Love is all you need! #CRO-PlayBook
Putting the product at the heart of a sustainable business growth strategy doesn't come intuitively for most business leaders. They try to deal with growth challenges by pumping more money in sales and marketing, not appreciating that if you win the heart of the customer through an awesome product, their minds and wallets will follow anyway.
Sustainable growth is a challenge faced by every business leader and senior management. As a Chief Revenue Officer, I face this day in and day out.
And then, there are times when sluggish growth stares at us point-blank. The most intuitive way in which most businesses react is by investing more resources in sales and marketing. That invariably bumps-up the customer acquisition costs, drives up the sales costs and even puts a downward pressure on price. Sounds familiar, doesn't it? Well, this approach may work as a short-term hack, but it is really not a good a strategy for sustainable growth.
I concentrated most of my early entrepreneurial career on creating great products and mostly ignored selling them. Naturally, I fell on hard times.
And that taught me the importance of sales.
My last decade was dedicated to the B2B software product and consulting sales (I advised Fortune-100 CXOs on the execution of strategy.) When I look back and reflect on what really drives a company's growth. I have captured my thoughts in CRO Playbook below. This blog post is a part of the series of posts related to the playbook,
I have always felt that "Customer love" is one of the most important drivers of growth and one of the most ignored one.
Keep your customers in love with your product
Love is all you need!
Yes, it sounds bit idealistic and definitely not intuitive.
But there are really two stages of a start-up’s product. The first is to design a perfect experience and, second, to scale that experience. That’s it. But as companies grow in size and revenue, they tend to forget what it takes to create an awesome customer experience and start resting on their past laurels, putting too much faith in the powers of sales and marketing. And when the company's services are no longer aimed at making their customers successful with a great product/experience, even the customers stop loving the company.
This post is dedicated to the first step i.e. designing an experience for your customers that they fall in love with. For, unless you address it, your most aggressive sales strategy will remain futile. (How to design for scale-up is addressed in this blog post.)
At this point, I’m thinking of AirBnB’s product design strategy that they used to get their processes right (to enable customer love). In its early days, even Airbnb founders commuted and visited their limited customer base by going door to door. They asked their customers “What can we do to surprise you? What can we do, not to make this better, but to make you tell everyone about it?” The part of the interview si thinks every start-up and corporate in India must read the interview with the Airbnb founder Brian Chesky as a case study and understand how much thought goes into creating a very simple and intuitive product.
The power of a happy customer
See I am not using the term "Customer like". The customers need to absolutely fall in love with the product.
I believe it’s more important to have fewer customers who LOVE your product than a huge number who just like it. This isn’t intuitive. For B2B space, the organizations often go after scale and forget about what drives it the most. Many massive growth stories have begun with a few fans who absolutely fall in love with the offerings. They await your product releases. They can’t live without you. When a user gets excited about your product, they not only start using it themselves, but they go and talk about it with their friends who intern talk to their friends and the whole chain starts.
This process is most fundamental to the growth. The growth hacks are short term. All marketing techniques and all those things don't really matter much if your underlying product is not performing to the super level.
That reminds me of the story of how much the customers loved Starbucks before its IPO in 1992.
The story (1991) was by Dan Levitan who served as the lead investment banker on the IPO and who later co-founded the venture capital firm Maveron with Starbucks’ CEO Howard Schultz. Dan’s partner from New York called up and invited him to visit this new coffee shop in Seattle. In those days, Folgers and Maxwell House and those branded cans of coffee was a declining business. Although Dan kept struggling to try and understand how this could be a growth business, he anyway landed in Seattle. On his way to the hotel from the airport, Dan asked the cab driver “I hear there’s a lot of coffee in this town. Which coffee shop do you go to?”. The driver replied, “There’re a lot of options but I always go to Starbucks, and it’s the best.” Later after he checked into the hotel, he asked the same question to the lady at the reception counter. “I got to get a coffee tomorrow. Where do you recommend?” and she said, “Oh, there’re lots of places but I always go to Starbucks and here’s the spot."
Aligning sales and marketing with customer love
Continuing with the example of Starbucks, the coffee brand has a distinct marketing strategy that starts right from its products. Their fixation with using quality based product differentiation has resulted in very high popularity and loyalty. And it’s not just the premium quality of their products, but the premium experience which they have designed to elevate the coffee experience to the next level - all to win the customer love leading to organic word-of-mouth marketing. They deliberately avoided investing in traditional forms of marketing. Since the arrival of the digital age, Starbucks has been very active online, extending their sense of community through social media channels.
Through the examples of Starbucks and Airbnb, we can see how creating products that your customers absolutely love can turn referrals into great sales tools and marketing collaterals.
I’ll sum up my thoughts on customer love with this quote from the co-founder of LinkedIn Reid Hoffman.
“The true seed of scale begins with a tiny kernel of die-hard fans.”
Airbnb: Designing Product that Customer Loves
Well, I am again drawing an example from B2C space and that too at the very beginning of Airbnb when they had a handful of customers. I urge you to read the case anyway, there are a lot of learning points for every type of company and of every size. Especially a lesson for how thoughtful Airbnb was in creating awesome customer experience which now extends to millions of customers.
Brian Chesky, co-founder of Airbnb, was asked following Paul Graham (the person behind Y-Combinator which is a start-up incubator, which cultivates and invests in early-stage companies), when they just started off: “Where’s your business?” And Brian said, “What do you mean?” “Where’s your traction?” And he goes “We don’t have a lot of traction.” Paul goes, “People must be using it.” Brian said, “There’are a few people in New York using it.” And Paul said something Brian said he will never forget. Paul said, “So your users are in New York and you’re still in Mountain View.” And he said, “What are you still doing here?”.
And Brain said, “What do you mean?” Paul said, “Go to your users. Get to know them. Get your customers one by one.” And I said, “But that won’t scale. If we’re huge and we have millions of customers we can’t meet every customer.” And he said, “That’s exactly why you should do it now because this is the only time you’ll ever be small enough that you can meet all your customers, get to know them and make something directly for them."
I am just going to quote Brian now on (This is part of his discussion with Reid Hoffman, Linked co-founder):
We literally commuted to New York from Mountain View. So we would be in Y Combinator for Tuesday night dinners and then Wednesday Joe (Gebbia, co-founder of Airbnb) and I would go to New York. We literally would knock on the doors of all of our hosts. We had their addresses and we say, “Knock knock. Hello. Hey, this is Brian, Joe, we’re founders and we just want to meet you. We needed an excuse to get into their home. We’d send a professional photographer to your home and photograph your home. Of course, we didn’t have any money and we couldn’t employ photographers. So Joe and I, we’d show up at their door and they’re like “Wow. This company is pretty small. It’s really hard to get even 10 people to love anything but it’s not hard if you spend a ton of time with them. If I want to make something amazing, I just spend time with you. And I’m like, “Well what if I did this, what if I did this, what if I did this? We’d find out “Hey, I don’t feel comfortable with the guest. I don’t know who they are.” “Well what if we had profiles?” “Great!” “Well what do you want in your profile?” “Well I want a photo.” “Great. What else?” “I want to know where they work, where they went to school.” “OK.” So you add that stuff. And then ...
you literally start designing touchpoint by touchpoint. The creation of the peer review system, customer support, all these things came from us literally—we didn’t just meet our users, we lived with them.
... And I used to joke that when you bought an iPhone Steve Jobs didn’t come sleep on your couch, but I did. I remember we met with a couple hosts. It’s winter. It’s snowing outside and we’re in snow boots. We walk up to the apartment and we went there to photograph the home. And we’re like, “I’ll upload your photos to the website. Do you have any other feedback?” He comes back with a book, it’s a binder and he’s got dozens of pages of notes. He ends up creating a product roadmap for us, we should have this, this, this, this and this, and we’re like, “Oh my god this is our roadmap because he’s the customer.” I think that always stuck in our mind as the roadmap often exists in the minds of the users you’re designing things for.
We’d ask these questions like, “What can we do to surprise you? What can we do, not to make this better, but to make you tell everyone about it?” And that answer is different. If I say, “What can I do to make this better?” They’ll say something small. If I were to say, “Hey, what would it take for me to design something that you would literally tell every single person you’ve ever encountered?” You start to ask these questions and it really helps you think through this problem. It’s essential to seek out and listen to user feedback. But the caveat is: You have to figure out which users to listen to. You’re going to have different kinds of users giving you feedback—and some of it will take you in the wrong direction. So you need to exercise judgment in discerning: Will this particular user and particular feedback lead me to the mass market? Or is it an edge case?
If you want to build something that’s truly viral you have to create a total mindblowing experience that you tell everyone about. We basically took one part of our product and we extrapolated what would a five star experience be. Then we went crazy. So a one, two, or three star experience is you get to your Airbnb and no one’s there. You knock on the door. They don’t open. That’s a one star. Maybe it’s a three star if they don’t open, you have to wait 20 minutes. If they never show up and you’re pissed and you need to get your money back, that’s a one-star experience. You’re never using us again. So a five star experience is you knock on the door, they open the door, they let you in. Great. That’s not a big deal. You’re not going tell every friend about it. You might say, “I used Airbnb. It worked.” So we thought, “What would a six star experience be?” A six star experience: You knock on the door, the host opens. “Hey, I’m Joe. Welcome to my house.” You’re the host in this case. You would show them around. On the table would be a welcome gift. It would be a bottle of wine, maybe some candy. You’d open the fridge. There’s water. You go to the bathroom, there’s toiletries. The whole thing is great. That’s a six star experience. You’d say, “Wow I love this more than a hotel. I’m definitely going to use Airbnb again. It worked. Better than I expected.” What’s a seven-star experience? You knock on the door. Brian Chesky opens. Get in. “Welcome. Here’s my full kitchen. I know you like surfing. There’s a surfboard waiting for you. I’ve booked lessons for you. It’s going to be an amazing experience. By the way here’s my car. You can use my car. And I also want to surprise you. There’s this best restaurant in the city of San Francisco. I got you a table there.” And you’re like, “Whoa. This is way beyond.
So what would a ten-star check-in be? A ten-star check-in would be The Beatles check-in. In 1964. I’d get off the plane and there’d be 5,000 high school kids cheering my name with cars welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindfuck experience. So what would the eleven-sta experience be? I would show up at the airport and you’d be there with Elon Musk and you’re saying, “You’re going to space.” The point of the process is that maybe 9, 10, 11 are not feasible. But if you go through the crazy exercise of keep going, there’s some sweet spot between they showed up and they opened the door and I went to space. That’s the sweet spot. You have to almost design the extreme to come backward. Suddenly, not knowing my preferences and having a surfboard in the house seem not crazy and reasonable? It’s actually kind of crazy logistically, but this is the kind of stuff that creates a great experience.
Further, I actually literally hired a storyboard artist from Pixar. We had him storyboard the perfect Airbnb experience.
When we did that we realized there was this two-hour movie and only 20- minutes were in the home. There was all this leading up to the home, getting the airport, going around, going to dinner, or hanging out with friends out and about. Most of the trip was not in the home. We realized at that point, we need to be the end-to-end business of travel. So the same way that we did things that don’t scale, we called it “magical trips.” We decided let’s find one traveler and create the perfect trip for them.
if you’re not getting some people who say “This is super important to me. I love this. I really need this to work well,” it usually means you’re off track.
Passionate feedback is a clue that your product really matters to someone. And one passionate user can turn into many if you listen to them carefully.
So we put up these flyers anonymously saying, “Seeking a traveler. We’ll photograph your trip to San Francisco if you let us follow you.” This guy Ricardo replied. He was from London. We sent a photographer around him while he was just traveling in San Francisco. What we learned was his trip was awful. He’d show up, he’d go to Alcatraz by himself, put on the headset, and then he’d go to Bubba Gump Shrimp. He’d stay in a budget hotel. He’d go to a hotel bar by himself, sitting with a bunch of dudes at the bar but he doesn’t talk to anyone because he was introverted.
We call him back. We said, “Ricardo, we want to create the perfect trip to San Francisco for you.” We fly him back. We had the team storyboard the perfect experience for Airbnb. We had a driver pick him up at the airport. We took him to the perfect Airbnb, there are all the services. He went on these dinner parties, we got him the best seats at restaurants. We took him on this midnight mystery bike tour. Sixty riders go on it and nobody but the leader knows where it will end up. There was this crazy magical world. I see him at the end of the trip. I say, “How was your trip?” He says, “It was amazing.” And then I walk away. He yells at me. “Brian, one more thing.” He starts crying. He breaks down, he says, “Thank you. This is the best trip I’ve ever had.” I was like, “Oh my God. I guess it worked. It really moved him.” I don’t think anyone ever tried to design an end-to-end experience for somebody like they’re in a movie before and we did it. That became a blueprint. We said we are confident on an unscalable basis that we know how to create a trip that deeply moved somebody that’s better than anything they’ve ever experienced. The question is: Can we develop a technology that scales and do it 100 million times?
Zappos: Customer Love through Excellence in Customer Service
So I looked at various surveys of best examples of customer service. There are a few names that appear in every survey: Zappos, Nordstrom, Southwest Airline etc. I will just quote a short incidence on Zappos here. Zappos.com is an online shoe and clothing shop based in Las Vegas, Nevada. In July 2009, the company announced that Amazon.com would acquire it in an all-stock deal worth about $1.2 billion. Zappos was founded in 1999 by Nick Swinmurn. Swinmurn approached Tony Hsieh and Alfred Lin with the idea of selling shoes online. Tony (co-founded the internet advertising network LinkExchange, which he sold to Microsoft in 1998 for $265 million) and Venture Frog (Tony's investment firm) invested in him and later took over as a CEO. In 2008, Zappos hit $1 billion in annual sales, two years earlier than expected.
I highly recommend you to read Tony's book Delivering Happiness. The book details his experience at Zappos. The example below is a short representative sample of the customer support excellence. While reading about the example I want you to reflect on the organization structure, culture, top management mindset to empower the customer success executives to consistently deliver such quality. It takes a lot of resource commitment, swift decision-making at the lowest possible level, top-management bandwidth and planning (right upto making the right recruitment decisions) to deliver such quality. The employee who goes out of her way needs to feel confident that she will get support from the management and peers.
At Zappos “Deliver WOW Through Service” is the Core Value #1. Here's the annecdonte:
Recently, a newly-married couple was packing up their belongings in preparation for moving. The husband packed his wife’s jewelry inside one of her purses and packed the purse inside what he thought was a spare Zappos box. The wife, it turns out, was intending to return that purse to Zappos using that very box. Which she then does, having no idea that inside the purse now were several thousand dollars of her jewelry!
When the couple arrives at their new home and starts to unpack, bedlam breaks out as the wife figures out what has happened and why her jewelry is missing. The rep she reaches at Zappos decides to reroute the box directly to his desk, but once it arrives, the rep fears for the safety of the valuables if he were to ship them, and purchases a plane ticket to hand-deliver the package himself. When he arrives, the incredibly grateful couple invite him in for dinner. Now they’re customers for life, as you can imagine.
Investing in sales and marketing alone cannot help your business grow. In the longer run, it is the product experience which matters and how your customers love you back for that product. Hammering your customers’ mind with marketing messages and pushy sales approach may not come out as a sustainable growth strategy. Win your customer’s heart and their mind and wallet will follow you.