By This is a guest post by Georgiana Laudi and Claire Suellentrop of SaaS educational and growth consultancy Forget the Funnel. They are the co-authors of Forget the Funnel: A Customer-Led Approach for Predictable, Recurring Revenue.
Customer acquisition in 2023 is not like customer acquisition in 2013.
Why?
- The competition is much greater. We now have 16x the competitors we did ten years ago. This means your target audience has 16x more solutions to compare you to. And your existing customers have 16x more alternatives to leave you for. The bar for acquiring new customers and retaining them long term is far higher.
- The uncertain economic times. Combine all this with the state of the economy being so uncertain, and… people are nervous. Companies industry-wide are heeding advice like this from the team at Profitwell: Cut unnecessary spend. Slash your software budgets wherever you can. Extend your runway. Get rid of all “nice to haves.”
As a result, many products are experiencing a simultaneous slowdown in new sales and record-high customer cancellations.
In this environment, with top of funnel conversion more competitive than ever and higher churn rates than ever, even those lucky companies are feeling their subpar positioning, messaging, activation and retention rates catching up with them.
You don’t need to double your top-of-funnel budget to double the impact of traffic to your site.
But we know it’s tempting to throw more money toward ads, introducing outbound sales tactics, doubling down on content production, and experimenting with introducing new channels.
The problem is the cost to acquire a new customer has gone up significantly over the last few years. In some areas like martech and adtech, average customer acquisition costs have nearly doubled, according to ProfitWell Founder Patrick Campbell on a recent episode of Lenny’s podcast.
In turn, more businesses are losing more existing customers than ever before, and paying more than ever before to replace those churned customers with new ones.
One no-brainer first step to solving this problem?
Get inside your best customer’s head.
There’s good news though: the answers you need are locked up inside your customers’ heads.
They know all about:
- what changed inside their organization during the pandemic and during the recession – how their teams shifted and how their job changed.
- what it felt like to experience the frustration of not having a solution like yours.
- what happened that day when they eventually said “F**k this. I need something else.”
- what they did, who they talked to and where they went to find you.
- what stood out to them about your product and led them to choose you over all the other options.
- what value they experienced and what it took to earn their business.
- what they’re able to do now that they weren’t able to do before.
- how they’ve changed and evolved as they’ve been your customer.
Once you understand your customer and the patterns in their journeys to finding, using, and loving your product, it’s time to adapt your messaging and positioning to help facilitate that journey for others.
And one key case study for leveraging customer insights is our recent work with SparkToro. (We think you’ve heard of them.) We helped the SparkToro team use customer insights to overcome a problem with low trial-to-paid conversions.
SparkToro’s team was facing a problem many SaaS teams face: the curse of knowledge.
They knew all the ins-and-outs of what their product was capable of. They knew every single feature: where to find it, what it was for, and how to use it. Like any team building a SaaS, they were experts in their own product.
Unfortunately for almost every SaaS company, there’s a big gap between how the team understands the product, vs. how customers understand it. And it’s hard to read the label when you’re inside the jar.
If you can get inside those best customers’ heads, and figure out what they know, you’ll have everything you need to build a marketing, sales & product growth strategy for your team that actually moves the needle.
So to help the team figure out what their customers actually found most valuable about SparkToro, we ran a survey to their paying, most engaged customers to understand:
- The solutions customers used before SparkToro
- The struggle that pushed them to seek a new solution
- What made them decide to try SparkToro
- Once using SparkToro, what made them feel certain it was for them
- The #1 thing they could do now that they couldn’t do before SparkToro
What customers told us can be summarized into this high-level customer “job statement:”
When I’m exploring or optimizing a marketing channel, give me easy access to useful, compelling insights so I can gain clarity, take action, and impress my stakeholders.
Let’s break it down by each of its three parts:
“When I’m exploring or optimizing a marketing channel…”
This summarizes our learning that customers realized they needed SparkToro in situations where they were either testing out a marketing channel that was new to them or they’d seen early success with a marketing channel and now wanted to double-down to make their investment in that channel more effective.
“Give me easy access to useful, compelling insights…”
This part of the jobs statement summarizes what mattered most to customers as they searched for a solution:
- Easy access to insights. They didn’t have hours and hours to spend digging for data.
- **Useful, compelling They needed information that would help them take action.
“So I can gain clarity, take action, and impress my stakeholders”
This summarizes how they envisioned SparkToro improving their lives: they’d have a clear sense of how to improve their marketing, be able to act, and look smart in front of a boss or client.
How we went from Job statement to measurable results.
With a clear understanding of what customers found most valuable about SparkToro, we could match what customers said was valuable to the features and product attributes that create that value.
We’d learned from research what SparkToro’s best customers valued: ease of use and actionable insights.
We knew their desired outcome: gain the clarity needed to take action and impress their boss or their client.
We knew the exact features that helped them achieve that desired outcome.
But when potential customers got into the product for the first time, many of them weren’t finding and using those features. As a result, they weren’t reaching those critical value moments.
So, with ideal customers’ top “Job to be Done” in mind, we audited the experience of finding and signing up for SparkToro from the customer’s point of view — identifying the friction points, the website structure and copy that didn’t match the words and phrases ideal customers used, the key features within the product that were hard to find, etc.
To make it easier for new users to reach a moment of value, we recommended a series of improvements to the new user onboarding experience, including an in-app checklist to help new users understand how far they’d need to go to get value from SparkToro for the first time. The guided tour ends with the user completing a task that provides direct value to them.
And, guess what? Their free-to-paid conversions increased by 100%.
Where there is specific, and validated customer value to tap into – whether in your marketing or across your customer experience, there is revenue to gain.
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We wrote a book about this process, Forget the Funnel: A Customer-Led Approach for Predictable, Recurring Revenue. It’s a super practical, step by step guide to understanding your customers in order to drive predictable revenue. Grab your own copy (the e-book is .99 starting May 9th through May 14th!) or request bulk order pricing for your team.