Thoughts on Growth — April 27, 2018

Thoughts on Growth is Reforge's weekly newsletter of must-know updates and perspectives in growth. By subscribing, you'll join a few thousand PMs, marketers, UX folks, engineers and analysts at today's top tech companies. Check out today's edition below.


1. Add PQLs to your SaaS growth mix

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“When the sales team calls PQLs, customers typically convert at about 25 to 30%”. — Tom Tunguz

KIERAN FLANAGAN VP Growth @ Hubspot:

In B2B SaaS, PQLs (product-qualified leads) will often convert at 5X to 6X that of MQLs (marketing-qualified leads).

PQLs are a combination of product actions (how people are using the product), with whom that person is (using demographic & firmographic data).

THE GOOD

1) They put the focus on product experience. User onboarding needs to be great. You need a knowledge base, help articles and video tutorials for users who get stuck.

2) They rally teams around a single metric; revenue is also a good one.

3) They create demand from people who understand the problems your product solves, as they're actively using it and getting value from it.

THE CAVEAT

They're not a replacement for other lead types, e.g., MQLs. But, for SaaS businesses with the right product and model, they can be a great addition to the demand funnel.


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2. The next growth channels: Airbnb, ZocDoc, Hulu, Amazon, LinkedIn

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tl;dr

As platforms like Amazon, LinkedIn, Airbnb, and even Hulu and ZocDoc achieve massive scale, they enable new growth opportunities in the form of virality or micro-targeted paid marketing.

Look for these signs:

  • high volume
  • high intent
  • (relatively) low cost
  • network density
  • product-channel fit between your product and the channel

AKSHAY RATHOD, formerly Head of Consumer Product & Growth @ Dia & Co:

In observing the birth of microbrands on Amazon and virtual restaurants on Grubhub, I couldn’t help but ask what are other not-so-obvious channels for micro-targeted growth and virality.

A few “new” channels to unlock user growth:

1. ZocDoc: as the de facto digital platform for medical care scheduling, how can health-tech companies and new wave trends like direct primary care harness this channel for lead-gen?

2. Hulu: Hulu and other commercial-based video apps have an increasing volume of active subscribers but extremely poor placements of commercials. As audience targeting improves, how can B2C brands leverage these channels to deliver micro-targeted ads to capture their desired audience segment?

3. Airbnb: As Airbnb becomes a direct substitute for hotels for the millennial generation, how can brands leverage this new hospitality channel to showcase their products? I can imagine a world where direct-to-consumer brands supply Airbnb hosts with free product for their guests in return for a rev-share up-sell model.

4. LinkedIn: Resumes are out; LinkedIn is in. As LinkedIn becomes the digital identity of young professionals, how can B2B services use the newsfeed to build brand awareness and lead gen?


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3. The 4 phases of email marketing evolution (where are you on this?)

  Image from ProfitWell's  Value Metric Benchmarks Report     

Image from ProfitWell's Value Metric Benchmarks Report

 

Can you chart your company against one of these four phases of email marketing evolution?

Phase 0 — We Hate Email

  • We ourselves hate email, so our customers must hate it too (so, let's not send any).

Phase 1 — Mass Promotional Email + Personalized Order Notifications

  • Transactional emails (order notifications and confirmations), and one-off “blasts”
  • Instead, develop additional emails intended to drive habit formation (ex: trending items, item sales, new merchants added, recommended items)

Phase 2 — Moving to Lifecycle Messaging

  • Graduating your successful mass promotional emails into templates for messages that 1) reinforce the habit OR 2) they're paired up with personalized discount emails to drive new use cases.

Phase 3 — Holistic, Personalized Messaging

  • The right content
  • The right time to send it (day of week and time or day)
  • The right amount (how many emails and pushes to send)
  • The right channel (email, push, or both)

CASEY WINTERS, previously Growth @ Pinterest, Grubhub, Greylock Partners:

Every company should end up at phase III at some point. The question is how long it takes to get there.

This varies based on engineering constraints, scale, and how long it takes emails and notifications to flatten off in terms of additional engagement by the previous phases.

Outsourcing this to a marketing technology company is problematic as it requires access to all of your user data, and any migration of data from system to system slows down performance. At a certain scale (like Pinterest), it is not even possible.

If you’re not at Pinterest’s level of sophistication, don’t dismay. Very few companies are. Just start to think about the long term evolution, and when is the right time to push for a step change in email and notification performance vs. continued optimization.


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4. Make your UX research process easy, repeatable

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Setting up UX research is a process and a pain. But, there are a handful of ways to save time + resources and still get actionable results.

ALEXANDRA PROKHOROVA Product Designer @ Algolia:

1) Save time on recruitment

  • set up an incentivized research station at events and meetups
  • invite customers in for “open support” days, bring your UX researcher to recruit alongside
  • research station in a coworking space

2) Test with fewer people

  • 5–7 users (within each user type category)
  • add more as needed, if you can't spot trends

3) Approximate your user

  • If testing for general usability, go for similarity instead of exact-match on your ideal user

4) ABC — Always Be Conducting

5) Tools


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Thoughts on Growth is Reforge's weekly newsletter of must-know updates and perspectives in growth. By subscribing, you'll join a few thousand PMs, marketers, UX folks, engineers and analysts at today's top tech companies. Check out today's edition below.