Georgiana Laudi: Hey everyone. This podcast features a presentation that I gave at the Business of Software conference just a couple of weeks ago, so it is definitely best enjoyed visually. I'd really recommend that you head over to the YouTube channel to enjoy the full experience. The other thing that I wanted to mention is that right now, the Business of Software Conference has early bird ticket pricing going on their website for their next event, which is in March in the UK.
I cannot recommend this event enough. It was top notch. The team is top notch. Mark Littlewood and his team are absolutely incredible. This is the, 14th year they've been running this event. It is such an amazing experience. It is such an amazing community, particularly for SaaS founders, heads of product marketing.
If you're responsible for growth, you will get a ton out of it. The content is amazing as well. So again, I would head over to businessofsoftware.org in order to pick up an early bird ticket, which is again, heavily discounted and worth absolutely every penny. I really hope I see you there.
Hey, everyone. Gia here. Happy to be back. And I wanted to share with you a presentation that I gave recently at the Business of Software Conference, and I got tons of really great feedback on it and just how useful it was to folks who were there. And so I thought it would be the right thing to do to share it with you all so that you can, enjoy the benefits of it as well and hopefully make some changes and figure out how to get out from underneath these four reasons why your product growth may be stalled right now.
So the best place to start is really to set some context on where. This all kind of came from for me and for us when I was in this situation. And so starting out this really embarrassing photo of myself from 2012. So this is back in 2012. I'm in house at a tech startup at Unbounce as some of you might know.
And at this point, I'm already 10 years into my marketing career. So I wasn't like, I wasn't new to marketing at this point, but this was my first real in house role at, in a marketing leadership role at a SaaS company. And I just moved from Montreal to Vancouver to lead marketing at a largely marketing led tech startup.
And we were also largely bootstrapped. And there's this laughable, obviously nerf gun in my hand here, but even out, like just out of frame of this photo is a ping pong table. It is the 2012. Startup that you can imagine. And as you can probably also imagine, there was a lot of pressure to grow quite quickly.
I felt a ton of, I don't want to say stress, but I was really operating like it A chicken with my head cut off, really trying to over deliver and make a big impact. And I felt a ton of responsibility for the growth of the company, particularly because I was in a marketing leadership role at a largely marketing led SaaS company.
And so the problem is that I'm absolutely terrible at prioritizing. And it is around this time that I find myself in San Francisco for a conference. And while I'm there, I'm really, I'm trying to think of, like, how do I stop operating in this chaotic mode? And really, it's my opportunity to take a little bit of a step back and look at how I've been operating so far.
Or running, panic mode nearing the end of the month when I'm about to, miss my targets for the month or, sometimes I'm exceeding them. Sometimes I'm way behind. And so I'm in San Francisco and I reach out to Lenny Ruchitsky. And so I know that, many people now know who Lenny is, but what a lot of people don't know is that back in, I think it was 2010, 2011, Lenny Ruchitsky was actually incubating his Startup in Montreal.
And so I got to know Lenny in the local tech community and his startup was then acquired by Airbnb. And so he moved to San Francisco. So while I was in town, I reached out to Lenny and being the, standup amazing guy that he is hung out with him a couple of times. And on one of the occasions he was like, “Hey, it's beer Friday at the Airbnb head office, you should come by”.
And we went to the the headquarters basically of Airbnb for their Beer Friday and he gave us a tour of the office. And you can maybe imagine how incredible this place is, right? So again, like Airbnb headquarters, this is 2012. Their office, their building is just like beautiful. Their meeting rooms are all modeled after They're popular property rentals.
It was like really full time caterers on staff. It was amazing. And really polished and like an incredible experience to get a tour of a lot of people toward this office. But then he shows us downstairs where the product team works and it is a very different environment down there. It's all open concept.
It's messy. There's like the Starbucks coffee cups from that day. And I notice that in all the sort of chaos more so than this photo sort of lets on when I notice sheets of paper taped to the wall and a lot of the desks are facing this lineup of papers on the wall, and I lean in and I realize that it's the Airbnb customer journey, but this thing is nothing like the customer journeys that I had become accustomed to or that many, in the marketing space had become accustomed to at that time.
It was not about funnels. It was not about flywheels. It wasn't about the buyer's journey. It wasn't life cycle metrics like MQL, SQL. And it wasn't even like pirate metrics, which, fun fact, I'm, I was a big fan of pirate metrics when I first discovered it because Hell yes, marketing in SaaS, tons of, value to provide to the business in post acquisition.
And I really thought pirate metrics were going to be like, we're going to save the day for marketing and tech. But I digress at the end of the day, all of these tools, what they do is they smoosh and flatten our view of our customers. And they make assumptions about our customer's experience, assuming that all of our customers are the same, all product experiences are the same.
And this Airbnb customer dream app was absolutely amazing. Absolutely nothing like that. It was completely through the lens of value to the customer. So it was anchored not in like transactional moments for the business, but rather customers moments of value. And so this is the important context that I want to set as I go into the rest of the material.
This is really important. So Their Airbnb customer journey map was later illustrated by Disney. So pretend for a moment, a minute, this is not what it looked like at all. There were no emojis involved. It was illustrated where there were like characters and there was an emotional journey. And it was really visual for me, like the highs and lows standpoint.
And it was again, completely through the perspective of the customer, how they experienced value, how they experienced value. Take leaps of faith in their relationship with the solution or in this case, Airbnb, how they make decisions. And you might look at this thing and think, what is the big deal?
It's just a customer journey map. This is not novel, but what you have to remember is that no one at the time, and even really like very few, even now operationalize our customer's experience through the lens of value to customers. customers. Again, this is not about these like lifecycle transactional moments of value to the business, which the vast majority of us fall into the trap of relying on.
And again, the big problem with this is that in the vast majority of cases, not only does it flatten our view of customers, but it also leaves out this really critical and important context and nuance for our customers. Of our customers lives before they discover that we exist and afterwards. And so what I mean by that is this, right?
Our customers experience with us starts when our customer first experiences the problem that our product helps them solve. And they move into sort of solution seeking mode where they eventually discover that we exist. Then they move into this evaluation mode. Assuming that our website does a good job, right?
They decide to give us a try for the first time, or they book a demo. And they finally get this view of okay, we could probably, this might be the solution to get us out of our problem space. And then eventually in that evaluation phase, it ends when they know that we can help them solve their problem, their solve, their job to be done.
But then really importantly, the growth phase, right? So SaaS businesses, any recurring revenue business lives and dies based on this growth phase. So every month we need to be delivering continued value to our customers. And then where SaaS gets really interesting is an expansion and advanced usage of our product and upgrades and all kinds of other sort of monetization and growth opportunities that exist for our customers.
Post acquisition. So whether or not we want to choose to think about our customer experience in this holistic end to end way or not doesn't mean that they don't experience it this way, right? They indeed experience it in this holistic way. So when we think about it, it's like our brand, whether or not we choose to think about our customers relationship with our customer experience or our experience in this way or not.
It doesn't make it true. Not true. Now, all of our customers experience are unique. I'm not trying to say that every customer goes through this, this exact these exact moments. Or milestones, but they do experience something like this, whether or not you choose to optimize it or not, it's there.
Our customer's experience is there. It's like this omnipresent type of thing. And what I really want you to remember here is that growing your product means making this experience as resonant and as high value as we possibly can. And this was the pivotal mindset shift for me. This is the lightbulb moment that I experienced when I was standing there in the, downstairs in the basement of the Airbnb headquarters back in 2012.
I couldn't believe my eyes that I had not thought about the customer experience in this way. So this was a pivotal mindset shift for me, but also for the business. And within two years, we grew revenue by nearly 900%. We were on the Forbes fast 50 list, like all the things, but the most important thing to remember here is that this customer, these customer success milestones became part of our DNA.
They became part of how we operate it as a business, how we measured success our benchmarking, how we prioritized work, how we thought about team handoff points conversations that we were having with our engineering team or a product team. And again, if you take nothing else away from this at all, it's make sure that it is this, okay.
When we prioritize and optimize our customers, like our ability to help our customers achieve their goals, we achieve ours. This is the big, this was the big unlock for me. And now I want to obviously switch focus. How do we identify your unlock? How do we put you and your team in a position to be able to make amazing decisions like this, grease the wheels on all kinds of growth levers and opportunities that you may not have clarity on.
Yeah, the four things that I want to talk about, the four sort of, shitty realities that are, that may be standing in way of you, identifying your unlock are, it is really hard to not only acquire, but also keep customers right now. And I'll talk about that a little bit. So teams are also having a really hard time operating in panic mode, think short term thinking, unfortunately is being prioritized over long term revenue growth. We have a data addiction problem and it causes us to make decisions in a vacuum wildly problematic. And then we are also, and this is probably the biggest problem is that we're missing. We have way too much context about our customers. And we need that context in order to convert and retain these customers for the long term.
We're just outright missing information that is available to us. So before I get into why the market is so tough, I wanted to do a little bit of a thought experiment with you all. And I know you won't be able to respond back to me because I'm not standing in front of you in person. But like in your mind's eye, see if you can come up with what you think between these two products.
Product A and Product B. Product B, which one of these has the better outcome? Which one do you think will have the better outcome? So product A, amazing product, the kind of product that even like product managers love and product folks love, really great UX really solid, solves a real problem for a very real audience but their go to market is not great, not strong at all. And product B is really not that special from a product standpoint. In fact, it's like not a great product experience and it is, even potentially commoditized undifferentiated from a product standpoint, but their go to market. Is absolutely like on lock and really solid.
Which one of these products do you think has the better outcome? I I'll pause for like you to think about it, but I know you can't respond to me, so I'll just give away the answer. Maybe this was obvious to some of you, but there is just no way that product A wins or has a better outcome, let alone survives in this market.
And why is that? And you might already have known or sensed that product B was going to be the winner here. But it's a sad reality that's true, but why is that a reality? The reality is that the market is just, they don't care. The market does not care how awesome your product is. It is very tough right now.
And part of the reason why it's really tough to make a dent in this market is because the market is. For many industries, just wildly saturated. Some of you might be familiar with this. This is the sort of requisite marketing MarTech landscape that some folks might have seen over the years.
Particularly those of you with marketing backgrounds. You've definitely seen this thing before. But this is the 2024 version of this. And for the 13th year in a row, This thing has grown and there are over 14, 000 products and this only represents MarTech, right? You could look at this in EdTech or FinTech.
They've all grown. I don't, obviously I can't say how, at what rate they've all grown, but MarTech alone grew 27. 8 percent in 2024 over 2023. That is, 9, 000 percent growth since Nerf Gun Gia years. Back then, there were only 350 products on this thing. Think of how dramatic that it has an impact on, our ability to differentiate out in the market.
It has never been harder to capture attention, especially if you're in a saturated market like this. And this is another really painful example and a one that we love to call back to because it is so common that we see this happen. So John Henry Shirk is a very, he's like a best in class marketer and performance marketer, and he was working with a team.
And this was a tweet that he shared a little while ago. He was working with a team where he was able to increase. High quality traffic by 600 percent in a year over year, and he had to let this company go because no matter how high quality traffic he could drive for them, it wasn't generating pipeline like it, it wasn't performing for them.
It was all lost. And so throwing money at this problem is not a growth strategy. It's a recipe for over reliance on a channel that will eventually lose ROI. Rand Fishkin talks about this quite a bit too, right? It's pretty well documented. Relying on paid channels like this is, it's just not a strategy.
It's a channel that you can leverage for certain things, but it is not a growth strategy. So you just can't, Keep throwing money at this and thinking that paid channels are going to be your ticket to growth. So at this point, you might be like, all right, how are we supposed to get more customers?
If marketing channels like these mainstay marketing channels like this, aren't the thing, how are we supposed to grow? And the answer, that you might come to will vary depending on, what role you're sitting in, of course, but at the end of the day, across the board for every business, I'm going to break out the sparkly emojis here, profitability is finally at the forefront of SaaS companies.
And it sounds ridiculous to put the sparkly emojis like this is something novel, but it is in tech profitability has not been at the top of people's lips for the last 10, 15 years. It, long gone now are the days of growth at all costs and, move fast and break things.
Finally, in the past few years, leadership teams and founding teams are finally looking at profitability. And so I want you to imagine a world that, we're thinking about product growth and acquiring more customers rather than spending more on ads. What if we were focused on doing a better job with the traffic that we're able to generate before we start filling the top of this, funnel, so to speak?
And what if we could do more with not only the traffic that we were generating, but even the leads and the signups that we were already getting? So I'm going to share an example. So a team that we worked with a little while ago reached out to us and they're in the social media space.
They were largely product led, actually almost entirely product led. They had no sales team. They're about, they were at about 2.5 million at the time of reaching out to us at about 5,000 customers. And the president reached out saying. That revenue growth had been flat all year and that they'd been trying everything and that they were really wanting to identify a repeatable model.
And they were doing, she used words like pushing traffic to our existing funnels, right? So they've been trying pretty well, everything that they knew. And something that's really important to know about this team is that they have really high quality content, like prolific. Like the best content marketing, you could ask for basically, the founder of the company was, a powerhouse when it came to thought leadership and content generation.
So this company had been built on the back of thought leadership and content and distribution. And so when revenue started to slow. What do you think they did? They doubled down on that content, right? They invested in SEO heavily. They doubled their content marketing team. They started investing in ads to try basically anything they could to change the trajectory of this, flattened revenue.
And luckily they also were in a situation where they had lots of happily paying customers. But again, their problem was that they had revenue growth had flatline and they had been trying everything and they just, nothing was really moving the needle. So we decided that because they had happily paying customers, we were in an opportunity to figure out what led these happy customers to sign up in the first place.
What was this company doing right? Was this brand and product doing right? And so we learned from their customers and we identified that there were two sort of main primary groups of customers. Anybody who's familiar with the jobs to be done framework will know what I'm talking about. There were two primary jobs to be done that sort of showed up here.
And the first one was at small businesses who were looking to build their audience and start getting serious about their marketing, right? They gushed over this company's amazing content. They flocked to their website, gave to the team. Traffic to brag about. They loved their customer success team, right?
There were the vocal majority for this company for sure. And then this second group was this group of customers that had already validated this channel. They were just bogged down with their existing processes, and they were looking to automate the way that they did this work. And so they Never needed or asked for any sort of like discounts or promo codes with which the team had been experimenting with and they flew in under the radar and they activated in the product without any help.
So you can imagine that for this team was very easy to conflate these 2 customers together, right? When we took the time to actually learn from customers, we learned that this team had been focusing on the wrong group of customers for years and that this wasn't one customer that showed up with both of these things.
It was two very distinct groups of customers. When we finally segmented them and looked at them on their own, we realized that one of these groups was the vocal majority. And the higher cost to acquire and this other group was this group that, flew in under the radar and was much higher.
So lower cost to acquire, but also higher LTV. So what did they do with this information? They updated three pages on their website and the outcome of that was incredible. 89%, improvement on their website signup rate by impacting by updating the link. homepage features page and pricing page.
But the absolute best part of this story is definitely that their trial to paid conversion rate increased by 40%, just again, by updating three pages on their website. So they had been investing heavily without this clarity for years, relying on the wrong inputs to tell them what was working and where to focus without actually understanding who their best customers are.
And they didn't spend a cent on marketing for these results. So again, To drive this home, right? Do you see now how you can acquire more customers, not by adding to the top of funnel, not by spending on costly ads, but by actually focusing on, the opportunities that sort of exist here with the traffic that you're already getting with the signups that you're already getting with the product, even as it exists today.
So I think ProfitWell a couple of years ago came out with this Stat when they did ran a study and they found that founders and executives spend 75 percent of their attention on marketing and acquisition, which is just wild to me and also many of you are probably familiar with this stat as well, right?
Which is increasing customer retention rates by 5 percent can increase profits by 25 to 95%. And then more recently, I was actually introduced to a study that ChartMogul conducted just this year with 2, 500 SaaS companies, and they found that those SaaS companies that had, that reached a net revenue retention of 100 percent and above, grow twice as quickly.
as those that don't. If that is not motivating to optimize your post acquisition experience, I don't know what is. So again, to recap just about this market and how tough it is in this market, paying for the privilege to fill a leaky bucket is a fool's errand. There is absolutely money available on the table for you without spending a ton on marketing.
The second shitty reality that you are up against, and this one is going to probably hit a little bit closer to home, is that teens are really struggling right now. So our teens are guessing, What to do and how to grow. And this was a post of mine from a little while ago that really hit.
And I think it probably hit a nerve with a couple of people, but really it's the did it hurt when you paid for a marketing manager expecting a CMO? Most tech startups are not started by founders with a marketing background. And that's not a problem in and of itself, but what it does lead to is that Is sort of problems in the relationship between founding team and later, people that are hired in marketing and growth roles it can lead to unfair, like unfairly high expectations of marketing, as misunderstanding of what marketing is capable of doing. And often lower pay than the rest of the organization that happens. I don't know if any marketers that make more than engineers that are in the sort of mid career level. And then to that point inexperienced and mid career folks that these startups can afford are brought in and they end up with these C suite level sort of growth targets on their head.
And it is just caused this sort of self fulfilling prophecy of either marketers burning out or leadership teams getting and founding teams getting really frustrated with their heads of marketing. And so again, another problem that occurs when there's like a mid career or less experience than needed marketer in place is that oftentimes these marketers, they rarely have the social capital needed not only to get their founders bought in on their ideas, let alone getting alignment across the team to get everybody.
rowing and in the same direction. And that brings me to my next point, which is working cross functionally is really hard. And so there's an HBR study that something you might be familiar with that was run a couple of years ago. This is pre pandemic, but this is absolutely, still something that I'm sure.
Many people experience, maybe you have experienced this, 75 percent of cross functional teams are dysfunctional. And that 75 percent number came from, there were five top reasons. And three of those reasons were lack of alignment, lack of goal clarity, and the inability to meet customers expectations.
And the cross function, the cross functional dysfunction really shows when you look at this other study by A Salesforce that found that only 45 percent of teams were able to pull off a consistent customer experience across departments when it says 79 percent of customers expect a consistent experience across the customer experience.
It's a bit ridiculous, obviously, pretty well, everybody expects a consistent experience, but this 45 percent of teams able to pull that off is just a painful comparison. And all of this is made much, much worse by just the reality of what's going on in the market today. So 59 percent increase in layoffs in tech.
I actually found this number, which was 200, 000 U. S. tech jobs were late cut last year. This number is actually pretty good. higher than that. And these numbers are very similar in 2024. And this, what this does is basically lead the team to be stressed and scared to be wrong, right? Desperate to prove impact and show results in order to get some sort of job security.
And even if your team's jobs are safe, there is still this sort of essence and this sort of feeling of chaos and desperation, right? And pressure to show results, being, scared to be wrong, like I said, desperate to prove our value, short term thinking, prioritizing short term thinking over long term revenue growth.
And this all is giving me like Nerf gun Gia vibes. It's the same situation that we were in. And so again, all of these sort of realities that are impacting our team's ability to make good decisions. I want to think about and help paint a picture of. How do we fix this situation?
And I'm going to break out the sparkly emojis again, because it is so obvious, but alignment, right? Like we need to do a better job of creating alignment for our team so that they can make better decisions so that they can create that better customer experience so that they can see and prove their role in driving revenue at your company.
And I think that SaaS teams are finally starting to figure this out. And I really hope that your team can do this too. If you look at hiring within marketing, you can see that product marketing is having a bit of a heyday. Now, I saw this chart in Emily Kramer's newsletter, which is absolutely incredible.
And even though there's like highs and lows here, obviously, over the past few years, what I'm absolutely loving seeing is that product marketing is actually recovering better than some of the other sort of functions inside of marketing. And what this tells me is that SaaS companies are finally starting to get the memo.
About product marketing. I think this is absolutely excellent news. And I can promise you that this chart looked nothing like this in 2012. Like product marketing probably wasn't even on here unless you were at a big sort of sales enterprise type of org that needed product marketing to, put together sales collateral.
And that was basically how they were utilized. But again, I think that SaaS companies are largely getting the memo that product marketing are very good at This very specific thing, but the problem is that a lot of times product marketing is underutilized. So what is that specific thing that product marketing is uniquely qualified to do?
If you let them, product marketing has the ability, and I don't care if it's somebody with that title, I don't care if it's somebody on the team that thinks about product marketing, but product marketing is a function. If you let it be, this right is these are the people and this is the job of thinking about the customer experience holistically, strategically getting super, super close to the two customers and then product marketing.
Takes this, intelligence about our customers, takes this holistic view and all of this information and context about our customers and shares it with the rest of the organization, brings it back to the team and helps create more alignment around what matters to which customers and when and why it matters.
And this is wildly empowering for teams. So again, we don't need to be guessing. If we have a deeper understanding of our customers and we can have that understanding and have our team also, share that understanding. And it really can be powerful for better handoff points. All of the things that I was talking about at the beginning of this, right?
Prioritization, handoff points, conversations, alignment, shared language, all of those things are, available to us. And at the end of the day, again, we do, your team does not need to be guessing and they can be making better, more strategic decisions about how to grow. And really importantly, see their How their work drives value for customers and for the business.
Number three, shitty reality that is standing in the way of, your growth and hopefully some unlocks for your team. And this is probably my least favorite or most unpopular opinion is that we are just You know, data rich and insights poor at the end of the day. And most people who talk about product growth and marketing your product will tell you that it is all about the data.
And it is very easy to see why, right? It's hard to argue with numbers. And if you mess up in any way, you can point to the data. It's this get out of jail free card or this, security blanket that we can point to, to blame if, things go wrong. Like I was relying on data, and this is particularly true, this security blanket when your team, might be running scared about job security or just, acutely aware of just tech layoffs and that overall sort of pressure that they may be feeling. And being data driven again just relieves us of so much burden.
If we're not sure which messaging is going to resonate, we can put out a landing page and test it. If we're not sure which channels are driving the most amount of traffic, regardless of quality, we can log into GA and run a report, right? If we're unsure of what features are going to drive the most adoption or upgrades, we can put it behind the paywall and split our traffic and wait for the numbers to come in.
And the popularity of product led growth. has definitely exacerbated this problem. And I am all, I am very pro PLG, but even the most data driven experts agree that understanding customers has to come first. So there's this amplitude blog post that Elena Verna wrote, and it was like the four reasons why companies might not, why you might not be ready for PLG.
And Elena doesn't often talk about why companies shouldn't roll out or shouldn't take advantage or leverage PLG. But this article does. And the very, very first one was a warning about needing a solid sustainable and predictable go to market. And then if you don't have that, it is very likely that you, there is a knowledge gap between what actually matters to your customers and what you think matters to your customers.
Now, you might be tempted to try to solve this problem with data, but again, the data cannot tell you who your best customers are or what matters to them. And I have a perfect story to illustrate that example. We've talked about the team Invoice Simple before. This is they're an invoicing tool with hundreds of thousands of users and customers getting thousands of signups every month.
Tons of data, right? Like data for days and also lots of experimentation going on a self professed data factory for sure. And in their situation again, lots of signups, lots of data, too few customers turning into long term customers and that the or sorry, too few signups turning into long term customers.
And the president, when he reached out, phrased it as there's a lack of rigor, which yeah. In hindsight makes me chuckle because to describe that team as a lack of rigor when they had so much data and such this cadence of experimentation, but he wasn't wrong, right? So we knew that these customers, we knew that there was something to learn from these customers and among their customer base, two major groups emerged, two jobs to be done.
There aren't always two, by the way. But for the sake of, illustrating this point and telling the story, there were two dominant jobs to be done that showed up there. Those that were actually pretty easy to please, right? Those that were very happy with the product, they just needed an invoicing tool.
And then the second group were those who were firing an old solution. And they were, most likely using things like docs and spreadsheets and they were wanting a ton of customizations and they wanted very specifically an invoicing solution so they could invoice while they were on the go. So a mobile invoicing solution, they wanted to be able to invoice from their vehicle right there on, on a job site as an example.
And now these were not the highest converting signups and customers overall, but they were, and are the highest LTV. So they learned that it was actually these pickier customers. They're, those that were not as high NPS out of the gate. They were lower NPS, but they were higher LTV overall.
They were pickier customers that they should have been optimizing for. And so they took the time to learn what actually mattered to these customers, and they realized and learned that they'd actually been inflating their data with a poor fit. Customer all along, and it's really easy to see how a team could fall into this trap, like the previous example, right?
So we can see that when we look at our customers in this sort of homogenous blob of numbers and we look at what they're doing in the aggregate, we're looking at what people are doing instead of understanding why they're doing it. We conflate all these customers. And so this insight radically affected how this team.
Thought about their customers what messaging they used how they position themselves against the old way, the product experience during onboarding, their expectations for conversion rates and LTV, right? This dramatically affected obviously the experiments that they're running. And because I'm not saying that there's no room for incremental experimentation, There absolutely is, but you have to go to the source and basically understand the sort of essence of why people are doing what they're doing in order to power a lot of the experimentations, right?
So going to the source can unlock the potential that you might otherwise miss. You might get there, But it will very likely take you a long time because if we're really honest, these incremental changes and incremental experimentation, those arrows don't always go to the right, right? In fact, many experiments fail.
And I think it was also Elena Verna that said, new heads of growth need to expect in their first three months, 97% Failure rate, which just blows my mind that we're okay with this. Like why did we become so comfortable with a 97 percent failure rate when it is not needed, right? So again, the vast majority of people are going to tell you that the answers are in the data, that you should be focusing on your analytics and optimizing your ads and your marketing campaigns and your website tweaking your pricing and your signup flows.
And I'm telling you to do it. Ignore it until you actually know what matters to your amazing customers until that, until you have that information, you can't trust your data. So speaking of data that we can trust on earth, does this customer experience map have to do with data? And so I'm going to explain a little bit about how we connect the dots between, how understanding the why of our customers.
helps us get to data that we can actually use. By getting to understand what's going on that leads our customers to experience this problem that we need to help them solve. What previous solution are they struggling with? What is about the old way that isn't working anymore?
All of that stuff that happens at the beginning, before our customers even know we exist and through the sort of struggle phase, and then getting to the why of. Assuming that they feel as though we understand their pain, then we need to understand things like what's motivating them to give our product a shot.
What convinces them that we might be able to solve their problem and can solve their problem and what trade offs are needed to fire the old way in order to adopt our solution through the evaluation phase. And then in the growth phase, right? Especially if we're a SaaS business, what can they do now that they weren't able to do before?
What does that better life mean for them? What's the impact that it has in their life? And then, what related job to be done or subsequent job to be done? Are they looking to hire for next that we might be able to help them with? And so by understanding this journey, this emotional journey, this sort of documentary level understanding of our customers, we're We can understand what customers are thinking each step of the way, how they're feeling each step of the way, their anxieties, habits, motivations and what they're doing in each step of the way as well.
And I'm referring to here with doing is the direct touch points with our product. Sure. But there's also the indirect actions that our customers are taking outside of our product, outside of, their experience with us in their workflows and adjacent tools, maybe in literally in their environment, so once we know all of that, now we have a way to meaningfully measure our ability to help customers get from one milestone to the next. Now, the product folks in the room might be wondering, what about these KPIs, right? And again, I want to bring it back to this. When we prioritize and optimize our customers reaching their goals, we achieve ours.
And I'm going to, if this all is sounding a little, still a little too kumbaya for you, I have one more story for you. And it is the story of Sparktoro, which some of you might be familiar with, but it is the perfect illustration of these KPIs and this learning about product usage and meaningful product usage.
Again, with them, to tell you the beginning of the story and how they, we started working with them, but we learned from customers. We zeroed in on this ideal customer. And then what we did was we mapped what they said matter to them, to the specific parts of the product, the specific parts of this Sparktoro product, That delivered that value.
And with that understanding, we could reverse engineer their experience because look at all the ways that customers were meaningfully using their product and we could see all of the ways that the current customer experience was out of alignment with what customers, which was with what was actually delivering value to customers.
And that's what we that's when we learned that there was a key feature that had been Transcribed Providing an outsize impact for customers that was just being given and shown to them way too late, right? So it was too easily missed this key feature. And so we shared this insight with the team and knowing how important that was, the team was in a, in a position to be able to highlight that key feature earlier in the customer experience.
And, the team worked on like email onboarding and an onboarding checklist. And let me tell you, they totally understood the assignment and they doubled their free to paid conversion rate. This was a huge unlock for them. So again, these are the sort of the meaningful ways that our customers are interacting with our product.
Give us KPIs that tell us what to do. We have helped our customers all along the way, reach these moments of value. They're super actionable. They impact our day to day, right? The experiences that we're building for our customers and they provide immediate feedback to us on the experiences that we're building.
And these are our leading indicators of success versus these lagging indicators of success. that we know are impacted by those leading indicators. So lagging indicators like revenue growth and free to paid are impacted by our ability to drive more value at these milestones with these KPIs that are tied to actual meaningful product.
Because our team will know what it takes to help customers get from one milestone to the next. And if our KPIs are not helping our team make actionable, make this data actionable, then we're completely wasting our time. This is how we become customer led and data efficient. informed. And this is what unlocks this sort of holy grail of all of this, right?
We'll have internal alignment around what matters to who, when, and why. Okay. So to recap this one, right? Beware of dumb data that might be obscuring your view of what actually matters to your best customers, because imagine how much more powerful your experiments could be. The fourth one and last one is that context that is so missing.
And I framed this as we have no time for shortcuts. So what on earth do I mean by that? This is basically, we are our own worst enemies. We have just an unwillingness, a stubborn unwillingness to take a step back in order to take two steps forward. So if you look at this list of questions, and I really don't want to read this.
So if you're listening to the audio only, please do check out the list on the video. If I asked you these questions about your customers, would you be able to answer them? Things like what was life like before, right? What led your customer to Realize that this wasn't working and on. There's eight questions and there's definitely more.
But if I asked you what the answers to these questions, would you be able to answer them right? And for those who are familiar and with the jobs to be done framework, you'll understand that this is really what we're trying to get to at the essence here is what is the job our customers are hiring us to solve for them.
This is the context and nuance that is so often missing from our current understanding of our customers. But where this gets so much more painful is, what if I asked your team these questions? Would they answer them in the same way? I know we're all familiar with this the blind man and the elephant parable, right?
Where, it's just entirely likely, in fact in our experience it is very highly likely. We see this happen all the time where, maybe the leadership team has a slightly different understanding of who ideal customers are from the marketing team or the product team or the CS or sales team, or even on the leadership team, we've seen time and time again, even among the leadership team, a disagreement or a lack of alignment, or at least clarity on that alignment around who your amazing customers are.
We've spoken to quite literally hundreds of SaaS teams in the past few years, and I can say with confidence that 9 in 10 are guessing. Some know they're guessing, and some don't know they're guessing. But in all of these cases, they're filling gaps in their knowledge with best practices, what worked for some other company, for some other set of customers, and some other product.
And they're relying on oftentimes channel experts as well. And so why are we stuck in this rat race of guessing? How do we get stuck here? You've probably heard about us talk about this before, right? There are a laundry list of excuses on why we can't do customer research. And I understand that it is hard.
Customer research is hard. Really hard. And you may have had terrible experiences in the past on, why customer research is so problematic, right? Shitty questions leading to useless answers, bandwagoning, nothing conclusive, research that took forever and cost tens of thousands and sometimes thousands of dollars.
hundreds of thousands of dollars, and it sat on the shelf to get dusty and die, and was never actually used and leveraged. And we've done, previous podcast episodes all about why people get so stuck here. But really, at the end of the day, the important thing to take away here is that yes, research is hard, but we also get to choose our heart.
And so I just want to ask you to reorient around what Which one of these is harder, right? Which one of these is the shortcut? Lack of customer understanding, right? Tons of money spent on ads, your team making short term only focused on low hanging fruit at the expense of long term high LTV, customers and revenue.
Data that is totally void of context or meeting and operating in hypothesis mode. Is that the shortcut? Or is it Is that the hard that you want to choose? Or do you want to choose this as a shortcut or this as your heart? Yes, research is hard, but you can run just 10 to 12 well run targeted customer, job to be done interviews, identify what your customers actually care about, map the moments of value.
and measure those moments of value and unlock a ridiculous amount of opportunities that are available to you. And I don't want to brag, but we do this in six weeks. You can absolutely do this. Again, actionable insight, right? So it's not just about doing the research. It's not just about talking to customers.
It's about turning it into action and operationalizing it in the ways that I've already described at this point. This is absolutely the shortcut that I want you to remember that don't just associate customer research with the long way of doing things, as long as that customer research is actionable.
actionable. There are a ton of benefits to working in this way. It expedites your decision making. You can make not only quicker decisions, but better decisions about how to grow better alignment across the team, increased ROI from your marketing spend all of these amazing, lovely things. There have been studies done on this as well.
So you don't have to take my word for it. Aberdeen found all these amazing stats, like 54 percent greater return on marketing investment, 18 times faster. Average sales cycle, like on and on the stats are there to back up that when companies conduct an operationalized customer research, your benefits that your business super, super benefits again.
So again the product, it is possible to have an amazing product. Your product might be, I'm just going to assume that your product is amazing. But you also have to layer in an amazing go to market strategy on top of that, and it is absolutely achievable. And so if any of this has resonated with you, what I would say the best sort of next action and next thing to do is pick up the book.
And I know that we've talked about this a lot. But. The book is very short and very practical. We didn't want to write this big, long theoretical book that was going to take you weeks to read. We wrote, we made sure that it was a painstaking process to make sure that it was short so that you could decide very quickly whether or not you think customer led growth could work for you.
So if you're a founder, I would definitely recommend picking up the book. And if you think it might work for you, pass it on to the members of your team. And if you get stuck, you can always reach out to us, of course. And yeah, that's. That's it. That's the recap of the talk. Hopefully that was helpful and something stood out to you there.
There are, yes, it is tough. There are shitty realities standing in your way, but in every one of those cases, there is an antidote. And so hopefully there was something in here of value. And if you get stuck, of course, like I said, you can always reach out.
Intro: 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 forgetthefunnel.com. This is still a new podcast for us. So ratings reviews and subscriptions in your podcast platform of choice, make a huge difference.
See you next time.
