“Feedback is just noise until you segment it.” – Des Traynor, Intercom Co-Founder
By the end of this article, your users and customers—whether you have one or a thousand—will fit on a map like the following:
They will be from different markets, they will have sought different value from your product, and they will have got different results out of it.
Some combinations of markets and value will generate great results, others won’t. If your team dedicates itself to growing them, some of these combinations could turn into fast-growing businesses, while others might destroy your business completely.
The more users and customers you have had, and the fuzzier or more ineffective your messaging has been, the more value/market combinations you’re likely to discover.
To get a sense of the opportunity set, and ultimately to be able to drive growth and demand for your product, you need to surface as many of these combinations as possible.
- Analyzing Business Outcomes
- Recruiting for User Interviews
- Conducting Interviews
- Using the Buying Triggers to Find Market & Growth Opportunities
- Extrapolating Market Opportunities Using Buying Triggers
- Is There a Market in The Gap?
- Going All In
- A Case Study :: How Informavores Found the Buying Trigger
Now, since you probably don’t have a clear idea of who has been using your product and why, you need to start with what you can know: the outcomes.
Analyzing Business Outcomes
You may not know exactly why users and customers have behaved the way they did, and what their buying triggers were, but you can tell what has happened.
At this stage, there are ways for you to know which users have found the most value with your product, and which users have generated the most value for your company.
This information, in turn, will allow you to rank your users from best to worst:
On one side, you’ll have your absolute best customers, your “fans” or advocates. On the other, will be your least valuable users and customers, those that probably shouldn’t have been targeted.
By comparing great, good, and bad fits, you can find the buying triggers and the attributes that influence whether or not a customer relationship will work out.
For example, if you realize that many of your top-performing users work for large organizations, and that many of your worst users are consumers or freelancers, you might assume that business size—or the simple fact that they work for businesses—is a key criterion.
Since the idea of what a great customer is depends largely on the type of product and business that you have, you’ll need to come up with your own unique way—your recipe—to identify your best users.
Defining Your Unique Recipe
Typically, this recipe will be a mix of:
- Revenue: Customer lifetime value (CLV)—how much revenue is generated over the entire duration of the customer relationship—is often a good way to find your highest spending customers.
- Engagement/Retention/Value: A good way to evaluate engagement might be how often core product actions are performed, or by looking at 7-, 14-, or 28-day retention rates. If there is a metric that can help you get a sense of the value that the user has been able to extract from your product, then this metric might be even better.
- Referral/Word of Mouth: For word of mouth, this might be the number of referrals sent or completed, or a Net Promoter Score (NPS)®. Atlassian is an example of a company that uses customer NPS to find segments that are worth growing.
Your recipe may also include factors that are more specific to your business model.
The larger your user base is, the more criteria you can include in your segmentation without drying the pool too much.
Don’t take this too far. Simply look for an effective way to force-rank your users and customers:
Experiment with your recipe to make sure that you’re not missing out on great users. With each change, look at the profiles (and their behaviors) that are coming up on top and at the bottom. Are those the people that you’d expect to find there?
Depending on how technical you are, you may be able to create your ranking using SQL, a CRM, database exports, or by looking at people analytics in tools like Amplitude, Mixpanel, or Intercom.
Recruiting for User Interviews
Once your user base is ranked, you should start recruiting for customer interviews.
Each interview should take roughly 20–30 minutes. With this series of interviews, your goal is to discover and explore the buying triggers and various value/market combinations in your user base.
Each interview will allow you to learn about the type of value that users were seeking, why they were looking for these specific benefits, why they signed up, and what happened once they began interacting with your product.
These interviews will give you ample opportunities to unpack your interviewees’ (mis)understanding. You may realize that a group of users was seeking an altogether different solution, or that they simply didn’t understand that your product could deliver the value that they were looking for.
You can short-cut your learning process by comparing the information that they share with their actual use and interactions with your product.
To start recruiting, focus on users that are either still active, or that have stopped using your product within the last 90 days. Beyond that, their recollection of facts and events might be blurry. You should also make sure that they were given enough time to try and use your product, whether they did, or they didn’t.
Who to Recruit for the Interviews
Although the ideal situation would be to speak to all of your users to discover every single value/market variation, in reality, this usually isn’t possible.
Look at your rankings, and randomly recruit a sample of 12–15 participants from your top 20–30% users. A sample of this size will help balance depth and coverage.
You should also recruit the same number of participants from the bottom 70–80%. This second grouping will help you contrast the information captured, and may point to instances where users were looking for the value that your product is able to deliver, but got confused by your messaging.
Considering that you’ll likely need to contact five times more users than the number of interviews that you’re trying to land, your user base needs to be of a certain size. If you don’t have enough users or customers to recruit from, simply make sure that your recruitment is balanced between groups, and that you’re speaking to at least 12–15 users in total.
You can use our battle-tested message to invite users and customers for interviews, or you can craft your own.
Interviews help you understand which market groupings your interviewees fall into, what their buying triggers were, as well as the specific value that they were seeking.
The best way to get to this type of information is through Switch interviews—the most effective interview type for understanding decision-making processes that lead up to using, or trying a product.
These interviews focus on capturing the story of a user’s relationship with a product from First-Thought (when they first began looking for the value of the product), through to First Use, and all the way to On-Going Usage or Disengagement:
They allow you to understand why users or customers ‘hired’—or were hoping to ‘hire’—your product. What Job are they trying to get Done?
To capture useful information, you should begin by asking the participant to share, in detail, the circumstances that led them to your product (their initial struggle). Then, you need to follow their story chronologically along the Switch timeline.
Asking detailed, specific questions about tangible aspects is a good way to jog an interviewee’s memory.
Questions for Switch Interviews
Here’s what your question list could look like:
- How did you first hear about [ Product ] ? What did you know about it at the time?
- What was going on in your life at that time?
- Did you imagine what life would be like with the product? What were you expecting?
- What was your previous experience with [ Solution Space ]?
- What was wrong with what you were using?
- What made you decide to [ Buy / Use ] the product?
- Did you evaluate other products?
- Did anyone else weigh in on the decision?
- What was the main thing that convinced you?
- Once you [ Signed up / Bought ], how did the product compare to your expectations?
- What surprised you (good or bad)? Why did it surprise you?
- Now that you have [ Product ] what can you do that you couldn’t do before?
- What is the main value you feel you’ve received from the product?
- What is the main problem you feel that the product solves for you?
- Why do you keep using the product?
- If we took away [ Product ] from you, what would be the things you miss most? What would you use as an alternative?
- Now that you’re using [ Product ], who would you recommend it to and why?
Don’t jump to conclusions too quickly. At this stage, you’re just trying to explore and discover the triggers and value/market combinations.
Consider recording these discussions and then sharing the raw files with teammates who aren’t involved in the interview process. This will help them make their own conclusions, and will increase the overall objectivity of your analysis.
Put some time between finalizing the interviews and analyzing the data.
Using the Buying Triggers to Find Market & Growth Opportunities
What did the interviews reveal? Did some users or customers seem particularly engaged or interested? Did you discover promising use cases?
Go back to our chart. On the vertical axis, list the different value that interviewees were hoping to get from your product.
Use size, or a different color, to indicate your most valuable users or customers:
At a glance, the map should help summarize both the type of value that your users were seeking, and how they behaved.
The best opportunities will come from two groups on your chart:
- Right-fits: Users or customers who were attempting to use your product for its core value. For these users, you should focus on whether or not they were able to find success, if they were able to understand that your product delivers the value that they were seeking, and why they ended up becoming disengaged (if they did).
- Unexpected successes: Users or customers who were looking for benefits other than those intended, or who were hoping to solve another problem (had different buying triggers)—but were still able to find success with your product. For these users, you need to figure out what problem your product solves for them, what caused them to buy, and the type of value that they feel your product delivers.
We’ll extract market opportunities by digging into the profiles and behaviors of users and customers in these two groups.
Extrapolating Market Opportunities Using Buying Triggers
In essence, a market is a set of potential customers who share a pain, problem, need, or Job to be Done that will reference each other’s purchase decision for a specific need.
At any moment, the same person may be part of one, or several markets. For example, there might be little to no overlap in my membership in the markets of:
- People who work in pharma (industry);
- People who work in sales (function);
- People whose income taxes are late (problem);
- People that listen to music (Job);
- People who play chess (hobby);
- People who are learning to invest in crypto (opportunity).
Much like me, your interviewees will be part of multiple markets.
Although they might fit in many markets, there will generally be one affiliation or market that causes them to seek the value of your product.
For example, I write my books using a tool called Reedsy. The reason why I use this tool is not because I’m part of the chess playing market (I’m not), it’s because I’m part of the market of people who write books (authors).
Get back to your interview data. For each user or customer in your right-fit and unexpected success groupings, ask:
What affiliation caused this person to seek out our product?
And update the previous chart with the new information:
Are there groupings that repeat? Are there surprising groupings? Which groupings seem most promising?
In the above example, the most promising opportunity might be internal communication teams using the product to communicate with team members and employees.
Take note of the most interesting market groupings and buying triggers and keep moving.
Is There a Market in The Gap?
It’s easy to get excited by the opportunities that you discover. You may find one or several great use cases that could help you scale. You could simply jump in, adjust your product’s functionalities and positioning, and start going all in. At this stage, however, the cost of making rash decisions can be tremendous. Before going all in, you should do your research.
For a grouping to make sense, there must be channels where prospects can exchange and share purchase decisions. Without these, it will be difficult for your business to grow fast.
Markets generally self-organize around communities and watering holes. To confirm that your groupings can lead to real markets, you’ll want to find those watering holes.
Perform searches around your market groupings. For example: “[ Market ] + mailing list”, “[ Market ] + forum”; “[ Market ] + competition”, or other keywords including Twitter, group, list, community, help, wiki, questions, meetup, list, resources, association, customers, tutorials, awards, user group, or blog.
You could also use a tool like The Hive Index to find communities in the market.
If there are active watering holes where prospects exchange and share purchase decisions, then you’re probably dealing with a real market.
Evaluating Market Groupings by Buying Triggers
For each grouping and positioning, also ask:
- Is this a market of one? Can you point to other customers like the one(s) that you identified? How are they connected? How would they be able to share their purchase decisions? Would there be enough customers to sustain your business?
- Could you reach them? Are there channels that you can use to reach similar prospects? How responsive would they be?
- Do you have the right product? How different are their needs from what you’re already offering? If you make product enhancements to meet their needs, would those changes align with your vision for the company?
- Could you help them get return on their investment (ROI)? Could customers achieve the success they seek? Will this provide significantly more value than the alternatives? Can this be done predictably and repeatably?
- Is there urgency?Pain is one of the best predictors of future behaviors. How likely is it that customers decide to do nothing? Is there enough momentum for them to want to make a change? What would their core reason to act be?
- Do prospects have money? Do they currently have budget? Do they have the authority to make their own purchases? Can they easily access funds to buy?
- If made successful, could customers provide references freely? Some industries are opaque, effectively limiting word of mouth. Could customers recommend your product freely? Are there other prospects in their networks? It’s important for customer references to attract the right people.
Although few opportunities will meet all criteria, this type of evaluation process will ensure that your decision is well thought out.
Going All In
You’ve identified a positioning and buying trigger that looks promising. It ticks most of the boxes. Time to go all in?
It’s difficult to commit to a positioning when you don’t know what other opportunities may be available. If your company’s timeline and financial situation permits, it can be a really good idea to spend the next month exploring a broader set of opportunities. Your search might point to a better opportunity for your innovation, or it might confirm that the opportunity that you have identified is the best one for you.
If, however, you’re short on time or if you have a strong belief that the opportunitiy identified here will work itself out, feel free to start validating the market.
Deciding which opportunity to focus on is an important decision that shouldn’t be rushed. Research has shown that carefully evaluating many opportunities has a positive impact on the odds of success for new ventures. Ultimately, spending a little more time evaluating triggers and segments can really pay off for your team.
A Case Study :: How Informavores Found the Buying Trigger
After one year building the first version of the product, and another one trying to sell the software with few successes to show for, it was clear that each customer had very different needs.
With so many differences, it was hard to grow the company in a standardized way.
The company was failing. Steve was slowly going bankrupt. Until, one day, through what ended up being a heated discussion, a consultant from PricewaterhouseCoopers made Steve realize that Informavores was a good business—but they weren’t trying to grow it nearly hard enough.
Following this conversation, Steve got to work creating a new plan for the company. He wanted to refocus Informavores around a single vertical with a single use case. Instead of selling a generalized platform that could do different things for different people, they would solve one major pain for one market.
Having done a lot of the sales himself, Steve had a hunch that the company should refocus on call guidance workflows for contact centers, a use case that at the time only accounted for 20% of their revenue.
It was a gut decision. The team wasn’t happy with the much smaller vision, but it didn’t take long for this new direction to show promise.
Within 12 months, Informavores had signed deals with the US Department of Defense, Microsoft, Symantec, HP, and many more large organizations.
Their growth rate had more than doubled. By focusing on a single use case, they were able to find a reliable growth engine, specialize their backlog, and address customer problems with more depth than before.
In 2009, the company was acquired by Salesforce. Informavores would go on to become one of the backbones of the Salesforce Platform (ex-Force.com).
Looking back, Steve says that the challenge really boiled down to 1) figuring out who the customer was and why they were buying (their buying trigger), and 2) finding a way to reach them.
Sometimes the answers are hidden in plain sight. Informavores found success when they doubled down on a use case that a segment of their customers was already paying for.
More on Buying Triggers
- How a Win/Loss Analysis Can Help You Find Product/Market Fit
- 10 Signs You’re Targeting the Right Customers in B2B SaaS
- How to Map the B2B Buying Process With Customer Interviews
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