The Most Powerful Growth Hack Of 2019 “Isn’t Sexy”

This unsexy hack will help you grow 2-3X faster

The Most Powerful Growth Hack Of 2019 “Isn’t Sexy”

 

Every marketer or product manager worth their salt is looking for ways to do more with less.

If you’re anything like me, you’re always hunting for new channels, tactics or experiments to try. You want to create the maximum amount of impact for the minimum amount of effort. That’s the dream, right?

So… when you’re working your tail off, but aren’t getting the results you’d hoped for, of course you want to find an easier way.

You want to work smarter. Not harder.

Well, mon amie (that’s French for “my friend”, ’cause I’m fancy like that)…….

What if I told you that the ultimate growth hack — the hack that fuels many of the world’s most innovative companies — is dead simple to copy.

Yup.

This hack is simple, but apparently “it’s not sexy.”

 

Customer research is the ultimate growth hack

 

According to our friends at ProfitWell, companies that invest in ongoing customer research grow 2–3 times faster.

Did you catch that?

I’ll repeat it again for the people in the back…

 


Companies that invest in ongoing customer research grow 2–3 times faster.

 

What is this magical growth elixir? Customer research — often called “customer development” — is the practice of gaining customer insights to generate, test, and optimize ideas through interviews and structured experiments.

It’s different than “market research.” Customer research isn’t about holding focus groups with random people or gathering demographic data for one-off projects. It’s about talking to your actual customers on an ongoing basis in an effort to understand their needs and discover untapped growth opportunities — not just to sell them stuff.

Many of the world’s fastest growing companies like Netflix, Amazon, Apple, Starbucks, IKEA and Intercom are extremely vocal champions for ongoing customer development.

Nearly every startup accelerator on the planet encourages teams to “build for the customer” and to “get out of the building and talk to customers.”

That sounds great, right? There’s just one problem…

 

 

Customer research matters more than ever — but no one cares

 

It’s never been easier to start a business. There are countless blog posts that teach would-be founders how to start a business with $0 or how to use open source tools to build your SaaS in weeks.

Starting is easy. But growth? Growth is tough.

And it’s only getting tougher.

According to a recent study, it costs 55% more to acquire a new customer today than it did 5 years ago.

That might be because customers have more choice than ever before (10,000 businesses launch every single hour). Or maybe it’s because ad prices are rising almost as fast as customer expectations. *gulp*

According to this recent CXL article“right now, there is a tsunami that’s coming to wipe out thousands of companies.”

We’re rapidly moving towards a business climate where customers wield ALL the power. To survive the storm that’s brewing, it’s no longer good enough to be customer-focused — you’ve gotta be customer-obsessed.

As Patrick Campbell, the CEO of ProfitWell, says, “Customer research matters more than ever. But no one seems to care, which is sad.”

Patrick isn’t just being dramatic. He’s got the evidence to prove it.

ProfitWell surveyed 5,000 software companies — both big (>$100M ARR) and small (<$1M ARR). They found that 7 out of 10 companies were talking to fewer than 10 customers a month in a research capacity.

ProfitWell then asked those same software teams to rank the last product updates they released based on the following criteria:

  • How valuable was the new feature? (ie. would customers actually want to pay for it?)
  • How much did the new feature differentiate their product from their competitors?

This is what 5000 software companies think they’re building…

And this is what their 1.2M customers say they’re really building…

To put that in context…

Thousands of software companies are building the wrong stuff — and 70% of them don’t even know it because they’re not talking to their customers.

 


Thousands of software companies are building the wrong stuff — and 70% of them don’t even know it because they’re not talking to their customers.

 

As Patrick Campbell says, “We’re now in a world where customer research has become so important because the pace of the market is faster than we can keep up, so building the right thing can’t be won by simply guessing and checking your way to success. We see this phenomenon in the actual market data.”

Put another way? the “hit and miss” nature of innovation and growth is no longer sustainable.

 

Why are so many smart teams getting it wrong?

 

This is quite literally the million dollar question. Studies show that over 70% of VC-backed startups die within 18 months of raising $1.3M US.

Why are these businesses failing? According to the founders themselves, its because they built a product with “no market need.”

Let that sink it for a second…

Many of these companies aren’t getting outcompeted. It’s not because of founder breakups or crappy marketing. Most startups fail because they ignore their customers and end up building a product no one needs.

This is an avoidable mistake, right?

If leveraging customer feedback can quite literally be the difference between success and failure, why are so many teams getting it wrong?

I think it’s partially because customer research can be overwhelming.

You can’t just ask customers what they want. A lot of companies have learned that the hard way. Customers often don’t really know what they want. Or they’ll tell you what they want, but then when you build it, they won’t buy it. And that is hella frustrating for product teams.

Hiten Shah, the co-founder of CrazyEgg and KISSmetrics, recently surveyed his email list and asked them what problems they were facing as it related to product management.

Over 100 product people replied and their problems fell into two main categories: managing customer feedback and getting alignment on their team about what to prioritize.

As Hiten says, many teams know they should be talking to more customers to guide innovation and improve their marketing and sales efforts. Yet they’re constantly challenged with who to talk to, what to ask them, how to analyze the feedback, and how to action what they learn.

Does that sounds familiar to you? If so, you’re not alone. Many of the product teams I talk to are struggling with customer research. They know it’s “important,” but getting started feels overwhelming. I designed the Customer Camp workshop specifically to help teams overcome these common hurdles.

So, yes. I do think that overwhelm is part of the problem. But I think there’s actually a bigger problem…

It’s a branding problem.

Many of my favourite marketers and product people are customer evangelists.

Thought leaders like Gary Vee, Neil Patel, Sean Ellis, Amy Porterfield, David Cancel, Eric Sui, Seth Godin, and Louis Grenier all preach about the importance of understanding your customer.

Every single one of them advocates for the importance of doing ongoing qualitative research to guide innovation and accelerate growth.

Yet, when they introduce the topic of qualitative customer research  (a.k.a. talking to customers ),  it often comes with a caveat.

It usually goes something like this…

“It’s not sexy, but the best way to figure out [insert growth objective here] is by talking to your customers.”

 


“It’s not sexy, but the best way to figure out [insert growth objective here] is by talking to your customers.”

 

I keep hearing this over and over. I keep hearing marketers and product people say that “customer research isn’t sexy.”

I’ve heard it on podcasts and on webinars.

I’ve heard it during keynote presentations and read it in blog posts.

If we keep telling our teams or our clients that customer research is important — but that “it’s not sexy” — how can we expect them to get excited about it?

Why would they want to do it?

We talk about customer research the way we talk about flossing…

Everyone knows they *should* be doing it more often, but how many of us really are? (Be honest. I won’t tell your dental hygienist.)

We’re using scare tactics to get people to do it — like dentists do with flossing — but it’s clearly not working.

I think it’s time to change the conversation.

 


Marketers and product teams need to stop apologizing for investing time in customer research.

 

We need to stop making customer research a negotiable line item in our growth strategy, and start treating it like what it really is — the holy cornucopia of awesomeness.

Simply put, if we want more teams to understand the importance of customer research, we need to make customer research sexy.

 

It’s time to make customer research sexy

 

This is an open call to customer evangelists everywhere: we need to rebrand customer research — and quickly.

Luckily, as marketers and product people, we’re the best people for the job.

Did you know what marketers are the geniuses behind minty, foaming toothpaste? True story. Before us marketers came along brushing your teeth was boring. There was no delightful minty reward. It felt like work. Marketers made it a morning ritual.


Do you drink orange juice with your breakfast? You can thank marketers for that one too. Orange juice wasn’t even a thing until Alan Lasker, America’s first “Mad Man”, came along in 1916 and told the world that they should “drink an orange.” Decades later orange juice is still a breakfast stable.

My all time favourite rebranding story? The diamond engagement ring. De Beers hired a marketing firm in 1938 and gave them one objective: figure out how to sell more diamonds.

The marketing team went to work. They did oodles of customer research and ended up developing one of the most successful positioning campaigns of all time. De Beers proudly told the world that “diamonds are forever” and single handedly launched what would become a $72B industry.

Today 83% of engagement rings are diamond engagement rings.

Now we need to do it again…

We need to rebrand customer research

 

It starts by changing the conversation…

More specifically, we need to show people that talking to their customers to better understand their needs isn’t just some boring step in the innovation process. It’s not a chore that product teams must endure in order to get to the good stuff. When done right, it is the good stuff!

We need to start talking about customer research like the sparkling jewel that it really is.

 


We need to start talking about customer research like the sparkling jewel that it really is.

 

We need to stop apologizing for needing to recommend it and start evangelizing it.

Companies that invest in ongoing customer research grow 2–3X faster. The teams that get it and do it right are reaping the rewards.

We all want faster and more sustainable growth, right? That’s why customer research is so damned sexy.

Qualitative customer research could be seen as the diamond engagement ring of growth techniques, but it’s OUR job to make that happen.


 

 

I’m pitching in and doing my part…

 

I created Customer Camp to show teams just how powerful customer research really is.

Customer Camp is a series of hands-on workshops designed to help businesses develop customer-centric strategies. Our unique sprint-style workshops empower teams do a year’s worth of customer research and strategic planning in just a few days.

Customer Camp starts on November 21st, 2018 and is free for eligible Digital Nova Scotia members.

 

 

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