a product led approach. Huge product decisions, huge engineering and like technical implications and investments that you need to make in order to leverage PLG and imagine you do it and it fails, or imagine you do it and you're wrong, or imagine you build a customer experience and by the way, this happens all the time, you build a customer experience or a product experience that doesn't work.
Then land, and then you've got to add people to it in a way it is a very scary proposition for a founder who's got a product team or even, a founder who's I want to leverage product like growth without really understanding how to make decisions about people. And so what this founder knew, he was on the phone with us, so clearly he had some inclination that like maybe we should be figuring out who it is that we're serving, what they actually care about so that we can figure out what product experience or product led experience to even do.
Build for them. So I thought that was very wise and I commended him for hitting the pause button on just going full bore on PLG before really understanding who is this target customer that we're going after here and what's the, that again, scalable product experience that we're going to be building for them that we're going to Basically bank our entire business on.
And I know you have one too, actually that you were talking about actually on the opposite side of the spectrum.Â
Claire Suellentrop: Oh my gosh. Yes. I was speaking at a conference last fall and the theme of the conference was all sales. Something inherently wrong with that. It is an important motion that is needed in some customer experiences.
Not all, but I was a bit of a, I was a bit of an outlier in terms of the speaker lineup, because I got up on stage and talked about. What you and I are going to discuss here, which is learning from your customers and identifying which of those motions they need before going full bore on any one of them.
Not that it didn't in any way negate that, like building out a sales function can be important. But then after I gave that presentation in just, casual like dinner conversation that evening with other speakers, at least two folks acknowledged like, Oh yeah, what you're describing obviously has to come before building out a sales organization.
Otherwise, to your point, like you're throwing people on top of a suboptimal customer experience and it can, there's, I'm like, my stomach hurts a little bit. There's so many different problems that can cause from a team standpoint to a business viability standpoint. Why don't you paint a picture of what are the three phases of customer led growth?
Georgiana Laudi: The first Basically, phase two, leveraging customer led growth and doing this work, making better decisions is getting inside your best customer's heads, mapping and measuring your customer's experience. So that ideal customer mapping and measuring their experience. And then number three, unlocking your best levers for growth.
So I think. Best place to start is really clear. Walk us through what does it mean to get inside your best customers heads.
Claire Suellentrop: In many cases, when a team comes to us to engage in, in doing the work to understand their best customers, one of the things they need to solve for is the fact that they don't have a don't necessarily even know who their best customer is, right?
They've got their CRM or their database of customer data, like in the aggregate, but there's not a ton of alignment or even understanding internally of who within that database they want to go out and clone or find more of versus Who's not actually a great fit. So I think the foundational part of understanding your best customers is figuring out within that set of customers you've already got, who is a great fit and what attributes of the, make them a great fit so that you can go out and find more people like them to bring this more into focus, but there's a company we have been working with over the past I don't know, a couple of months, really cool product. So it is a, essentially a customizer for e commerce brands. But this company came to us and they're the types of customers they're bringing through the front door are all over the map.
They've got tiny e commerce brands. They have massive e commerce brands, if people with all different job descriptions coming in and making the buying decision. So they don't know if they're targeting executives. They don't know if they're targeting product designers, website designers they're just like, we're getting these people.
But we have no idea who to optimize for. And in not knowing who to optimize for, they don't know whether they should play with their pricing strategy. Should they play with, the onboarding experience? Do they make it a self serve experience? Do they make it a white glove experience? There's just so many unknowns about what to do because they're not really sure who is a good fit and who they want to attract. So figuring that out is do not pass go if you haven't, if you don't have that information and your team is not aligned, all that information. Once you know that going back to being able to make better decisions, it becomes so much more obvious how to think about pricing or how to think about the appropriate onboarding experience.
People get into the product and You may be tracking, activation in a very crude way, which is like, trial started, converted, or trial started, did not convert. And then there's just this black box and your team is just left to, to throw like tactics at, okay maybe we should do email or maybe we should do in app prompts, but what do we put in the in app prompts?
There are so many unknowns for your team to have to scrounge around and figure out when they don't know who they're actually serving. And what those people care about in terms of, what about their pro, what about your product are they trying to get to?Â
Georgiana Laudi: So if you're not sure if you have customer blind spots, the way we're describing, we did do an episode on this.
I think it was one of our earlier episodes. We've also run a number of other podcast episodes where we talk about like customer segmentation and running, how to run customer interviews and like myths about research too. We would highly recommend checking out the research myths episode, because that will be great.
Be very helpful. The act of mapping and measuring your customer's experience. We call it customer experience mapping because it really is about that end to end customer experience from before your ideal customer even has the problem that your product solves through experiencing that problem for the first time and that pain.
All the way through to singing your praises from a mountaintop. We often describe this as the customer that you'd have to pry your product out of their cold, dead hands. These are the lifer customers that absolutely love you. So there's a, that's a big sort of like span, right? That's a lifetime of a customer from beginning to end.
And it really does begin before your product is even on their radar. And that's because context is so important. And so it is really critical to understand what your customer's life is before you are even in the equation and what is the old way, right? How are they solving the problem that you helped them solve or not before you exist?
And how do they make a decision on, what's the sort of trigger moment? on them needing a new solution. How do they go about seeking out that solution? Who do they talk to? Where do they go? What are their watering holes? What are the sources of influence in even coming up with a long list, let alone a short list?
How do they come upon you when they get to your website? What does that experience look like? What is the appropriate early experience and early evaluation of your solution? What are the, again, influences going on in their life? Whether or not it is like they're still working with the old way, or they've got stakeholders looking over their shoulder, or they've got colleagues involved.
All of that taken into account. What does that buying process look like? What are their objections, their motivations? What ultimately are they trying to achieve? What does success look like in your product? What does a happy, healthy customer look like, right? A lifer type of customer. And what situations or opportunities might arise after they've solved their initial job to be done with your solution.
What next? What's the next opportunity that you might have to continue your relationship with them? Because we are predominantly talking about SaaS recurring revenue model businesses here. So every business stands to benefit by thinking about, customer expansion and retention and lifetime value and recurring, recurring value being delivered, but it is particularly important for a SaaS business model to think through not only acquisition and actual, like becoming a customer, but also growth and expansion with our customers.
Claire Suellentrop: I want to. I want to drive that last point home a little bit further because it, this gets so often overlooked or overshadowed by acquisition and better onboarding and so on, but going back to this product and team that we talked about a moment ago in learning from these customers, we had already done the hard work of making sure we were only speaking with good fit customers.
But then even within that batch of good fit customers, there was this very clear divide between. Customers who were happy with the product, not at risk of churn, but also really not thinking about expansion at all. And then there was this other batch of customers who were thinking very strategically about as I scale my brand, I want to take this thing with me and I'm going to need to do this and this.
And we even had people say on interviews I would pay more if you can help me take my brand to where I want to go. Think about the power of your team being able to tell those two different customers apart and optimize for the one. that wants to grow with you.Â
Georgiana Laudi: So mapping this end to end customer experience is really about understanding intimately what your customers are thinking, feeling, and then ultimately doing through this entire customer experience, end to end.
And if you can understand that journey, that sort of documentary of your customers, the evolution of your customer's relationship with you, you can identify milestones. in their relationship with you. Now, there are three phases in every customer experience, and that is the struggle phase, which is them having they're either out in the world experiencing the problem that you help them solve.
Then there's the evaluation phase, which is basically them trying to figure out, are you the one that's going to help them solve that problem? Ultimately, the evaluation phase ends with, yes, this thing is going to solve my problem. This is the solution for me. I'm in. And then the growth phase. Every, all the amazing things that have happened after that, which is like happy, healthy customer.
So continued value being delivered because again, recurring revenue, you need your customers to get continued value from your solution because often every month your customers are making a decision about whether or not to continue investing in you. So those are the three phases, but within these three phases, there are these leaps of faith that your customers take in you.
In each of these, as I alluded to earlier in the struggle phase, generally, there's two, there's like this, like having the problem stage and then there's this interest stage where they're seeking out a solution, evaluating in the very early stages of evaluating, trying to figure out like, Is this something that I even want to try on?
And then the evaluation phase is where things get the most, I'll say interesting, but really, they do, they get the most fun. Yeah, I say fun, but positioning and messaging on a website, I still consider very fun. But on the flip side of that, how is your product experience or customer experience helping somebody get to those moments of value?
And we all know that it is very important to demonstrate value. pretty quickly, but you can't fall into the trap of throwing the kitchen sink at customers. We talked about this in the book. We've got so many examples of companies that we have worked with that are just like sign up, become customer trial to pay conversion rate.
That's the only thing that matters or sign up free to pay conversion rate. That's how we measure everything. And actually your customer's relationship with your product. Is a lot more complicated than that. And I don't want to make it sound like we're trying to make things more complicated than they need to be.
No, they legitimately need to be more complicated than that. Like human beings are more complicated than free to paid. We need an experience. We need to see value in a way that makes sense to us. And because you've got this customer insight and you understand what this customer is trying to accomplish, now you know what actually matters to them.
So now you know what parts of your product to introduce to them in what order. So we often refer to the evaluation phase as like first value and value realization. Sometimes a product is complex enough where you actually need like First value, promise, value realization. Again, value realization is like I've solved my job to be done.
This is the solution for me, but we often need to like bite size or right size our customers experience with our product in the evaluation phase in a much more nuanced way. Then many of us think the example that you brought up already with the e commerce like product customization product is a great one because they came to us with a little bit of a lack of understanding on who their ideal customer is.
But moreover, what they came to us with was an early product experience that basically made a lot of assumptions about what their customers were capable of. And their measure of success was that new customer getting a product launched. And making sales on it when actually the act of adding their first product, adding the customization options.
All the back end settings that need to be in place in order to make their first sale is actually pretty complicated. It's amazing. This team has done an amazing job. It's a really cool product. So when they're in that early customer experience, we need to show them this is going to save you months of custom development time.
You can do exactly what you need to do in a much more expedited way. Because what customers are comparing them to is not another point solution or like a tool.Â
Claire Suellentrop: Yeah, a different customizer. They're like, do I want to pay a developer to build this thing for me for the next six months to a year?
Georgiana Laudi: That's the context that somebody is in that very early customer experience. And so what do they need to see? They need to see that they've got all the customization needs they could possibly need, but they also can't be shown so much. that they get lost in all of the steps that are needed. And so if you haven't figured out how to get new customers, reaching first value within your product and reaching value realization for all of these milestones that you've identified, these key sort of moments of value, these key leaps of faith, like we like to call them in your customer's relationship with you.
You should be able to measure your customers reaching that value. Now, we are not talking about MQL, SQL, or even, PQL necessarily. We're not talking about your child to pay conversion rate. We're not talking about a customer paying or entering a credit card. We're not talking about transactional moments.
We're talking about customer led, these customer focused leading indicators of success that demonstrate to your team that you've helped your customer Reach a moment of value and the way that you measure that might be super obvious and it might not and it's really going to depend on Your customer and your product.
Okay, so we've talked about this end to end experience with the struggle phase evaluation and the growth phase. And because we've got these milestones, we need to create experiences for these customers that address their needs in the context that they're in a given milestone in their growth phase.
relationship with you. And so we need measures of success for your team to take advantage of and get her to know, yes, we have helped our customers reach moments of value. This is not the same as trial to be converging. It's not the same as signed up necessarily. There is generally product usage.
That will demonstrate that your customer has gotten to the first moment of value. The easiest way to describe it is then value realization, where they fully realize value, where they've successfully adopted your product for the first time. So we're often looking for what does a happy, healthy customer look like?
From a product usage standpoint, a lot of companies rely on like weekly active or monthly active or daily active users as that measure of success. KPIs like that are wildly problematic because logins to your product aren't necessarily indicative of value. Okay, so that is the mapping process and the KPI process that really enables us to deconstruct that customer experience in a way that the team can get really excited about building really resonant, high converting customer experiences.
And we now have these leading indicators of success, which will ultimately impact those lagging indicators of success. Like our Child to Pay Inversion Rate, like MRR growth, like acquisition numbers and things like that. So that is the second phase of the customer led growth sort of framework. Want to walk us through the next one, Claire?
Claire Suellentrop: It's the most fun one. A couple of times earlier in this episode we used the phrase, do not pass go. So this is like finally letting your team pass go. And what it consists of is you've figured out who they are. You've figured out what experience they need to have to get to a moment of value. And you've figured out how to.
Measure your own ability to get them there. You can finally look back at that customer experience map and what you're currently doing out of the wild and figure out where you need to make improvements, right? Where should you be spending your time? To See some kind of optics.
Georgiana Laudi: So oftentimes when we're working with teams, they're like, we know our product onboarding isn't as good as it could be, or, we are not acquiring enough customers.
We don't have enough signups on our website. They'll, so they're very focused on positioning and messaging outputs of this type of work. But I will say 99 times out of 100 when we're working with teams, we do identify that the evaluation yes, the positioning and messaging needs updating 9Â times out of 10, but the product onboarding experience is generally where the most sort of money is sitting on the table, so to speak.
And when we are working with teams, what we do is we sit down with all the major stakeholders for a half day workshop. And we go over this whole thing. It's just here's what we learned. Here are the milestones and your customers experience here are the KPIs for measuring the success.
Here are the parts of the product that deliver a ton of value. We do the value mapping exercise. And then essentially what we're doing with the team is saying, okay, so here's what we know the ideal customer experience is, and here's what you're doing today. big board. It's like the documentation of doing if we were doing like a, if we were a secret shopper, but because we're talking about software, it's like this big board of like screenshots and videos and arrows and like emails.
And it's like a big heuristic analysis of what the customer experience is because we know what good looks like. And we know what the current experience looks like, the ways to connect the dots and fill those success gaps for customers becomes really obvious. So during that workshop, we're like, Here are all your opportunities.
And the team's holy moly, sometimes they're like, oh yeah, we thought about this. We tried that once, but we didn't have this piece of information or, oh, we never thought about that before. Or because we talk about as well, like the milestones typically are more nuanced than what a team is used to. All of a sudden, A whole these additional opportunities become really obvious to help customers get to these moments of value because they've never unpacked or deconstructed the evaluation phase in quite that way.
So it becomes really obvious how you can help customers. So as we're sitting down with the team, we're looking at all those opportunities. And generally what happens then is we get into a discussion about what are these opportunities, but also what order in which. We should execute or start implementing these opportunities because that's really important as well.
And so that's when things start to get really to use your word, like exciting and fun. But it's that taking a step back and looking at first of all, having the picture of what good looks like is critically important. But then looking at what you're doing today, it just becomes really obvious, like the job's done for us really.
Claire Suellentrop: Early on in, in podcast, we recorded an episode with Dan Stewart. who is the president of Invoice Simple. Dan and the Invoice Simple team, super lovely, super smart, super data driven. But the Invoice Simple team brought us in to work with them because they had a ton of customer data in the aggregate - they didn't have a lot of intel into those little micro moments you're describing. They didn't have a lot of intel into When someone gets into this product, what do they actually need to see to get to value? And so we were able to come in and really like work alongside the team to pull that insight from their customers, which informed so many of the, like so many of the product experiments they were already running.
But specifically there is this feature inside of like this invoicing product, which if you are sending an invoice on Invoice Simple, you can press a button that allows your customer to pay you right on that invoice, right? And this is a pretty critical feature from like the business standpoint for Invoice Simple.
The problem that we were attempting to solve as a group was, first of all, understanding why are more of our customers not turning on this payments functionality? What's not hitting right now? And what can we do to nurture more customers to turn on this payments functionality and actually take payment through our product?
And so what we learned is Not that there was anything necessarily broken about the payment's functionality in particular, but what we realized was when customers are onboarding into this invoicing product and they're being nudged in the onboarding experience to enable payment acceptance, they have no context for why they would want to turn that on.
What we realized was there was this opportunity to help their customers understand the benefits of getting paid on their invoice rather than all the other ways they had arrived planning to get paid. And We really didn't change much about the product experience at its core. But what we did do was launch a campaign that would fire when someone was getting set up with the product for the first time that talked more about Welcome to Invoice Simple, like we're super glad you're here to send invoices.
If you turn on payments, here's all the great things that are going to happen. And we would never have been able to conceive of that campaign. We never would have been able to even know what would need to go inside of that campaign if we hadn't known Welcome about the ideal customer, what they cared about, what questions they had, paired with this secret shop experience of what they were seeing in real life day to day.
So I think it's just a really good crisp story that brings home this entire process you've described. And there was a nice result at the end of it, which is always great.Â
Georgiana Laudi:Â There was a 37 percent increase in adoption of payments, correct?Â
Claire Suellentrop: Versus the number versus the percentage of customers who were enabling payments prior, which is Amazing again from a business perspective, because this is a revenue generating feature.
Georgiana Laudi: Yes. Yeah. And like mission critical. It's not that they weren't talking about payments prior to that. These opportunities basically surfaced after this heuristic analysis and understanding, and we were able to tie the, not only the opportunity of like where, but also what to say. And it was a lovely like marriage of things.
And it was a really cool project. That brings us full circle to. Phase three of the customer led growth approach and framework that we do cover the entire framework from top to bottom in the book. So if you are curious to read more about and get a bit of a more in depth walkthrough of the process, highly recommend checking out the book.
But again when we're working with teams on this process, what we do basically is we work with the team to identify the segment of customers to learn from. Then we learn from those customers and we learn that we get a ton of amazing nuanced information and context and insight into what those customers actually care about.
And then what we do is we map What they say matters to them is essentially to the parts of your product that deliver that product, that value, which then enables us to map the customer experience from end to end, identify those KPIs. And then we do that sort of heuristic analysis of your customer experience to identify all those amazing, growth opportunities, all those opportunities tha maybe your team has seen, but couldn't validate investing in, or maybe had no idea was even an opportunity, like the example that you just described, Claire. And basically we sit down for a half day workshop and go through it all with the leadership team to create that alignment. And I will say that doing that as a team and an alignment tool, we've gotten the feedback out of the workshop.
I can't even count how many times founders have reached back out to say, like the alignment that creates to just. Everybody get into a room and everybody is there and in alignment on what is it we're trying to do and what are the opportunities and everybody knows that everybody else knows what the opportunities are.
That does a ton for helping enable and execute and actually take advantage of these opportunities. So that's the process that we run through with teams. Obviously, if you're looking for help executing this and implementing this with your team, then you can just get in touch if you want to reach out and then yeah, you would just do that just on our website, forgetthefunnel.com.Â
Claire Suellentrop: All right. Thanks so much, everyone. See you next time.Â
Outro: And that's it for this episode of the Forget the Funnel podcast. Thanks for tuning in. If you have any questions about the topics we covered, don't hesitate to contact Gia or myself on LinkedIn. And you can also visit our website at forget the funnel.com.
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