3 Steps to Understanding Customer Needs

3 Steps to Understanding Customer Needs

The core of every business organisation’s mission is to answer customer needs.  In order to do so you must first identify and understand them.

Understanding your customers’ needs is essential but superficial knowledge is not enough to ensure your organisation’s profitability. To achieve product/market fit, the point where you answer needs better than your competitors, you must get to a deeper level of understanding of those needs.

Benefits of understanding customer needs

An added bonus to mastering customer needs (and providing a solution that fulfills them) is that every marketing dollar spent will yield higher returns than those of your competitors, who don’t have the same depth of knowledge.

A deeper level of understanding your customers’ needs will also ensure an overall better customer experience, which we already saw in a previous post on the customer experience journey, leads to higher profitability.

Ok, so now that you are convinced understanding customer needs is in your organisation’s best interest, the question you may be asking is how to go about mastering them.

First you have to identify the needs you will be fulfilling (hint; don’t stop at the needs attached directly to your product/service, also look at the ones surrounding the entire customer experience). Once you have zoomed in on the needs to fulfill, you must not only understand the needs but the whole story around them.[1] This process requires lots of effort, time and knowledge of data gathering techniques. It isn’t as straightforward as it may seem.

As a marketer a huge part of my role, aside from finding the right customers, is to identify and understand their needs. Over the years, I learned that there are three steps to any quest aiming to either identify or understand customers’ needs.

Those steps are; Listen, observe, and empathise

Listen

customer needs - Baker MarketingThe very first thing you should do when you have a business idea is to talk informally with potential customers. This mostly means listen to their answers.   It also helps you figure out who your early adopters are. If it’s not possible for you to talk directly to potential customers, find people who know your potential customers inside out, and talk with them.

Don’t forget to set objectives for your conversation. Examples of conversation objectives are; to see whether the needs you think exist actually do, how they are being filled and the relative importance of those needs. In order to maximise the amount of information you take in, not only do you have to limit how much talking you will do, but you need the proper mindset. Your mind should be open and devoid of as many filters as possible. Always remember that explaining your project in length and your view of the world is just taking time away from achieving your goal. Listen.

On a side note, many of the entrepreneurs I meet are worried that someone will steal their idea before they get a chance to develop it. Unless you have a truly patentable solution (very few are), and potential customers can either beat you to market (they already operate a company in the same field) or spill the beans (to an existing competitor), you have nothing to worry about. Honestly, initial business ideas are very rarely marketable. Even if they were, almost no one wants to put in the blood, sweat, tears and go through the hell that starting a new business entails. Furthermore, even if they did, they’d most likely end up with a completely different business than yours in the end. Lastly if the threat of theft is real, there are still ways to explore the needs of potential corporate customers without spilling your own beans.

Please do not let the fear of someone stealing your business idea prevent you from engaging with potential customers.

Observe

Customer needs - Baker MarketingObservation is essential to identify less obvious needs and understand all pertinent customer needs at a deeper level. Asking potential customers won’t yield the information you seek because people don’t or can’t always tell you the truth.

There are many categories of observation techniques.

 

Natural observation

Natural observation techniques allow you to observe your potential customers while they are naturally fulfilling the needs you want to address. Ideally, without them noticing you too much so their behaviours are not altered.

Such observation experiments will yield huge amounts of customer knowledge. Hence you need to ensure you set observation goals for your experiments. Your observation goals can pertain not only to your subjects’ actions but also their interactions, environments, and the tools they use.

You will most likely need to repeat such experiments many times to take in all the knowledge you will need. Alternatively, you can task multiple people to observe the same situation while giving them different observation goals.

Two of my favorite natural observation techniques are shadowing and A day in the life.[2]

Directed observation

These techniques are associated with a goal of understanding a specific thought process or behaviour in a given circumstance.

They require putting the customer in a specific situation or assigning him, or her, a task and then observing. This can be followed by a question period to help interpret what you observed. It can be done face to face, remotely with cameras or on the web (such as A/B testing).

Third person observation

This technique is used in addition to one of the previous ones where the observer is someone who has a vision of the world that is significantly different from you or anyone in your industry. This technique yields much richer interpretation/insights from the data you collect.

Empathise

Customer needs - Baker MarketingWhenever possible, put yourself in your customers’ shoes or, even better; take the time to get to know some of your favorite customers personally. This will enable a relationship of trust and maybe even friendship (personal bonus for you) to develop over time.

Get involved in activities or causes your customers are passionate about. This will give you an even deeper understanding of their values and what is important to them.

Sharing your customers’ values is a requirement to attract them into your community.  If you are unsure of what I am referring to here, see this previous post on community marketing.

The 360 view of customer needs

Customer needs - Baker MarketingApplying all of these techniques to understand your customers’ needs is required to get a 360 degree view of them. Using many different perspectives to master your customers’ needs will yield rich and actionable information. It will also facilitate innovation in your organisation.

 

Customer Feedback Flow

Customer needs - Baker MarketingStriving to understand customer needs is a continuous process. Set up processes and assign resources in your organisation to make it an integral part of your business activities.

These processes can be as simple as a quick questionnaire you send out on a regular basis, or an automatic feedback one, after a certain task is completed.  Analytics reports, comments on social medias summaries or a managed (live or online) community feedback or observation reports are all valid continuous feedback processes that can yield precious information on your customers’ needs.

Be aware that this feedback is highly valuable to your organisation, if you act on it. Hence, reward your customers adequately (often a simple thank you is enough) for sharing their thoughts and concerns.

Mastering the understanding of customer needs is no small task.  Your rewards for listening, observing and empathising with your customers, will be a tighter product/market fit, greater customer satisfaction and higher profitability.

[1] Needs are always dependant other factors. E.g. The need for a given medicine will be dependant on experiencing specific symptoms at a level that requires relief and not being allergic or prone to adverse effects to said medicine.

[2] The following book describes these techniques : This is Service Design Thinking – M. Stickdorn, J. Schneider et al. – John Wiley & Son

Lean Startup Tools – The Concierge Phase

Lean Startup Tools – The Concierge Phase

 

This is the last of an 8-post series on applying Lean Startup in the various phases of a start-up. In this post we’ll take a look at the tools that will accompany you in your efforts to maintain a lean startup practice in your company during the concierge phase.

Lean Startup Principles and fundamental tools

The tools suggested in this post are but the tip of the iceberg of the tools that exist to help you adhere to the principles of Lean Startup. They will vary according to the specifics of your business model.  A great place to find apps to help you with your productivity is the Slack apps directory. Using thes tools doesn’t mean you are following a Lean Startup approach. You can only do this by putting into practice, on a daily basis, the various principles that underly Lean Startup.

Top Lean Startup Principles:
(Click on the theory to see an example of a book on the topic)

Theory Principles
Lean Production Customer focus; Efficient use of resources; Just in time; small batches;
Customer Development Understand your customers’ needs then develop your product/service; Use continuous feedback from your markets to make decisions (feedback loop)
Design Thinking Have a 360 view of needs, problems, issues; Empathize with your customers before you start designing your product; test multiple prototypes before going to market; transparency of information and process
Agile development Develop in iteration; test your developments with users  before going to the next step; use agile planning tools

 

There are also fundamental tools that come with the Lean Startup approach. These tools are:

  • Management tools:
    • Business model canvas or the Lean Canvas for planning.
    •  Experiment board to guide you with your first experiments.
    • Kanban boards to ensure you are not creating bottlenecks in your production
  • Metrics: Use data to make decisions whenever possible.
  • Innovation accounting:
    • Keeping a log of your experiments
    • Innovation options to calculate the maximum value of your start-up and the associated level of risk.

Here are ideas of tools or types of tools to look for when applying the Lean Startup approach in the concierge phase (last phase) of your start-up.

 

Applying Lean Startup - Concierge Phase - Baker MarketingProduct development tools

If your product is an application or software

Continuous deployment (or delivery for certain markets) espouses most of the Lean Startup principles. It requires a slew of tools. Atlassian offers many of them with apps such as Bitbucket, JIRA  and Bamboo.

If you’re creating a physical product

You may want to look at integrating your suppliers into your corporate Slack, if not already done. In order to do so, you should get the secure ($) version of Slack.

You’ll also want to establish processes that will ensure your marketing/product design and production teams communicate regularly in order to ensure market needs and trends are communicated asap throughout your value chain. Common work tools for these teams and spaces (physical or virtual) where they can easily meet on a daily basis should be available.

 

Applying Lean Startup - Concierge Phase - Baker MarketingMarketing tools

You will want to look into integrating as many of your data sources as possible (Analytics, CRM, Ticketing system, social media feeds, and manual data) into a robust business intelligence platform. One of the better and more agile one out there at this time is TableauQlik and Microsoft BI are also good choices. IBM’s SAS and Watson are better, since they integrate AI elements, but highly likely out of your price range.

If you’re running an on-line business then you need to start looking into an agile and powerful real-time analytics solution. Google, aside from its free version, has a module approach that is neat since you can only get the packages you use.  The entire 360 suite of 7 add-ons is very costly. You’ll need to make sure you get an ROI before investing in it. There are other options such as Clicky that also offers real-time analysis. Clicky integrates with Slack.

Whatever BI or analytics platform you get, the most important part is to ensure you have the resources and processes in place to maximise their returns for your company. Hence it must be part of most everyone’s job description to feed the BI databases on a regular, if not daily, basis.  You’ll also need someone to ensure the data in your system is clean and the analyses are correctly interpreted.

Your experiment logs should be scraped for pertinent market information regularly. They should have their own Slack channel (or section in your intranet).

By the end of the concierge stage, you may be cranking out multiple new products in rapid fire in order to get a larger wallet share of existing customers or to satisfy the needs of new segments. Applications such as LaunchLeap that help you get quick feedback from a large number of users will help you accelerate your experiments.

 

Applying Lean Startup - Concierge Phase - Baker MarketingHR tools and guidelines

If you aren’t outsourcing your recruiting and training then you’ll want to look for tools to make these processes more efficient.

Get a screening tool (with broad mesh) up on your website to reduce the time spent looking at non pertinent resumes.  Make sure your corporate values and culture are also reflected on your website and all your social media content.

Use your FB and LinkedIn corporate pages to get referrals for potential top candidates.

Invest in training video s available 24/7. These online videos make the on boarding process more efficient and transparent.

Encourage inter-employee training and coaching.  Having video, sound and recording capabilities on their computers or laptop will enable employees to share their knowledge with their peers either in real-time or asynchronously.

Have as few employee guidelines as possible. When they are absolutely necessary, keep them as broad as possible. Nothing kills creativity and initiative as well as guidelines. Just remember not to substitute good management with guidelines and you should be fine.

 

Applying Lean Startup - Concierge Phase - Baker MarketingFinancial tools

Finance is not my area of expertise so I won’t venture into suggesting accounting apps or platforms. What you will want to look for in your accounting system to support your Lean Startup approach are the following capabilities:

Integrating market information into your sales projections (by segment)

Enabling you to show only the financial data you want to specific categories of employees.

Although you want to remain as transparent as possible with your financial results, your growing staff and eco-system will require you to limit the financial information you share with some of them. If your system doesn’t allow you the flexibility to easily share some of the information with specific employees/partners/suppliers then you may be tempted to only share summarized data on a monthly or quarterly basis.

 

Conclusion

As you have now come to realise throughout this series of posts there is no one way to apply the Lean Startup approach.  There are however wrong ways to go about it. If whatever you are doing goes against or disregards Lean Startup principles, then it’s obviously not Lean Startup. Throwing in buzzwords like MVP and pivots won’t change this.

We also saw a variety of tools used in the practice of Lean Startup. These don’t even represent the tip of the iceberg. They will also become obsolete very soon. Newer and better ones will become available. The important message is to keep looking for tools that will make you more efficient and help you achieve the minimum in MVP.  These tools will also enable you to run experiments in a timeframe that was impossible only a few years ago.

These tools are the reason an iterative, experiment-based approach like Lean Startup is now viable.

Lean Startup is the essence of entrepreneurship. It’s about doing.  It’s about taking only the risks you have to take in order to answer a market need with a product or a service. It’s about having some core competences but mostly about how fast you can learn what is pertinent and apply your learnings. Finally, it’s about discipline, rigor and lots of hard work.

Lean Startup is rarely sexy but then again neither is starting and growing a successful business.

Applying Lean Startup in the concierge phase of your start-up

Applying Lean Startup in the concierge phase of your start-up

This will be the second to last post of a series of how to apply the Lean Startup approach to a new business.

Until now in this series on applying Lean Startup, we started with an introduction, then looked at the ideation phase, the discovery phase and the pre-sell phase (also known as the Death Valley).

 

Congratulations!

Applying Lean Startup in the concierge phase - Baker Marketing Either because you have made it this far in reading this series or, even more important, you have successfully crossed the Death Valley (pre-sell phase) and came out of it with the holy grail of a product/market fit (when the hockey blade becomes the stick on your revenue chart).

You now find yourself in the concierge phase.

 

What is the concierge phase

The boxes below presents a very high level summary of usual situations your start-up can expect in the concierge phase.

Product

Application

  • Your core features all work pretty well
  • You created your first (official) road map to additional features

Physical product

  • If you are outsourcing, you are either looking at optimizing your suppliers or taking steps to bring production in-house
  • If you are manufacturing in–house, you are looking at getting decent equipment to start producing at a larger scale

Market

  • You are looking at more efficient tools to learn about your customers, markets, and environments
  • You are exploring new customer segments
  • You are aggressively growing your initial markets
  • You are constantly reassessing the total size of your markets
  • If you are an innovator in your market; you are keeping an eye out for the chasm (1)

[1] The saturation of the early adopters market and passage to the early majority  (re. The innovation adoption curve)

 

Processes

  • You are feeling the need to put processes down on paper so your teams has a more homogenous approach
  • You realise you need a lot of processes and procedures but don’t want to bog down your agility

HR

  • You are on boarding team members at a rapid rate
  • Job definitions are getting more specialised
  • Your core team is trying to find a fit with their new, more limited, roles in the company (spoiler alert – some won’t adjust)
  • Your core team feels as though they spend more time coaching new resources than getting work done

 

Finance

  • Money is coming in at a decent rate from sales
  • Labour costs need to be controlled as they are growing faster than your sales at times
  • Extra office space and equipment mean increasing your bank margin or taking out (mostly) short term loans
  • Investors are now calling you and want to hear about your scaling strategy

 

Too busy for Lean Startup

 

Applying Lean Startup in the concierge phase - Baker MarketingYou are now running a small business that is experiencing the fastest growth rate it ever will, short of an acquisition.

It is easy and oh so tempting to abandon the build, measure, learn approach. After all, you know your initial market’s needs very well by now and you are crazy busy fulfilling orders, fixing issues and well, running a company.

It is a trap most entrepreneurs will fall into. Until their growth rate slows down, stalls and starts to plummet. The dirty secret of the concierge phase is that most companies’ revenues during this period don’t look like a straight hockey stick handle. That straight upward slope is just the trend of your revenues. The revenues themselves go up and down regularly. If you want your slope average to be positive and steep, you need to minimise those downs. Most times these down periods will happen for the following reasons:

  • Your customer needs are changing due to a shift in the market (often due to a new competitor)
  • You experience process or production failures
  • Your initial early adopters market is getting saturated and you didn’t react quickly enough to open new markets
  • Your early adopters markets are saturated and you haven’t figured out how to sell to the early majority customers.

Continuing to apply the Lean Startup approach during your concierge phase will ensure that any new features or internal processes will answer the needs of your customers (external and internal). It will also ensure that market changes are captured and acted upon. This does mean that many of your processes must incoporate Lean Startup elements in them. In some cases, it can also mean that the you will need the build, measure and learn processes themselves to be written down and into job descriptions.

Incorporating Lean Startup in your processes is the key to keeping your company innovative and agile as it grows.

Your product, processes, marketing and overall strategy will adapt continuously. When you need to cross the chasm to reach your early adopters, the Lean Startup approach will be your natural bridge to the other side.

In our next and final post of this series, we’ll take a look at the tools that are most useful in the concierge phase.

[1] The saturation of the early adopters market and passage to the early majority  (re. The innovation adoption curve)

How to identify a good community marketing partner

How to identify a good community marketing partner

In a previous post we looked at community marketing. As a reminder, community marketing is a set of tactics used to involve your customers and/or prospect customers (subsets or all of them) and their network with your organisation.

Community marketing partner- Baker MarketingCommunity Marketing Partnerships

One of the foundations of community marketing is partnering with other organisations. These partnerships are used to leverage all of your marketing and promotional activities to your potential customers. These partnerships can be with your suppliers, clients, customers (either corporate customers or the companies your customers own), or non-profit organisations.

The previous post also showed that, aside from being profitable when done right, community marketing is a great way to:

  • Increase positive brand association
  • Achieve community leadership
  • Obtain great insights in your customers needs
  • Drive innovation
  • Reduce your marketing costs
  • Get free advertising
  • Get you and your team to feel great about your job

So yes, community marketing sounds great, well on paper at least. In reality it requires the right partners in order to achieve a return on your investments.

The question then becomes:

Finding a business partner - Baker marketingHow do I know what the right community marketing partner looks like?

Like any other business partnership, there is no ‘’one-size fits all’’ answer to this question. Furthermore, time can transform an excellent community marketing partner into a negative ROI partner. Hence keeping track of the costs, revenues and benefits associated with a partnership is essential.

In order to identify criteria to help find a good community marketing partner for your company I will use two sources. The first are the studies done by non profit organisations that have applied community marketing strategies for decades to achieve their objectives.  The second will be the various community marketing experiences I have been a part of or observed in the last few years.

The following are some of the most important elements you have to look for when searching for a community marketing partner.

Community Marketing - Baker MarketingShared values

This criterion is by far the most important element to look for when searching for a new community marketing partner.

Your most important corporate values must be shared with your partners. Otherwise something will inevitably go very wrong during the course of your partnership. Usually, issues will occur sooner rather than later.

An example of this was a large food blog that strongly valued leaving the smallest carbon footprint possible. Most of their blog posts transpired this value. Their hosting provider, a community marketing partner of the blog, expanded into a new facility that used significantly more energy than the previous one they were located in. When the hosting company announced on social media it had no intention to undertake any projects to minimize their carbon footprint, it created a strong backlash in the blog readers’ community. Readership dropped more than 25% in the following 3 months. No other events could account for this exodus.

Eventually the blog owners not only lost a community partner but had to find another hosting provider. This project was of course very costly and could have been avoided had the hosting partner shared similar values.

This example brings about another lesson that was learned. Some of your values can generate a significantly higher cost structure for your company. Make certain you are ready to take on those costs before trumpeting your values to your customers.

Community Marketing - Baker marketingA committed partner

Just as any other type of partnership, your partner must be committed to the relationship. In a community marketing partner, this translates into having resources dedicated to managing the partnership and the joint projects.

Partners who also dedicate resources to measuring the outcomes of the partnership will often be easier to work with. The data they accumulated will generally lead to rational discussions with clear demands.

Market segments - Baker MarketingYou are going after the same customer segments

The closer, the match between the customers your business is aiming at to the ones your partners aim at, the better.

The whole idea of community marketing is to gain greater exposure, at a lower cost, to new potential customers. Hence, it would be worthless in that regard to partner with companies that don’t address your target markets.

Also, the closer or more complementary the needs they address to the ones you do in your markets, the better the synergy you will get out of a partnership.

Hence, if your product/service fills a need that is created by a partner’s product/service or creates a need that can be fulfilled by a partner, the partnership has the potential to provide maximum ROI.

An example for our food blog would be to partner with kitchen appliances or dinnerware companies as well as exercise/health related blogs that share similar values.

Reputation - Baker MarketingA reputation that is at least as good as yours

Community marketing is strongly based on social media presence by the partners. Hence, you will be looking for a partner that is not only adept at managing its own social media presence but one that has a reputation that will not tarnish yours.

Before signing with a new community marketing partner you need to do a thorough review of all of its social media presence. You also need to know who its other partners are and what their reputation is.  The stronger the community your future partner is a part of, the more profitable the partnership can be.

There are many other criteria that are important when choosing a community marketing partner. The previous three are, in my experience, some of the most important ones at the outset of a relationship.

In a future post, we’ll take a look at where to find the best community marketing partners. In the meantime, if you have any questions about community marketing strategy or implementation you are welcome to contact us.

Le marketing des objets connectés : Le marketing de demain?

Le marketing des objets connectés : Le marketing de demain?

Ils deviennent omniprésents dans notre quotidien. Les objets connectés se retrouvent sous forme de gadgets telle la bouteille d’eau intelligente. De façon encore plus fréquente sous forme de bracelets ou maillots de sport qui gardent le compte de nos activités physiques et de notre rythme cardiaque.  Leur point commun; ils amassent  une masse grandissante de données  sur différents aspects de notre quotidien et les transmettent à un serveur.

D’ici 2020, on peut s’attendre à ce que plus de 20 milliards d’objets connectés soient en circulation. Ils généreront des pétaoctets de données ayant la capacité de tracer un portrait de chaque minute de notre quotidien.  Dans leur ensemble, l’analyse de ces données révélera des informations qui permettront aux fabricants d’optimiser leurs produits.  Ce qui fait saliver les analystes marketing encore plus abondamment par contre est l’analyse au niveau de l’individu de ces données.

Connected object marketing- Baker MarketingNombreux analystes, dont ceux de McKinsey,  évoquent une 4ième révolution industrielle.  Ils prévoient une société où tous les produits et services vendus seront personnalisés afin de répondre aux besoins de chaque consommateur. Ce qui implique que le marketing de masse se fera au niveau de l’individu et non d’un segment.

Le message sera personnalisé en fonction du profil de l’individu, de son environnement, du contexte voir même du moment. De toute évidence, il ne sera pas créé par un humain puisque nous n’avons pas la capacité d’assimiler et de traiter une telle quantité de données à la vitesse requise. En ce qui a trait aux divers modes de livraison des messages publicitaires, je vous laisse les imaginer.

En poussant cet exercice de prospective à sa limite on peut même en arriver à la conclusion qu’une intelligence artificielle filtrera les messages publicitaires et ne laissera passer que ceux qui correspondent à nos besoins et désirs conscients voir même inconscients.

Revenons du monde de la science fiction et regardons comment nous effectuons le marketing des objets connectés aujourd’hui en examinant les stratégies du bracelet Fitbit et du thermostat intelligent d’Alphabet (Google), le Nest.

Nest marketing - Baker MarketingOn pourrait penser que Google, champion du big data, serait avant-gardiste dans la commercialisation du Nest. En fait, il n’en est rien. Alphabet a embauché en 2013 Doug Sweeny, ancien VP marketing de Levis (les jeans), afin de commercialiser le Nest.  Non seulement Sweeny ne veut-il pas exploiter les données d’utilisation amassées par Nest dans sa stratégie marketing il opte pour une stratégie des plus traditionnelles pour un produit de grande consommation. Nest focalise depuis les dernières années, quasi uniquement,  à croître son réseau de distribution physique (et non en ligne).  Nest fait peu de publicité dans les médias et n’a aucune stratégie de marketing personalisé.

Quant à Fitbit, cotée en bourse depuis 2015, sa stratégie marketing est beaucoup plus évoluée et exploite, bien que de manière limitée, les données amassées par ses utilisateurs.

Fitbit utFitbit Marketing - Baker Marketingilise ses données pour développer sa gamme de produits qui compte près d’une dizaine de bracelets. Fitbit déploie également des campagnes marketing hautement personnalisées en adaptant le contenu de chaque courriel qu’elle envoie à ses  millions de clients.

De plus, Fitbit inclut dans sa stratégie le marketing communautaire. Outre sa communauté Facebook principale, avec près de 1.5 million de j’aime, Fitbit anime également des communautés pour chacun de ses produits sur de multiples plateformes de médias sociaux. Fitbit commandite aussi de nombreux événements sportifs et créé du contenu numérique destiné à être rediffusé par ses utilisateurs.

Il y a plusieurs autres stratégies marketing particulièrement bien adaptées pour le marketing des objets connectés tel  le marketing prédictif, le marketing en temps réel et le co-marketing qui ne sont encore que peu ou pas utilisées dans ce secteur.

Les principaux freins au déploiement de stratégies marketing plus avant-gardistes par les fabricants d’objets connectés sont :

  • La perception des consommateurs de l’utilisation de leurs données à des fins de commercialisation
  • La convergence requise des compétences statistique, informatique, analytique, psychologique, sociologique et marketing
  • L’Absence de formation des analystes marketing dans les stratégies de commercialisation utilisant les données de masse (big data)
  • Le coût élevé des infrastructures et applications nécessaires à l’analyse de la modélisation des données

Les trois derniers freins expliquent également pourquoi les fabricants d’objets connectés utilisent principalement des fournisseurs externes pour analyser les données et développer leurs stratégies marketing.

Il est évident que le marketing des objets connectés en est encore qu’à ses balbutiements. À défaut d’une innovation de rupture dans le domaine, il faudra attendre de nombreuses années encore avant de voir le marketing des objets connectés se différencier substantiellement du marketing courant.

Growth hacking. Are you confused?

Growth hacking. Are you confused?

When I first heard the term growth hacking, about 5 years ago, I thought Great! Some unscrupulous marketer is at it again. In my head hacking meant doing something either illegal or unethical. Either way, it wasn’t going to be good for business in the long run and whoever was doing it would figure it out sooner or later.  Hence I dismissed it.

During the following couple of years, I stumbled upon an increasing number of posts and web articles on growth hacking. The authors described tactics they had used and stated the impressive results they had achieved in attracting users to an application or a website while spending very little money. Many of these tactics were creative and the vast majority of them were neither illegal nor unethical. I had to know more, so I researched growth hacking thoroughly.

I started by going to Sean Ellis’s first post on the topic where he coined the term. That honestly didn’t give me much to go on. Since I’m a firm believer in the need to understand the context in order to truly understand the problem, my second step was to study who Sean Ellis was. What was the road that led him to create the growth hacking concept?

Sean’s professional journey led him first to a commission only sales job in Budapest, in a pretty cut-throat environment, selling advertising for publications. The guy did brilliantly. In order to do so however, he had to get very creative. Then he headed to Silicon Valley for short stints (less than a year) at Dropbox and Eventbrite where he was hired specifically to grow their user base. At that time he was also active in multiple technological start-ups in the valley, helping them not only with their marketing but also often acting as an angel investor. He went on to become a serial entrepreneur.  Hence his business culture is soaked with the Silicon Valley culture where fast growth and big numbers (where the money comes from is secondary) are what counts most.

Understanding the creator’s journey and the environment in which it was created can help you understand where growth hacking shines and where it doesn’t.

Like any other business concept, growth hacking is not a panacea. It isn’t applicable in all situations, in all companies, at all times.

Growth hacking can be described as creative digital marketing tactics, aimed specifically at web user base growth, that are best suited for web based products/services during the start-up phase, immediately after product/market fit stage. This is when scaling the business goes from back burner to front of mind.owth hacking can be described as creative digital marketing tactics, aimed specifically at web user base growth, that are best suited for IT products/services during the start-up phase immediately after product/market fit stage.GG

Are you confused yet? I didn’t think so. When applied the way it was intended to, a good business concept usually isn’t confusing.

Growth hacking - Baker MarketingIt gets confusing when the concept starts being applied when it shouldn’t or in situations it isn’t intended for. This isn’t to say that a concept shouldn’t evolve and be adapted to new situations and contexts. The message here is, when it is, it must be done carefully in order to preserve the concept’s value.

A good example of an evolved application of growth hacking is when it is used by large corporations to grow their user base of a new (or even an existing) product. Only a few years back an active social media presence, cross promotions, webinars, Facebook contests and selling their apps through the iStore or Google app store could all be have been considered growth hacks in large corporations. Today, these same marketers would need to be more creative in their tactics to be counted as growth hackers. The tactics, whatever form they take, are a part of an overall marketing plan and, when well executed, give fast and excellent results in growing the user/customer base.

Growth Hacking - Baker MarketingHere are a couple of situations that I was exposed to in recent months which confused the heck out of me. They also show that comprehension and application of a good business concept can get distorted to the point of being harmful.

The first one was an 18 month old start-up that was a B2B reseller (of non IT products). It used the web as one of its distribution channel. When I asked the owner who was doing his marketing strategy he proudly said to me; We don’t waste time with marketing, we only do growth hacking and sales. I asked him what growth hacking entailed for his company. He went on to describe various digital marketing tactics, some aimed at finding new customers and others aimed at brand recognition (hence not growth hacking). The web developer who he had employed as his growth hacker did use analytics but wasn’t familiar with cohort analysis or the sales funnel. Aside from transferring email addresses, his growth hacking tactics would generate, to the person responsible for sales in non web channels, there was no other coordination between the two.  When I asked the head of sales how useful these email addresses were he rolled his eyes and let out an exasperated sigh. In the end, growth hacking was costly and had little to no impact on revenues in this situation.

Growth hacking is NOT a replacement for marketing. It is one of the categories of digital marketing tactics that can be used in specific situations to generate users, members, contributors and/or email lists (amongst others). Growth hacking has little or no value if it isn’t part of an overall marketing strategy.

The second situation, and I have seen it more than once, is when a founder or co-founder tags him or herself as Chief Growth Hacker. From day one, their focus is on growing their potential user (fan) base.  The product is nowhere near being ready, the target customers still change every other week and product/market fit is nowhere in sight. Growing your user/customer base is a valid concern, even on day one, but growth hack tactics should not be how you find your first customers.  Even if you have a web only based business, your first customers should be people you first approach and meet face to face. People you can observe in various situations. People who have no restrictions (or constraints) in telling you what they like and don’t like about your product idea. People you get to know inside out. Most of the users generated by growth hacking tactics before you achieve product/market fit will not convert into paying customers.

When you have not yet achieved product/market fit, you are better off having only a few customers (willing to pay you), that you know inside out, than having a large base of potential non-paying customers that you know only superficially. Once you know your various customer segments intimately and have found the product that they can’t live without, then will be the time to put massive efforts into growth hacking.

Yes, showing a large number of potential customers early can make potential investors notice your start-up.  However, unless you can convert a large proportion of these potential customers into paying customers soon, which won’t happen if you haven’t reached product/market fit, the investors will disappear faster than you can snap your fingers.

If you are a founder, and thinking about using growth hacking, the takeaways are:
Lessons growth hacking - Baker Marketing

  • Make sure the timing and contexts are right for it
  • Growth hacking is not a substitute for marketing. It is but one of its components
  • Growth hacking requires skills in analytics. Ensure you have those skills in your company before attempting it
  • Growth hacking is not a magic bullet. It will not ensure your start-up’s success by itself.

If this post has raised any questions in your mind about growth hacking, feel free to contact Baker Marketing. We’ll be happy to help you answer them if we can.