What you will learn?
So I like to say growth is what happens between bottlenecks. So, you know people sometimes hope that growth is this binary thing that you find it and then you’re good to go. But actually what you’re going to do is you’re going to grow and then you’re going to hit a plateau and there’s something that you need to fix and then you’re going to fix that and then you’re going to grow again.
And so I wanted to focus on a framework that I wrote about in The Lean Entrepreneur that gives us a way to uncover these bottlenecks and then run experiments to figure out how to break through those bottlenecks so that then we grow again.
Now, how does this relate to being at the wrong conference? Well, all of the tactics in the world don’t work if you’re thinking about, how do I hit exponential growth if you don’t have some fundamental things in place. So I thought I would describe some of those things and then all of that stuff that you’ve been learning the last couple of days should really get you going.
So this framework, seven states that a customer goes through from first becoming aware of a product or service to becoming passionate about it. So yeah, some of this is marketing, some of its not marketing. Some of it’s product. Some of it is brand that I’ll talk about.
And so part of the problems that we have often times in our businesses is that we’re siloed into departments and everybody does customer journeys now. But it’s really one journey and so the woman on the panel beforehand, the way she’s now formed a team so that your cross-functional that you can have somebody that’s watching the whole journey is how you’re able to uncover the correct bottleneck.
So for each one of these states, what one wants to do is hypothesize what is the behavior that I see that indicates where the customer is in the journey? What is the behavior that I can see that represents they’ve passed into one of these particular states? So maybe I don’t know yet. But I’m going to hypothesize and then I’m going to run some experiments to figure out what are the activities that I must do to get the customer to do that behavior.
Wow. God, I make it sound so easy. It’s hard. It’s hard. But the key is how do we measure the behavior? So we again we tend to measure activities. We measure what we do. What we actually want to measure is the behavior that indicates what state they’re at. Because that’s actually going to tell you whether you’re being successful with specific activities.
So I’m not going to go into too much detail on the framework itself. If you want, you can look it up in the book. If not, you can talk to me about it later. But reason number one that you should have gone to a non-growth customer marketing conference is because you actually don’t know your customer. You think you know your customer, but you’re building your customer around, you’re building your customer personas using huge design thinking or design agencies that create this amalgamation of personas that actually don’t exist in the real world.
I love personas. There’s a customer Zoom tool on my website. You can download for free, but I want you to describe real customer. It has to be somebody that you know, you recognize, that you can go find.
So I was, I was helping this team at a sort of a hackathon. It was like a Lean Startup version of a hackathon and I went on and on around market segmentation for an hour. I like to say you want to segment not around demographics, but people who share the same pain or passion and speak the same language. That’s a market segment. Doesn’t matter how much money they make, doesn’t matter how old they are, their gender, what, do they belong to this group of people that have the same pain or passion?
So I went on and on at this Lean Startup hackathon for an hour teaching people how to do this market segmentation. Afterwards this team raises, “Ugh, we’re having problems.” Okay. What’s your market segment? Who do you think your market segment is? “Everybody that buys clothes from brick-and-mortar stores.” And I’m all like, that is not going there. Oh, that’s not a persona. That’s not a market segment. That’s everybody. What problem do they have? They don’t like to shop and so yeah, what’s the solution? Oh my app. So that was their, that was all the work that they did. They got nowhere.
But so there’s a series of questions that we can ask. Is it all people who shop at brick-and-mortar stores? Is it both men and women? Oh, no, it’s the women. Okay, is it the women that shop at that Santa Monica Boutique that was right down the street because we are in Los Angeles and the women that shop at that Ross Dress for Less? “Oh no, it’s the women at the boutique. They go to the boutique shop.” Okay, so is it all women that go to the boutique? Was it the young woman that’s going out with her friends that night, wants a cocktail dress and also the older woman that still wants to look hip? “Oh no, it’s the younger woman.” Okay. Now you’re going. You could walk down to that Santa Monica Boutique, walk in there, go! We send them out of the building. Go find her. And they did! They walked into the boutique and they found her. It turns out she loves to shop. She’s there with her friends. She’s got plenty of cocktail dresses. She didn’t have the problem. By the end of the weekend, they were focusing on young men that like to dress hip but who hate to shop and so were open to the idea of using an app.
So it’s one of these things that especially in for in a larger business, we’re trying to, we’re trying to capture tens of thousands of people or hundreds of thousands of people and you have to start narrow. You have to be able to prove, you prove that you’re providing value to a small market segment before we start building on top of that. It doesn’t mean you can’t go after those other market segments eventually, but you want to find who is your early adopter, find the people that are most passionate or the most in pain. Prove that you can provide value to them and you’re providing value all across that journey. It’s not just the product. Now that gives you a foundation to build on top of.
So there was an entrepreneur in Madison that I was helping one time. I don’t know why all my examples are fashion apps. You wouldn’t think that looking at me. But there’s, this kid was building an app where you would choose one article of clothing and hit a shuffle button and it would complete their wardrobe for you.
And so I said, well, how can I help you? What’s the number one thing that you need? And he said, “I need a thousand customers.” Okay needs growth marketing. How many do you have? “None.” You don’t need a thousand, you need one. Go outside that building right now. Go find one person on the street, tune in with people in Downtown Madison. Find one person willing to click that shuffle button. Got to start small to go big.
So reason number two. Yeah, your brand promise is BS. There’s no such thing as a brand promise. There’s no such thing as having a relationship with a brand. The whole brand thing is changed. United Airlines’ brand is not “Fly the friendly skies.” It’s not. The CEO of a clothing company that says ugly people shouldn’t wear my clothes. Their brand is not their tagline. It’s not their color palette. It’s not the website URL. Customers own half of our brands these days. With social media, review sites, our customers are so intelligent, so smart, and they’ll hop from one brand to another brand. There’s not the same loyalty that that some of us grew up with. It used to be, you know, your mom washed clothes with Tide, you know, so did the kids when they grew up. It’s not that way anymore.
Your brand is the relationship that you have. It’s not that somebody has a relationship with the brand. The brand is the relationship. And if you don’t keep that relationship positive and fresh, then you’ve got no brand. You’ve got a lousy brand. I guess you always have a brand, it’s whether you have a good one or a bad one.
But so in my framework, to me, the brand appears in the Intrigue state. So the second state, you’ve done your marketing. They are aware of you. You’ve acquired them into your funnel and now you have to make them intrigued.
So you have to give them two parts in your messaging in my opinion. The first is you have to make a utility promise. It’s not a brand promise. It’s I will do X. I will fix this problem with this product. You have to fulfill that promise. If you don’t fulfill that promise, you don’t have a company.
The second part of it is kind of more of the fluffy stuff, which is, what’s the aspiration? What is the impact I’m having on my customer by solving that problem? Maybe it’s a journey. Maybe we’re going to go on a journey together. Maybe it’s an aspiration. How does this person feel after solving a problem or being able to exercise their passion?
So I’ll get to, get a, in the passion a little bit more as we reach that framework state, but I want you to keep in mind that you’re intrigued. You’re getting somebody, you have to speak to them and you have to promise them the problem that you’re going to solve or the passion you’re going to address and then you have to have them join some journey or there’s some aspirational component that you have to also message to them.
It’s interesting, Airbnb, I think, is a great example because it’s pretty obvious what they sell, right? You’re getting a place to stay. Hopefully it’s less expensive than a hotel room. But from the very beginning, the persona, the market they were going after were corporate travelers that wanted to have an experience when they traveled. They wanted to have a local’s experience. And so everything in their messaging is all about going and traveling somewhere and having a local’s experience. And it’s, you know, it’s front and center. Your home no matter where you go or something like that. So it exemplifies the persona, it also has the promise about finding a place to stay and it’s less expensive and it’s also this aspirational component. You’re going to feel more fulfilled. You’re going to have these experiences when you travel.
Reason number three is we’re trying to be a bot. We’re trying to automate everything before we’re actually having that human connection, before we’re building that relationship. So you should only automate what’s already proven to work. And the best way to figure out if something works in terms of marketing or selling is to do it in person. Do a human to human relationship and see what messaging works. Understand what obstacles you have. You don’t even know about your obstacles when you’re writing code. When you’re automating a marketing tactic, you need to understand what are the things that I have to overcome before I write it down, right?
There was an entrepreneur in Australia that I was helping and he was selling some software tool to restaurants. And so he needed to talk to the restaurant manager and he was doing it through Facebook. He was like, all of his marketing was in Facebook. I’m all like, well, what’s the use? What’s the scenario where a restaurant manager is on Facebook and is going to go and check out your Facebook page and figure out that that’s how he’s going to buy software for his, right? I didn’t get it, and he was like, “Oh well my.” You gotta get on the phone. You gotta call these people. You gotta go meet him in person. He’s like, “Oh no, my investors say that’s not scalable.” And I’m, what’s not scalable is you having no customers. So it’s just funny how we think that way and I’m all for automating, but learn how to do it first, right? So figure out what is the activity that drives the behavior that I need to do. And now, how do I automate that?
And matter of fact, what I do in my company is the first step of automation is actually handing it off to people that are executors, right? So inside today’s crazy marketing environment volatile markets and crazy customers and all the rest is I’m going to always be doing this balance between searching and executing. So this is, I teach this how to do this to large enterprises who are stuck in execution mode.
So searching mode is really where you hear other people talking about running experiments. So getting empathy, running experiments, figuring out what works. Inside your own work, it’s sort of the same thing. You should, there’s the execution side of the, what you do that is based upon what has been proven to work and then there’s a search. What else can I be doing that will give me a big boost up, that’ll overcome an obstacle? And what I do and what I want my managers to do is, they’re in search mode, they figure out what works and then they pass it off to the executors. So the execution engine inside your organization’s should be always operating on stuff that’s already been proven to work. And automation, actually writing the code, is just another step of automation in that process. So the search person, then the execution team, refine it, and then as much as possible, automate it. And that, hopefully that locks in the growth longer than the not.
This one I always get like such mean tweets back when I tweet something about like marketing does not cure product problems. It’s funny to me that entrepreneurs just love this idea that if I build more features and get more eyeballs to look at those features, that magically product market fit happens. And what’s crazy is it’s almost opposite of that. It’s fewer eyeballs on the right features is what lays the foundation for growth.
So I don’t even want my product people to build a new feature unless they’ve got a hypothesis about what that’s going to do for the company. And it’s the same thing with marketing activities. People should not be doing marketing activities without a clear hypothesis. A stake in the ground. If I do X, Y percentage of customers will behave in way Z and I measure Z. I don’t even want to see an activity suggested unless there’s a hypothesis around it and we have a way to measure it.
And so when it comes to the product, if you blow up your acquisition marketing and you nail, you optimize your funnel and nobody likes your product, what have you done? Nothing. Maybe burn bridges to all of those customers that actually responded to your great marketing.
So we have to have a solid product. We have to at least have fulfilled that utility promise that made intrigue. So maybe you haven’t figured out all of the aspirational components yet. But you have to at least be able to fulfill the promise for that market segment that you made in the intrigue state. And so again when we measure this, what is the behavior that a customer does that indicates that they’re satisfied with the product? That they’ve gotten the value out of it that we promised to them?
So if it’s a SaaS product, it could be that they log on, upload a video and share it with 10 or their friends. Specific behavior. It’s not downloads. It’s not website hits. It’s not even number of counts created. It’s not how many times people have logged in. What are they actually doing to retrieve the value that you promised for them? Because that is your, that’s your core. That’s your foundation for growth is what are they actually doing to retrieve the value that you’ve promised for them? And then that experience right there is what you got to get to as many of your customers in your market segment as possible.
So solid entrepreneurs will actually move that feature set up to the very beginning of the product experience. That’s the first thing. Facebook after they already had several hundred million users combed through web logs, if you can believe it. Those horrible multi megabyte log text files. And they’re combing through those log files, a team of growth marketers, trying to figure out what was the behavior that indicated that the customer new customer would most likely become satisfied. And so one of the little nuggets they found is that new users that had 10 friends within the first 5 days are most likely to become long-term satisfied customers. So it’s what they optimized for is to get those people 10, get every new user 10 friends within a week.
So there’s little nuggets inside of your products or services that maybe indicate that same thing. But the bottom line is that we need to be able to measure the behavior of what makes people satisfied and then that’s what we want to market and that’s what we want to push forward in the experience. So we have to understand it before we’re going to go out and push it out to the world.
So the last state in the framework is passionate. And what’s funny to me about this is that, it might be your customers love you, and you don’t know because you’re not measuring it. And it might be that you love your customer, but your customer doesn’t know.
So passion is this funny thing about products. So there was an entrepreneur that I’m helping in Toronto and he makes a music app, runs on the iPad. His utility promise to me was, is that if my daughter uses the app, she’ll practice her music lessons more often. I’m thinking that’s pretty cool. I pay for my daughter to take singing lessons. So if she actually practiced more that would be that would be awesome.
I said, I asked him, why are you building this app? He goes, “To save parents money.” I was like, that doesn’t, that doesn’t feel right. I’m paying for music lessons. I would pay for the app. I, well, why are you saving me money? I go, no, why? What’s driven you? Why are you the guy to build this? He’s like, “Oh because I’m a musician.” I say, yeah that sounds better. What about being a musician? “Oh, I want kids to grow up to love music like I do.” And I said, yeah me too. That’s actually why I pay for music lessons for my kid. I want her to grow up love music.
He can’t promise that. He can’t promise my daughter’s going to. I can’t promise that. But that’s a journey we can go on together. Right? So this is that aspirational component of it. If the entrepreneur and my daughter and I, we use the app and practice music more, hopefully she grows up to love music. I’m willing to bet on that. I’m willing to go take that journey.
So that’s passion. It hasn’t it hasn’t even been delivered yet. But it’s what creates that, listen to that guy makes an iPad release of the product that is buggy, I don’t leave. I actually, I tell him I go, yeah, there’s some problems with this app. Let’s get this fixed, right? It builds that relationship.
So passion, you know a lot of entrepreneurs think the passion comes from the product itself and sometimes that’s true. I love my iPhone or at least I used to I’m kind of tired of it, but I loved my iPhone. And so there’s, sometimes the user experience is so over-the-top amazing that you are passionate because of the product itself. But more often than not, in my opinion, it’s something else. It’s something else inside that business model.
And so it’s the responsibility of a team that’s growing a product to understand how do we create passion around this? And then maybe it’s not your job. Maybe it’s, you got to get somebody else in there because it could be that you know, you give shoes to people that can’t afford shoes. It could be that you give eye surgery, cataracts or glaucoma to people who buy your sunglasses. It could be that you go green. It could be that you reduce your carbon footprint. It could be that you discover this aspirational journey that you go on.
Method, the soap company. Who can disrupt soap? It’s freaking soap. Oh, well, let’s put it in a package where housewives want to put the soap on top of the counter instead of underneath the counter. It’s packaging. It’s distribution. Nobody’s passionate about buying shoes online. Tony Hsieh’s Delivering Happiness, right? It’s the customer service.
So where else inside your business model can you provide value other than the utility value that your product provides? And of course as growth marketers, we all know why we have to have passionate customers, right? Because the behavior of a passionate customer is that they put new customers into the top of your awareness funnel without you spending a dime on marketing. And when you discover that seventh state of that framework, of that journey that the customer goes on, now you’re ready for growth. Now you spend money on your marketing programs and you’re creating more than one, right? You’re buying one customer, but you’re creating more than that one because that one is going to become passionate and that passionate person is going to put somebody else in the top of your, that’s where you get exponential growth. So you have to track the journey all the way through. And hopefully you have a cross-functional team that can tackle some of those things that are maybe not directly your responsibility.
So again, we get back to the framework for startups and corporate innovators alike. They don’t really know yet what value that they’re creating. So we have to go discover that. We don’t know for whom so we have to figure out these market segments. We’re going to go small to go big. Execution, the roadmap on how to do that has not been created yet. So we can use this framework in order to create the roadmap. Hypothesizing the behavior that we expect a customer to see, what is the activity that gets the customer to behave that way and how am I going to measure it? It’s literally putting a stake in the ground. By putting a stake in the ground, I’m going to get 75% of the people that I reach out to you to behave in this way. It allows you to measure whether you feel like it’s successful or not. It could be that the metric’s wrong the first time out. But as you get better at it, you’re going to dial into what are, what are the numbers should look like.
So these aren’t real numbers, but this is my business. So again, I teach large enterprises how to act like startups. And so I do a lot of content marketing which is another way to create value and create passion, right, is great content marketing. People that share your stuff even if they’re not customers. We literally had this happen where people big on our content marketing move from one company to another. In their second company is where they hired us.
So I do keynotes. I can do content marketing. We do tons of LinkedIn Outreach. My intrigued is basically the messaging that I have on my website and now I’m going to measure whether they’re intrigued or not because they’re going to download my lead magnet and I’m going to measure that by my acquisition method right? So it’s number of downloads per LinkedIn blast or per keynote. I know that they trust me that I’m the right company to deliver the product if they ask for a proposal. Convinced is one of the easier things to measure because they hopefully pay you money. And then there’s this funky state that I talked about which is hopeful and so that’s sort of like they hope that they’ve made the right decision, kind of. Think about it that way.
So it’s you know, you have a mobile app, good mobile app developers are going to point to the two or three things that you need to try right away because you need to get them from, oh, I’m glad I bought it to actually using the product. Often times we’re trying to change people’s behavior. In the radio, there’s an adage that says that you have to like Howard Stern says this all the time not that I listen to Howard Stern but it’s he would say you have to listen to the program every day for two weeks before you get it. And so he’s there the radio announcer or hosts are on air saying you got to listen to this program every day for two weeks and it’s the same thing with product. We’re trying to change behavior. And so you got to get them in to try the value a bunch of days in a row in order to get them to get there.
So the other example I like to give for hopeful is you buy a kid a big electronic car for Christmas, all right before the holidays. They unwrapped and they’re like, oh, yeah, this is so cool. This is awesome. And then you’re like snap. I forgot to buy batteries. You race off to the store to buy batteries. You come back, the car is actually in the corner and he’s in the box going, vroom vroom, this is so much fun. He’s like, it’s why we buy toys stamped batteries included right? It’s to get to try that value as quickly as possible.
So then satisfied is obviously that they’ve gone to multiple of our boot camps. So it’s number of behaviors over a time period. And then passionate is that they act as a customer reference or they do a public case study or give us a testimonial.
So those numbers aren’t real but I can we track all of this and I can look and see, wow, we’ve got like decent people interacting on our website. But number of downloads is really bad. So I’m going to send my team. Go fix that bottleneck. Get us higher quality, qualified people to look at our stuff rather than the clearly I’m I’ve got people on there that are not really in my market segments. So I want to be able to identify where the bottleneck is, put a team on it, go figure it out, run experiments, break through that bottleneck. I should see more money in the bank, right?
Okay. Well, thanks. That’s what I have for you. Wrapping it up here.