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3 Tips for Managing a B2B2C Product

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Managing a B2B2C product is like working for an auto manufacturer: you sell cars to dealers, who sell to consumers.

At HelloWallet, we sold web and mobile apps that helped employees improve their financial wellness.  The product was offered as a benefit to employees by their employer, who was our our client.  The B2B2C model is complex to manage – here are some tips I learned along the way:

#1 – Get KPI Alignment First

Make sure you know what outcomes your buyer is expecting your product to deliver, and how they’ll be measured.  At HelloWallet, our clients were looking for a variety of things –  productivity gains due to less financial stress, “engaged” employees, retirement readiness, and retention.  As you might imagine, the solution could take many different forms based on which of those outcomes was most critical.  It’s important to make sure you know exactly what metric the customer will use to measure success.  During sales calls, I would often ask:

How will you measure the success of this program in a year?  How will you know if HelloWallet is “working”?

Sometimes they didn’t have an answer, or they focused on metrics like adoption and engagement that I knew weren’t enough to justify our proposal come renewal time.  Make sure you have a definitive answer to this question from prospective customers.  Work with your sales, account management or user research colleagues to solicit the answer to this question.  Also, as I’ve written about before, don’t pick more than 2 Key Performance Indicators – otherwise they’re not “key.”

(Note: the KPI(s) you select with clients should be consistent across clients.  If you’ve already established KPI(s) with existing clients, new clients should hear that is how you measure success during the sales cycle. Otherwise you’ll end up with an unmanageable number of KPIs)

#2 – Establish Flexibility

As a SaaS product manager, your worst nightmare is to have a multi-year roadmap written in stone for 1 or 2 key clients.  I’m not saying you don’t need a multi-year roadmap or a way to explain short, medium and long term initiatives to prospective and existing customers, but you need the flexibility to update that plan when necessary.  I wrote about an alternative to Gantt-chart-style roadmaps previously, but the basic idea is to let customers know that the way you’ll deliver ongoing value is to test and learn what product changes deliver better outcomes.  Which leads me to the third tip…

#3 – Be Transparent

Provide updates to clients on how you’re doing with your KPIs and what you’re learning along the way.  Present data analytics, user research insights, usability testing findings and experiment results to make sure your customers understand that the value they’re getting comes from your team’s constant efforts to improve the product to better deliver the outcomes they’re expecting.  You should be presenting this information to each customer and soliciting their ideas to achieve better outcomes at least once a quarter.

Want to talk more about managing a B2B2C product?

Email me or schedule a call.

If You Build It They Will NOT Come

So you’ve got a great idea, and you’ve vetted it using the 4 steps I previously wrote about.  Now what?

Build an Audience, Not a Product

Many entrepreneurs (myself included) will jump immediately to building a prototype or alpha version of a product.  They’re starting at the end of the conversion funnel – focusing on the user experience and ignoring the critical initial steps in a user acquisition funnel: marketing.  What’s going to prompt people to use the product? How will they hear about it? How will you convince them to try it? (not sure? see How Jobs To Be Done Can Help You Get More Users To Switch To Your Product Or Service).

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Please don’t build something before you know how people will discover it.  Please.

This isn’t just my advice: read about Product Hunt founder Ryan Hoover’s take on this.

Instead, I’d recommend testing the marketing campaigns to validate user acquisition costs that could to make sure your business model is realistic.  Many startups fail because they run out of cash, and marketing expenses, especially when you first launch, can really drain your bank account.

Testing Marketing Messages

For a few hundred dollars, you can start running ads in a few days to test your user acquisition costs.  Try running ads on LinkedIn (if you’re targeting a professional or enterprise customer), Facebook, or Instagram (not sure how to run an ad? Mailchimp, one of my favorite digital marketing platforms, can help).  I’m not a fan of Twitter because setting up and analyzing results from ads is painful, but they do offer one unique feature: the ability to target people based on what apps they have installed on their phone.

Build a Landing Page to Collect Emails

So where do you send all the people who click on an ad? Build a simple landing page that explains your product using words and pictures.  Ask people to give you their email address to get updates, and then send periodic (monthly or bi-monthly would be fine) updates on how things are going.  Or write content they’d be interested in and include that in a periodic newsletter.  Track opens and clicks.  These are your early adopters and they’re likely to volunteer to beta test your product if you do build it.

If they’re not willing to give you their email address, why should you think they’d sign up for your product?

Here’s an example landing page I’m building for an idea I’m working on:

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I built it in an hour on Lander and before I even launched it, I ran some usability tests to see how people would react to it.  That way, I can tweak the page before running ads so that I can convince more people to provide their email and therefore lower my user acquisition costs.

Want to talk about building an audience for your idea?

Email me: startupproductcoach@gmail.com

How to Recruit User Research Participants from Craigslist

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Consistent communications with users is critical for successful products

Talking to your users should be a consistent part of your product development process, no matter what the stage.  Don’t ever assume you know how people will respond to what you’re doing – humans are complex creatures.  When vetting an idea, it’s a great way to confirm that your solution will be different, and that the problem you’re trying to solve really exists in the world.  When launching, it’s a great way to gauge reactions to user acquisition campaigns/ads as well as your first-time user experience.  When growing, it’s a critical way to ensure your tactics will scale to large audiences.

So how do you recruit people to interview for their insights and feedback?  There are a lot of options, such as UserTesting.com and respondent.io.

But in this post, I’m going to describe a low-cost and perhaps the fastest way to recruit: Craigslist.

Posting a Gig

  1. Pick a city to post in.  If you’re looking to recruit for an in-person interview, post locally or in the cities where you’re willing to go to.
  2. Create a post in the “gigs” section.  I typically choose the “computer gigs” category but you can experiment with others.
  3. Describe who you’re looking to talk to and what you’re asking them to do.
  4. Provide an incentive in both the description and the “pay” input field on the Craigslist form.

Here’s an example from a recent post I made:

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Some Things to Keep In Mind

  1. Keep in mind some biases that Craigslist will introduce to your participant pool: location (because you had to pick a city or multiple cities to post this to) and where you posted this.  For example, I posted the above in the “computer
  2. I find that more people respond when I post the gig to “computer gigs” (vs other categories like creative or writing).
  3. I find that most people respond to these gigs at night, so expect at least one day turnaround for starting the recruiting process.
  4. Craigslist doesn’t allow  you post links to screener surveys in the post (I used to use a Google Form to filter out people who didn’t meet the criteria of who I wanted to talk to) so make sure you’re clear in your posting what the requirements are.  You might get some fakers still email you, so you might want to think of ways to filter them out before scheduling an interview.
  5. If you feel like you’re not getting enough responses, consider increasing your incentive.  A high level of compensation is $1 per minute of time you’re asking them for, but I’d suggest starting a little lower at first as very few people make $60/hour.
  6. Don’t forget to factor in no-shows.  For example, I posted a gig like the one below in 5-6 cities and in the course of a week, I had 20 interviews scheduled. Only 6 people (30%) actually showed up, even after accepting the meeting invite.  I’d recommend following up the day before or the morning of to confirm they’re coming and remind them of the incentive.

Some Example Results

I posted this ad in both Austin and Craigslist as I’m trying some new meeting scheduling tools.  I had 7 interviews on my calendar within 2 hours!

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Want help recruiting user research participants, or any other parts of the user research process?

Email me: startupproductcoach@gmail.com

Capturing Customer Insights for Your Squad

Not everyone from the squad (design, engineering, QA) may be there when you talk to customers. So how do capture insights to share what you learned with them?

My vote is the Job Story and I feel this article does a great job explaining it.  A Job Story summarizes key insights way better than an audio recording or written notes.

Let’s write an example job story from my experience in FinTech: planning for retirement.

When I start a new job, I want guidance in selecting my 401k contribution rate, so that I can feel confident about my decision, finish my HR paperwork and get to work! 

Let’s look at each clause in further detail.

The When Clause

This is perhaps the most critical part – it provides important information about the context in which the person is trying to do a job. Some key questions to ask when writing this:

  • What’s prompted the person to think about doing this job? (In the CREATE framework I wrote about previously, this is the cue). In this example the cue was probably filling out some HR paperwork.
  • Where is the person when the cue occurs? As you might imagine things like whether this person is at home, at work, or on the road would be important. Do they have a computer nearby? Or just a phone?

In the example above, if I had just talked to a new hire about their journey to make this decision, I might refine my when clause:

When I’m sitting in my first day HR orientation and am asked to fill out paperwork about how much I want to contribute to my 401k…

The I Want Clause

This is where you explain the job to be done. In this case, it’s deciding how much to save for retirement. Note that I intentionally didn’t specify a solution – no mention that we should show something like “you’d have $50,000 per year if you saved 5% and $70,000 per year if you saved 7%” or “to max out your employer match you should contribute 6%”.  I’m not saying you can’t suggest solutions when reviewing the story with your squad, but I’m a big believer that product managers should be presenting problems, not solutions.

In this example, as the squad starts brainstorming possible solutions, they may come up with either a tool to explore the implications of different contribution rates or an engine that just spits out a recommendation with an explanation. Both solutions might work for the person.

The So That Clause

This is where you explain why it’s important to the person to complete this job.

In this example, it’s important to note that for this person, they want to make a good decision but the real goal is to get through the paperwork and start the role she was hired to do. There might have been other reasons the person wanted to do that job:

…So that I can retire as soon as possible (he doesn’t like working!)

…So that I can minimize my annual tax bill (trying to lower her take home income)

Think about how different the squad might interpret the story based on the way it’s written.

Don’t forget the emotional and social aspects

Every job story has 3 components:

  1. Functional
  2. Emotional
  3. Social

I’ve only written about the functional here to start: what is the person trying to do? It’s important to consider the other two aspects though.

Emotional. How does the person feel before, during, and after they’re doing this job in their life? In this example, we know that doubt is a prominent feeling when retirement planning; no one is really sure when planning for something that might feel so far away.

Social. Will others know that the person has done this job? Will they discuss it openly? What will others think about the person based on how they did this job? In this example, we know it’s not common to discuss your 401k contribution rate with others. Maybe part of the solution is to make it easy to share your contribution decision anonymously within the company or to publish anonymous data from HR so new hires know what others have done in the past.

Want to talk more about how your team is collecting, documenting and using customer insights? Drop me a line. 

Why You Should Design Experiences Like Real World Conversations

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Does your digital experience feel like a real world conversation?

Yesterday Michaela Hackner, Head of Content Strategy at Capital One, came to talk to us at work about how they’ve used content strategy to improve their user experiences and business outcomes.  She also mentioned that her team is part of the Conversation Design and that they design interactions using “talk bubbles” to imagine what the back-and-forth between C1 and the user will be, as if the person had walked into a retail branch (or in this case, was talking to Alexa).

It got me thinking to how great digital experiences mimic great real-world interactions – they all start with a conversation.  A common place I see startups failing with this is asking users to register before demonstrating value or even understanding what the user is trying to accomplish.  Don’t assume this person read your entire marketing site or your app’s entire description in the App Store or Google Play.

I’ve written about this before (with the shame-on-you example being LetGo).  Asking me to register before even understanding what I’m registering for or the value to me of registering is like:

  • A car salesman asking you to fill out a customer lead form the minute you walk into a dealership, before he greets you or you even tell him why you’re there
  • Asking for my credit card as soon as I walk into a retail store, even if I’m just browsing
  • A banker shaking my hand and immediately asking me for my Social Security Number and address so he can open a new account for me, without even trying to understand why I might be interested in a new account

Instead, imagine if you had a retail store – how would you train your employees to greet a prospective customer when he/she walks in the door?  What types of questions or responses would you expect?  Start there and see how much better the user feedback and business outcomes can be.

Want to talk about making your user experience more conversational?

Should You Let a Customer Subsidize the Development of a New Product?

When you’ve identified a new need in the market, it’s tempting to let the first enterprise customer subsidize the development costs.  Here’s a look at the pros and cons of that scenario, along with a recommendation.

Pros

  • There’s no better way to validate the need for a new product than to have a customer willing to pay for it to be built.
  • There’s also no better way to ensure it does the job it’s supposed to than to have a real customer who is looking to use it to solve a real problem (likely urgently, so don’t forget to release often, even in beta format, to get feedback from that first customer).

Cons

  • The customer thinks the product will be “theirs” and that they own your roadmap. Make sure you set the expectation up front that the product is intended to be a SaaS solution that serves other customers as well.
  • You build the product using only one customer’s use case, making it unusable/irrelevant for other customers.

So Should You Do It?

Yes, but just make sure you:

a. Make it clear to your first customer the product is not “theirs” but that  you value their partnership/feedback in being the first customer. (This means you can’t sign exclusives!)

b. Get out with your sales team to pitch the new solution to more customers.  Ideally sales is landing a second/third customer while the product is being developed, so that you can get more input on how it will do the same job for many customers.

Want to talk more about launching a new product? Drop me a line.

4 Steps for Vetting A Product or Business Idea

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Is this you? If so, keep calm and don’t build anything yet.

So you have an idea for the next killer app or product?  Before you start a company, build a prototype, or do any marketing, vet the idea first.  Specifically:

Step 1: Identify What Problem You’re Solving

“People don’t want a 1/4″ drill, they want a 1/4″ hole.”

I would go one step further – why do they want a 1/4″ hole?  To hang up a picture? Why? To decorate their house? Why? To impress guests with their style? Alright, now we’re getting somewhere.

It’s important to understand not only what someone is trying to do in the context of his life, but also why it’s important to him, and how he’ll measure progress/success.

Step 2: Talk to Prospective Customers

See if you can find 10-12 people that might buy your product.  (Not sure how to find them? Check out my post on recruiting people from Craigslist).  Offer them an incentive such as a $25 Amazon gift card to talk to you for 30 minutes.  Find out what they’re currently doing to solve the problem at hand.

  • If they’re not doing anything, find out why.  Too much work? Too expensive? No time?  Explain your concept to them.  Would they use it? Why or why not?
  • If they’re using something else already, find out how they like it.
    • If they’re not happy with their current solution, find out why and ask what, if anything, they’ll do next to find a better solution. (Google it? Ask a friend? Talk to a family member?)
    • If they are happy, find out why.  What would cause them to change their mind?

Take notes during or immediately after each discussion and later summarize the themes.

Step 3: Research Alternate Solutions

If you heard of some alternate solutions to the problem from your prospective users, research them more.  Start with a simple Google search.  Things to consider:

  • Do they have a significant head start? (ex. they’ve been around for 2 years and have 50,000 Facebook followers)
  • How would your solution be different/better?

Identify the top 3 competitors you’d face and write down how you’d explain to a prospective user how your solution is better than each.

Step 4: Draft the Business Model

How will your business make money?  Some questions to ask yourself:

  • How will I find customers?  How much will it cost to get the first customer?
  • How much can I charge each customer?
  • What other costs will I incur? (staff and rent are likely the biggest – think about how many people you’ll need)

Create a spreadsheet and play with the numbers.  What are the 3-4 key numbers that really change revenue or costs?  Highlight those cells – they represent the key assumptions you’re going to need to validate if you move forward.

If it looks like you can generate more revenue than costs, nice job!  Sounds like you might be onto something profitable.  If not, stop.  Do not pass go.  Do not collect $200.  Move on to another idea.

Want help vetting your idea? Drop me a line.