Your customers are lying to you… (but here’s how to avoid it)

by maria | Apr 6, 2016 | Uncategorized

EVERYONE IS LYING TO YOU. Big statement? Well, yes. But, think about it.

If you ask your customers if your business idea is good they will lie to you, at least a little (just like your mom did). Why? Because you’re totally missing the point and you’re asking the wrong questions.

So, how can you talk to your customers and understand what they need? You need to learn how to make the right questions to develop better products and new features.

For this reason we have spoken to Rob Fitzpatrick, the author of The Mom Test (a must-read book for all entrepreneurs). Rob gave us this interview to explain how entrepreneurs can validate their ideas and how they can get the most out of customer feedback in order to build great products, that people want.

Check out our next Masterclass on Marketing with David Alston, considered by Forbes as one of the top CMO’s in Social Media.

How should you validate your business idea by talking to customers? Can you give an example from your own experience, a product you tested or a business idea?

Truth is, you need to talk to your customers and ask the right questions. To give you an example, there’s was a product that I wanted to build for investors to manage their deal-flows. We all know that investors get a lot of emails and it’s difficult for them to manage it all. So, I thought of building a product for investors to solve this issue. When I asked investors how many emails they received and how they managed to reply – they all had that problem. However, when I got into detail, I found out something else. One of the investors I talked to told me, ‘sure, we have a huge problem with that’ but, when I asked him how he was solving it, he explained that the emails would go through their junior associates and they would put a post it on the wall if it was interesting – if you had contacted that person already after that they would just take the post-it from the wall. I looked at him and said ‘wow, this looks pretty effective’ and he replied ‘yeah, actually now that I look at it, it is really effective’. At that point, I realised that my business idea wasn’t what I hoped it to be.  

When you choose to build your own startup you always need to validate your idea and your assumptions with potential customers. Being an entrepreneur is hard and if you build something that’s not what people want, you’re just gonna waste a lot of time and money.

In your book, The Mom Test, you say that the most important thing is to listen, but I how do you get your customer to talk more about it?  

You need to take it casually. This is just a normal conversation. Don’t try to sell something because people tend to get defensive when you try to sell them something. Just casually talk to them. This is a conversation about people’s lives and their problems and if there’s one thing people love, is talking about their problems. And don’t see this necessarily as an interview. Take the opportunity to talk to people in events such as meet-ups, conferences, talks, etc. They won’t even realise they’re being interviewed because it will all sound natural. Just give them a plausible reason, a good excuse like “Hey I’m building my own business and I want to know what you think”.   

I’ve read recently an interview on First Round Review with the VP of Product for Twitter saying that you need to have at least 30 meetings with customers in order to build a good product. How many people should you really talk to?

It’s definitely not a matter of volume. In my opinion, you should stop whenever you start hearing the same thing over and over again, coming from different people. In some markets and segments this happen very quickly but in more complex markets it might take a bit longer.

And what do you think about user testing? How can you get it right?

User testing is great to test your product and usability, but you just need to make sure the people who are testing are really passionate about and care about what you’re building. These people should be your potential customers, those who get truly excited about your business.  Don’t just user test with random people to make sure your product works, test with real potential customers. And then, observe and look for emotional reactions like “wow this is amazing”. Record it and write everything down so that you can look at it later.

What about focus groups? A lot of companies do that.

Hmm, I don’t think it’s useful at all. People act weird when they’re in groups so you’re probably getting the wrong feedback because they’ll influence themselves.

In your book you mention that startups need to focus in customer segments, but how do you chose the right one and how do you know you’ve made the right choice?

It’s always a tough choice… But you need to focus. Everyone tells you to focus, your mentors, investors, etc. So, just go ahead and listen because that’s really good advice. You should start small and then expand into your bigger vision. This is what entrepreneurs do, they balance themselves from where they’re starting to where they’re going. To choose your segment, you need to look for the group of people that get more excited with what you’re building, those who understand the true value of it. If they really need it, then you just have to make sure you build a good product for them to use.

What about customer feedback? When a customer wants to have more features, how can you tell what’s really important?

Actually, I’ve changed my mind about this. Before, I used to think that it was a terrible idea to add features upon a customer request, but I changed my mind. All you gotta do is understand their motivation and if that feature makes sense. A company I know called resin.io does this pretty well. Every time they get a customer requesting for a feature they the customer 3 important questions: Why do you want this? What are you currently using to solve this problem? How often would you use it? Depending on the answers, they decide to create the feature or not.

For startups who are at a growth stage and who have grown their teams, how can you keep up this customer development test?

There are many ways to do it. One of the best examples I know, is from a company called Songkick. They would throw really cool parties with their customers. They have good djs and drinks in their office and then reached to people to ask for feedback. So, you would be in this really cool party and then you would come to say and say: ‘can you just quickly come over here and check out the new version we’ve built?’. They would then record these user testing sessions so that the product team could watch it later on.

P.S.: Get your ticket for our next Masterclass on Marketing with David Alston (May-23) and learn from one of the best CMO’s in social media, according to Forbes.

Inside Sales: Why You Need to Explain Your Product to Your Grandma Before Talking to Anyone Else

by maria | Apr 6, 2016 | Uncategorized

I know this sounds weird. Explaining your product to your grandma? What? Every time my grandparents ask me what is this thing that I do for a living, I find it almost impossible to explain it to them. So, I couldn’t even imagine what it would be like to explain them the complexities of a big data or SaaS startup… 

However, according to Adi Azaria, an inside sales evangelist and co-founder of Sisense who is joining us next Tuesday for a Masterclass at Beta-i on Inside Sales, “if your grandma understands your product, everyone else will.” What truly matters is for your message to be clear and short, and you should do this before talking to customers, as this is key for any sales pitch.

But, the sales tips and advice don’t end here… We spoke to Adi Azaria earlier this week to talk about how entrepreneurs can perfect their sales pitch and process, in order to close more and more customers (and not just pitch to your lovely grandma).

Getting the message right in sales

Besides talking to your grandma, you need to talk your customers, test your message and adapt accordingly.

“The key here is to always be relevant, always have a context” says Adi. Understand who you’re talking to. Do your research and understand who your potential customer is before contacting them. “With which companies do they work with? What are their current challenges? Just don’t be a stalker, if you tell them you know where they live that’s just creepy”.

But how do you know what’s going wrong with your message? How do you improve it? Look at metrics  before making any decision.

Adi recommends to keep track of Open Rates, and to do A/B testing before sending a mass email to make sure you’re sending the best combination to more people. If you’re Open Rates are low, you probably need to change your email subject.

To understand how your message is doing in terms of engagement, look at Click Through Rates. “You should add 1 or 2 links in the email, to make sure you have a call to action and then understand which ones are converting.”

Also, as one last tip, try to add something unusual to the email, something out of the ordinary. “This creates attention, so don’t be afraid to test. People receive thousands of emails every day, you just gotta stand-out from the crowd. Add a funny picture, things that nobody else is doing. It is a risk of course, but that’s what the startup life is all about, taking risks.”  

Timing and transparency

Nonetheless, sales is really about timing, transparency and creating a unique experience.

Adi gave us a really great example from a big customer that they closed at Sisense, going through all these steps. The company he mentioned, registered directly on their website and 20 seconds later, even before downloading the free trial, they got a call from one of Sisense’s sales reps. “You know that term to punch or not to punch? Well, in sales, just like in boxing, you need to punch as soon as you can”. And this is exactly what they did at Sisense because “someone who just registered on your website is more open to receiving your call simply because it’s the right context”.

But, how did this potential customer react? “When we called him he said: Oh my god, I didn’t even have time to click on download and you already called… And you know what we replied? We said: Yes, we are fast but our product is even faster – and in that moment we really caught his attention ”. Sisense ended up closing that inbound lead, of course, but the story doesn’t here…  

Later on, that same company was struggling because they had a lot of data in different places. Because of this, they started experiencing slow-downs, which affected their competitiveness, putting Sisense in a difficult position. However, according to Adi, because Sisense had a transparent process from the beginning, that worked much better. “They told us they were having problems and we called right away. You need to tell your customers about the whole process like, we’re gonna schedule a meeting to start with the demo and tell you all about pricing, then if you like what you see we’ll start with the proof of concept, after that we’ll discuss if the annual fee makes more sense for you, etc.” In other words, if you guide your customers through the whole process and prove them that they can have any kind of question and that you can answer pretty quickly, you’re on the right track.

Adi really emphasises the fact that you’re not just selling a product, it’s all about creating an experience. “If you show your product to your customer they won’t really care, but, if you show the value of your product and say that by using it they will save time and money, that’s a whole different story”. In this case, Sisense saved this particular customer 200 million dollars, in just 2 weeks. Impressive right? “They just identified issues that they couldn’t before. Nobody can say no to saving 200 million dollars. When it comes to sales, we don’t really sell the product, we sell the experience. It’s your data, your mindset, we’re just giving you a tool.”

In the end, it’s not just about closing leads but also keeping them. “If they’re not happy with the whole process, if you don’t pay close attention to your customers, they will never renew their contracts.” In other words, you need to provide a smooth on-boarding and care for your customers and their problems.  

P.S.: Join us for Adi Azaria’s Masterclass next Tuesday (12th of April) at Beta-i. Get your ticket right now.