Who are the people that can't live without your product? Why is that product a must-have for them? And what is the difference between these must-have users compared to other users for whom it's just a nice-to-have? These questions are at the root of scaling growth. Find your must-have users.
Yet, when planning target markets, it’s human nature to want to go broad. There is a feeling of safety and comfort. “Why, my product has hundreds of uses, for everyone! Let me list the ways…” But one of the great paradoxes of growth is that, in general, the more broadly you define target markets, the less business you actually take in. It literally pays to get more targeted.
Product leaders know they need to tailor their roadmap to customer demand. They base these decisions on market intelligence from the usual sources:
These sources are important, but are often indirect and lagging information, not to mention other biases. For those that just want to appease their boss, this may be enough. What you release next may or may not be successful, but at least you can show that you based your roadmap on sources. But for those that really care about a product that sells and users love, you need to balance this with more direct and predictive sources of intelligence.
It can be encouraging and disappointing all at once if your team has worked hard to generate marketing qualified leads (MQLs) but somehow they just aren’t converting to actual revenue. For SaaS stores, this can look like lots of sign-ups but few actual transactions. In a traditional B2B company, you might see a lot of activity - website visitors, webinar attendees, trade show booth visitors, and even direct requests for a quote - but conversion to sales is low. What’s going on? It can be tempting to point fingers, but this is almost always a system problem more than any particular team's failing. Here’s a checklist to help diagnose.
Most companies are laser-focused on meeting the current quarter's target, with an all-hands-on-deck effort by sales, marketing and product to close the gap by quarter-end. There is usually also a funnel of opps and leads for next quarter. But what about 2 quarters out?
Short-term revenue is the lifeblood of the company - you don't survive very long if you don't make your number. So companies get good at meeting their target quarter-to-quarter. But one day the current quarter does not look good. The funnel is just not there. Maybe you've saturated the market, or there's been a disruption, or maybe you just didn't have enough funnel-generating activity 6 months ago. Now you're in trouble, and no amount of short-term execution can solve it. Don't fall into this trap!
Read any article on product/market fit and it will say "Talk to customers and focus on their problems. It took us 2 years but we found our product/market fit and sold for $X!". One thing? Simple! Talk to customers.
But there's a startling lack of practical guides on how to actually talk to customers to elicit and qualify pain points. And there are so many false pains that you can latch on to in customer conversation if you don't know what you're doing (which may explain why that article invariably says "it took us 2 years to find what customers wanted"). Let's look at the reasons why actually getting to a real customer pain point is so hard, and how to do it right.
"Know your audience". "Understand the buyer." "Be customer-centric." The key to lead generation and growth has been in MBA 101 textbooks since the dawn of time.
These 101 textbooks also say to capture the relevant information about your target buyer in the forma of a persona. But the vast majority of teams don't actually create personas, or use them in the right way.
Ten years ago, as long as you had a great product idea, growing a tech business was straightforward. But today the market has reached a level of noise that even the best products can't cut through. The average person sees 3,000 ads a day. Promotional channels from Google SEO to Facebook to Amazon are saturated and in constant flux. How do you cut through the noise?
Product leaders are inundated with data. SaaS product and website analytics can slice and dice every aspect of the customer journey. I can see that 22% of my customers between the ages of 30 and 40 spent over 3.2 seconds looking at the new graphic on my website. I know that 16% of freemium users converted to paid in the last month since we added 3 new features.
Quantitative measures like this can point to areas of interest that require investigation and experimentation, but they won't tell you why these are of interest. Qualitative data, ie. talking to people, gives you the why. Qualitative data tells you what was motivating the user when they spent 3.2 seconds looking at your graphic, what problem they were trying to solve. You need both, quantitative and qualitative.
As a product leader, you need customer intelligence to plan your strategy. But the customer data you collect from sales is biased. The data you get from market analysts is indirect. Even the data you collect yourself from customer interviews can be artificial, as customers are all too willing to be positive and tell you what you want to hear.
But there is one undeniable source of raw unfiltered customer intelligence that is too often overlooked - the Customer Success team. The Customer Success team gets customers when they are at their most passionate, emotional, even angry. Where there's emotion, there's usually a real pain point. It's rare to find that sort of honesty elsewhere.