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Why Enterprise Products are Missing the Boat on Growth

Growth is no longer just for B2C and consumerized B2B companies - if you’re building an enterprise product and you’re not thinking about growth, you should be.

Most people think “growth” isn’t relevant for enterprise. As a result, companies end up building complex products to satisfy a list of requirements from IT buyers that leave end users frustrated and looking for a “better mousetrap.” As large enterprises transition to SaaS products, this outdated approach leaves the doors for product disruption wide open.

While product disruption in this space has been slower than in consumer and high volume SMB due to built-in defensive moats around contract structure, technical integrations, and brand, it’s now starting to happen faster. Think Salesforce, Box, and now Slack as it expands upstream towards enterprise.

To unpack the dynamics behind this shifting enterprise landscape, I’ll walk you through the following in this post:

  • How user experience and growth is changing the enterprise game
  • How to customize the user funnel for enterprise
  • The 4 pillars of enterprise growth and how to align them with consumer growth strategies

As this wave of change accelerates, some enterprise companies will hunt down the opportunities for growth embedded within the shifting landscape, while others will bury their heads in the sand until it’s too late. Which will you be - the lion or the ostrich?

About the Author

Bela Stepanova

Bela Stepanova

Bela Stepanova is the former Director of Product Management at Box and a Reforge Growth Series alum. She founded Box's Growth team, and before that Box’s Product Operations team. Prior to joining Box, she ran product and engineering teams building large scale financial platforms for Accenture clients. She also spent a few years helping global non-profits create and execute their CRM & e-commerce technology strategies.

How User Experience & Growth Is Changing the Enterprise Game

Enterprises are undergoing a digital transformation due to three significant trends in the market. They have been switching from:

  1. On-premise hardware to cloud
  2. Purchasing and installing software to SaaS
  3. Desktop to mobile

It’s these changes that are facilitating the consumerization of IT and revolutionizing how decisions about software get made.

Traditionally, when large enterprises implemented new technology systems and onboarded employees, the costs of switching became prohibitive. These switching costs created huge moats for legacy enterprise software companies, making it nearly impossible for competitors to gain traction.

But now, due to the forces of digital transformation, this conventional enterprise paradigm is collapsing and creating new opportunities for technology companies that prioritize user experience and growth.

These days, if users aren’t using a product, the real switching cost is logistical. Imagine this - a company installs Salesforce, but the team doesn’t really adopt it - no one’s inputting contacts or tracking communications.

When IT identifies the issue, no internal development work is required and no big migration is needed to switch CRMs - IT can just plug and play another SaaS product.

User adoption and engagement are becoming important measurement tools for enterprises as they evaluate switching technologies. IT buyers now measure post purchase success using product engagement metrics, and many now even measure end user productivity as a key input to core business metrics.

These changes mean user experience is no longer a checkbox on Requests for Proposals (RFPs) - it’s a key measurable metric. While user experience and user growth might be a limiting growth factor for most older enterprise products, I see it as an opportunity for enterprise software companies to build a competitive advantage.

This is why at Box, we take a proactive approach to user-focused growth. This may be unique in enterprise now, but we think it’s where things are going.

An Enterprise Flavor For The User Funnel

Like any good growth team, we have a well defined user funnel and crisp North Star metrics. But because Box is an enterprise product, we customize the traditional funnel to account for both the user journey and the needs of the buyer and IT administrator. For Box, this means adding additional steps at the top of the funnel for “seats sold” and “seats deployed”.

With Box, and many other enterprise products, after seats are purchased, enterprise administrators often need to create new users in the system before the end users themselves ever touch the product.

This step is critical to enterprise-grade deployments. Companies often need to set up hundreds or thousands of users simultaneously, while configuring the product to fit specific business requirements, such as compliance and security policies, notification settings, and other specifications.

Without seats sold and deployed reflected in our user funnel, we wouldn't be able to correctly model growth for the product.

Adding these additional steps allows us to get a full picture of the funnel so that we can accurately identify the highest impact growth opportunities and effectively apply consumer growth strategies.

Like many other growth teams, we continuously tackle user on-boarding and improve retention by helping users get started with the product.

However, during our initial activation experiments, we hit some limitations of common consumer activation strategies. Specifically, we saw that account level activity from buyers or IT admins could hinder the effectiveness of user level activation tactics.

For example, if new users weren’t added into the right groups by the administrator, when they tried to access work documents on Box for the first time, their initial experience of the product was disorienting, no matter how on-point our onboarding was.

This showed us that working with and onboarding administrators was also an integral piece of the user growth puzzle for enterprise products.

From these insights about the differences between buyer and admin needs and user level needs, we developed a framework that includes both consumer and enterprise approaches to growth to guide our efforts.

The Four Pillars of Enterprise Growth

In contrast to the common perspective in enterprise, at Box we're finding that consumer growth models and strategies can be applied to accelerate the growth of enterprise products in a repeatable way.

Through our experiments we’ve produced retention gains by adding nurture steps to in-product retention levers, improved activation via onboarding flows, and increased engagement metrics through changes as simple as testing copy on key actions in the product.

But when it comes to applying growth to enterprise, there's one caveat - enterprise products have a unique set of growth levers that consumer products do not.

When blocked, these levers limit an enterprise product's growth potential and diminish the effectiveness of "traditional” consumer growth tactics. When unblocked they serve as boosters that catalyze user growth and adoption.

We’ve bucketed these growth levers into four key pillars that underpin growth for enterprise companies:

  • Business processes
  • Migrations and integrations
  • Employee events
  • Compliance and policies

These four pillars are not new - for years they have been leveraged in one form or another by enterprise practitioners to drive sales for enterprise products. At Box, they have been instrumental in our fast paced growth over the years.

What is new however, is how we’re aligning them to consumer growth strategies to drive user activity. Let’s walk through each of the four pillars in detail below, unpacking how each interplays with consumer growth levers to either limit or supercharge enterprise growth.

1. Business Process

Business process is the heart of operational efficiency, as it determines how work gets done in large, global organizations. It is comprised of a predefined set of steps companies put in place to help employees complete their day to day work. Some examples are - fiscal year planning, new hire offer approval, security protocols, and many others.

As our growth team has been running experiments, we’ve confirmed that our ability to influence user level activity can’t be isolated from these deeply ingrained processes. We saw this interdependent relationship in action when we first tested in-product user onboarding at Box. We created a simple 4-step onboarding to walk users through the how-tos of the product, and saw our activation metrics improve for freemium and SMB users. But they didn’t budge for enterprise users.

Why could that be? Working with our user research team, we ran a simple survey with our enterprise users to understand what they found difficult or easy in their first experience with the product. The survey revealed process as the culprit.

Users wanted to understand why and when they should use Box. They needed to know which of their company’s existing processes it would help them navigate, before jumping into the “how” of using the product.

2. Complex Migrations & Integrations

No product can live on its own island, especially in enterprise. The first time I realized how convoluted most IT landscapes are was over 10 years ago, when I created a roadmap for a new claims product at the insurance company where I was consulting. Working through how it would integrate with the company’s internal data technologies was eye opening.

Large enterprises run on many varied and inflexible technologies, and what most of us consider legacy product can’t be easily retired. Helping customers retire an existing enterprise content management (ECM) system or a network shared drive, and replace it with Box (instead of layering Box on top of current solutions), allows us to boost both sales and user activity.

Due to the complexity of migrations, Box formed a consulting team that engages with customers to guide them through the migration process. Once customers complete the migration of content from other systems to Box, user activity increases as users can get more of their work done within the product.

Similar to migrations, integrations with other software solutions also drive user activity. They improve user experience and smooth business processes across teams, acting as a lever to drive engagement and growth.

For instance, Box has built out integrations with products like Salesforce and Office365 to make it easier for users to manage their work in one place, and ensure that content is centralized across the company.

3. Employee & Company Events

Mergers and acquisitions, policy and regulation changes, and new hire onboarding are all examples of events that can affect if, how, and when an enterprise customer and their employees engage with your product. All of these can trigger a sudden influx of new users or an unexpected exodus of existing users.

To manage these types of events effectively, enterprise growth teams must see them as a lever to drive growth or inhibit churn, depending on the nature of the event.

They can prepare for these events by coordinating the user journey with the buyer and admin journey so that when these events do happen, they’re positioned to take advantage of any growth opportunities or mitigate any potential churn risks.

For instance, enterprise teams need to make sure administrators have access to the right tools and understand the methodologies necessary to navigate any employee events as smoothly as possible.

At Box, our growth team works closely with our customer success team to ensure we hear about, respond to, and leverage such opportunities.

Similarly, we collaborate with the product team that focuses on the administrator experience to ensure we can take advantage of user growth opportunities facilitated by the admin. To reinforce these cross-functional collaborations representatives from both teams are directly embedded into our core growth team.

4. Compliance & Policies

To build solutions to problems in highly regulated industries, such as finance, healthcare, and transportation, companies have to build compliance into their processes from the ground up. If they don’t, they can run into governmental blocks, regulations, and potential fines as they grow.

Companies that operate in highly regulated industries are usually ones of scale, and for them to integrate external software it must meet the necessary regulatory restrictions.

At Box, we’ve found that sometimes customers have older policies that restrict certain subsets of employees from using certain products. This often requires working with the customers to redefine these older policies or adapt our product, which can expose new segments for user acquisition.

For example, many companies have policies dictating how work documents can be shared externally. We’ve found engaging with the customer, especially the IT administrator, to identify, understand, and modify the policies or our product, allows us to find solutions that open the door to user growth and engagement.

It’s Just the Beginning for Growth in Enterprise

Most people in growth overlook enterprise, and most people in enterprise overlook growth. They think growth and enterprise are incompatible, but at Box we’re turning that mindset on its head.

By bringing growth principles inside our organization and having a cross functional team dedicated to figuring out how to adapt the best that growth has to offer to the enterprise landscape, we’re shaping the future of how enterprise products grow.

Bela Stepanova