At SaaStr Europa, we learned a 5 step marketing framework from Andrus Purde, Founder at OutFunnel. What category does your startup fit into? And are you utilizing the right marketing mix?
Since you all loved our first SaaStr Europa, we’re bringing it back in 2019. You can get tickets at a super early bird discount rate right now.
Transcript
Andrus Purde, Founder of Outfunnel:
Good morning. I’m slightly confused first because my title is Useful, No BS Framework. This room, I’m not sure whether I can use the word bullshit or should I stick to BS? I think I’ll stick to BS for the time being. I’m here to talk to you about and help you think about marketing. Let’s start with some definitions. The title of this talk, Useful means that I’ve used this framework to drive millions of dollars of AAR in various companies. No BS means that it’s going to be very pragmatic, very commonsensical, maybe even too commonsensical for some of you.
There’s gonna be no fancy words, no vague concept. I’m even gonna go all the way and try to distill marketing down into three spreadsheets. Let’s see how that goes. Then, Framework means that there’s gonna no one size fits all ready-made strategies. It’s gonna be just a couple of thought exercises to help you answer questions like, “Which channel should I focus on or which resources do I need to add to my team? Which skills do I need to add to my team in then next six months or 12 months?”
Before we go into that, I’d like to get a sense of who is in the room. Please raise your hand if you work in marketing or growth marketing. A few of you? Raise your hand if you work in an earlier stage company. If you work in a later stage company. Please, also raise your hand if you think this animal is cute. A few? Please raise your hand if you think this animal is cute enough to maybe want to have it as a pet. A few people in the back? Raise your hand if you know what this animal is. What species is it?
It’s strange. Some people want to have this animal and they don’t know what it is. This sounds like something that could be part of a marketing framework. Let’s see. First, who am I? I’m a T-shaped marketer. These logos are in T-shaped. By T-shaped, I don’t mean the shape of my torso. It is that I know a little bit about every marketing discipline. I think branding to product marketing to pricing to PR, but my specialization is acquisition marketing, so this talk is very much about acquisition. It’s not gonna be about viral tactics or branding. No BS, I promised you.
Then I’ve worked in marketing for 21 years now. I started out in fast moving consumer goods and the media, and for the last 12 years, I’ve been in tech, and for the last 10 years in subscription and SaaS. I spent four years at Skype in various marketing roles and from 2011 to end of last year, I was with Pipedrive and help that scale from zero to now more than 75,000 customers, and then started Outfunnel. There’s two things you should know about Outfunnel.
We building the marketing tool that’s super easy to plug in to a CRM system. If you’re using Pipedrive please check us out. Secondly, we have a hockey stick revenue curve in the sense that for a long time it was zero, and as of this week it’s not anymore. Looks very much like a hockey stick.
The menu for today. For the menu for this morning, I’d like to start by talking about two concepts like category awareness and category urgency and how these two things actually really give you spit you out the channel mix that you should be using or could be using, then we’re gonna go slightly more technical but not too technical. We’re gonna look at the keyword spot analysis and how you can build like a channel opportunity matrix, if you put these things together.
We’re gonna look at also at recommendations and driving word of mouth, which I think is the most powerful channel if you can call it that at all. Then there’s one final spreadsheet if we have time, which relates to execution. All right? The animal I showed you before. The animal actually, it’s called a sugar glider. It’s a flying squirrel. It lives in Australia and that side of the world. I think it’s a helpful metaphor for understanding category awareness.
Had I showed you a picture of a dog, everybody knows what the dog is. Everybody knows how the dog operates and if they want to get one they know where to go and find one. You find a dog marketer, it’s pointers for me to start to talk to people who don’t want a dog about features of a dog. It has four legs, it barks, it sometimes farts on the sofa. It won’t change your mind, but what is for me to seek out people who’re already wanting to get the dog, and then make sure that my dog shop stands out for them, and my puppies somehow are different.
However, if I was selling sugar gliders, like these flying squirrels, nobody is searching for them, so the best way to market them is just find people, interrupt them, show them a picture and say, “Hey, do you want one?” Then some people do. It’s the same with software products. It’s the same with hardware products. There are things like spreadsheets and smartphones, which everybody knows. Then if people want a smartphone or a piece of software, they activate, they start searching, and then they just find whatever suits them.
Things like CRMs and to-do apps, most people in the target audience know what these things are, and they know where to find them, however, if you look at things like new categories like car fleet management software or maybe serverless technology, maybe, 2015, a couple of years ago, or if you think about things like Airtable, which doesn’t really belong to any category, so you have little categories. There’s nobody searching for that thing at the moment, so the marketing is slightly different.
There’s very seldom, like a pure breed guard dog or a pure breed flying squirrel type product. Most companies are somewhere in between, with one side dominating. Hopefully, you’re able to place your brand or your company somewhere on these category awareness chart. If you do that, there’s one more thing to consider, so it’s category urgency.
This is a DVD player. High category awareness. I think most of us know what this is, but I bet that very few people in this room have bought the DVD player recently. Same thing with gym memberships. We know what the gym membership is all year long, but it’s only in the first two weeks of January when we activate and actually activating start signing up for gyms. Category awareness is high all year round. Two weeks, it’s also category urgency.
If you put these two things together, you get a bit of a matrix, where you can have high category urgency, and high category awareness. This is people actively looking for you. People are using some search keywords to try to find you. You can have a high category awareness and low urgency. This is what VC sometimes calls vitamins.
It’s kind of important, but it’s important tomorrow and maybe the day after tomorrow. You don’t take the step to acquire this thing or product. You can also have high category urgency and low awareness, which I think VC term would be painkiller, so people will start to look for it when they have a problem, like you have no control when they start looking for it. Then marketing is very different if there’s a low category awareness and low category urgency.
You can almost draw a line from the top left corner to the bottom right corner, to separate the two kinds of marketing that companies do or could do. I have drawn this line from the top left corner to the bottom right corner. If you’re selling a product which is described as a guard dog, then the aim of marketing is to maximize findability. I think the grammatically correct term is visibility, but I think findability is more active.
Visibility is somewhat useless. Visibility is standing outside somebody’s house naked. Yes, you’re visible but it’s like what’s the point? But findability, it’s very pointed, it’s very interacted. If somebody has a need, they searching for you, and if they start searching for you, they need to be able to find you, so this is what I mean by findability. Then, if you’re selling something more like a sugar glider, like this flying squirrel, then you need to maximize interruptions.
Some marketers call it engagement. You need to maximize engagements to customers. This is BS. This is a No BS talk, so I think it’s interruptions. What we need to do as marketers is we need to stop people in their tracks. We need to show them a picture for flying squirrel, and ask, “Do you want one?” Some people will say yes. You’re with me so far? All right.
Then, if you’ve done these steps, if you’ve thought about your category urgency and category awareness, it’s very easy then to make your first pick of channels. If you’re on the left side, if you have high category awareness and high category urgency, people are searching for you. Then, by definition, the channels which are probably most effective for you are the channels that come up in search, so that search itself, it’s AdWords. It’s content that is highly targeted at high buying intent keywords, which is search engine optimized. It is marketplaces. It is directories. It is direct response media channels.
However, if you’re selling the sugar glider, then the channels that tend to work best are those that target people who’re actively not searching for you, who’re spending time on social media or maybe some new site, so then you need to go social, either free or paid certain types of content, display ads, PR or vital, all these things work and cater best for situations where you have low category awareness and urgency.
No matter which side you’re on, no matter whether you’re a sugar glider or a guard dog, I think the most effective channel, and the most efficient channel is recommendations and referrals. If you ever have good products, that should be part of any marketing playbook. All right. Let’s now assume that we’ve made these steps one and two. We’ve perhaps wanted, like let’s take the example that we want to become more findable. How do you do that? Where do you start? Who do you become findable for? What keyword should be findable for?
There’s an exercise to that. My first spreadsheet which I’ll like to share with you. Let’s take an example where I’m selling a CRM product, and I have only four keywords to choose from. In real-life there’s many keywords to choose from. From the sake of exercise, I’m gonna use four.
We’ll only need to pick one keyword in this exercise. Who here would pick the first keyword. Nobody? Who would be the second keyword, sales coach? A couple of people? Sales by PR management? More hands? Sales by product report? Some people are very selective about the keywords. They wouldn’t pick any of these keywords, which actually may be the right choice because the right answer here is that search volume is not enough to decide what keywords to look for.
This now gets a bit technical. Please, don’t get lost. I’m gonna be back in the normal non-technical talk in about two minutes. You need search volume to decide, but you also need difficult, which is how many other companies, how many other content creators are targeting the same keyword? You can get difficult from many sources. I’m using a mix of on average of Google and Moz, which is an SEO tool.
If you put these things together, if you go to the search volume, and the difficult together, you get kind of an opportunity score. What I recommend to add to that is your personal subjective assessment of relevancy. You want things which are high volume, low competitiveness and high relevance to you. Then, you can see here, that’s why the first keyword, customer relationship management, was 100 times more popular than the second keyword. The opportunity score that they have, the total opportunity score, they’re very close to each other.
The number you get when you make the calculation isn’t your right answer. Just an input to your answer but you can use it as a guide to pick your keywords. This process is called the keyword research in the marketing world, in the SEO world, but I like to call it keyword spot analysis because calling it keyword research makes it sound like it’s like something some SEO person does.
Because I think this should be done and could be done much closer to the marketing leadership, maybe even company relationship because doing this keyword spot analysis really helps you identify your findability, strengths, your opportunities and threats. There’s three good reasons to do keyword spot analysis.
One, you’ll be able to know what keywords to target. Second, you’ll know what language to use on your website, another marketing collateral. Thirdly, you can go one step deeper with this work, and then really get a detailed plan of what channels you need to target and what the resources you need to target these channels. That’s the next step.
By the way, there’s a few links below some of the slides, which I post, which kinda go in more detail about that topic. The slides will be available later to you. Still with me? All right. Next spreadsheet. Let’s assume that one of the keywords which we wanted to target is best CRM, which is a reasonable keyword if you’re targeting a sales product. What comes up in Google? Like you get an ad or maybe a few ads, then there’s a media site. There’s like a semi-media site, which is a bit of media and a bit of kinda play to play site.
Then you have sites like Capitara and G2 Crowd which are kind of directories or marketplaces. Where would you want to be present on that page if you wanted to be findable? The top? Good guess. Some people say the top. Some people say that they want a paid ad because that’s on your direct control, almost. Some people say that anywhere on that page is good. My answer to this question is, if you want to really become findable, you should be present on all these things on that page, every single one of them.
No matter what the people who’re in the target audience search for, and no matter where they click, they should be able to find you. I know what you’re thinking. You can’t be present on all the places because some of them are competitor sites, and then you can’t be. There’s no good, there’s no legal, way to present on your competitor sites, but all the other sites, 70% of them, you can be present.
There’s an exercise, which I’ve done a couple of times, which kind of help you map then how to be present there. The trick is to take your keywords that you’ve selected. It can be one keyword or five keywords or 5,000 keywords depending on your size, and then looking at the results that come up and putting these things into a spreadsheet, a beautiful spreadsheet.
Then, if you do that, in this example we have eight keywords and 10 slots, and when you want to see that, the red ones, about 20 of them are competitors, so these are out of your range. We have 60 slots left. 60 slots where we can be findable. We’re seeing competitor site X, maybe it’s Capitara, featured five times. Altogether, comparison sites are, I think there’s 20 slots of this slide, so by being present on just one site, you can then be findable in almost 10% findable.
If you work with all competitor sites, you then have about 20% or 30% findability. You can also see that about 15 of these the slots are media sites. That, right? If we establish a media function, an outreach function, maybe a PR person or an outreach person, and we also know what sites to target, then we could get another 10 slots covered, so we can increase … You’ll be able to see each function or each site would add to your findability.
Questions? All right. This is a channel opportunity matrix, and then this helps you understand exactly what channels you need to target and what resources you need to target each of these sites. Some sites need money, very simple, some sites need content to be created, some sites need media outreach, some sites need to establish a relationship. At least you know what you need in other to become findable. It’s very easy then to plan out a marketing function and a marketing plan after that.
All right. What have we done? We’ve looked at category awareness and urgency. We’ve made the first peak of channels like broadly where we’re a sugar glider or a guard dog. We’ve done keyword spot analysis, and then we’ve also put it to work in the channel opportunity matrix, which can be a really good matrix to marketing plan. I mentioned earlier that the next channel, if you can call it that, which any company should use, is recommendations.
Recommendations is a separate topic in itself. It’s not really a marketing thing. It’s more a product thing or a service thing, but one of the things marketing can do is it can build the referral program. At Pipe share we build the referral program pretty early on, and about six or 12 months into that, I made a study. I asked people who had used the program, why they had used the program. I was expecting the free months we gave away, yes, part of the program to be a big motivator for people, but actually, we found out that people largely make recommendations, because, A, they really like the product, and B, they just want to help a friend or a colleague.
Then the three months, which I thought was critical for this program, barely registered on this chart. Even knowing that, I still try to incentivize people to make more recommendations, so we try things like, I think, sweepstakes. If you make recommendations this month, you get something extra. Maybe like a book or a sweepstake. I think we did everything from Amazon gift cards to something. Once we even, I think, sweepstaked an iPad, which was not my best day as a marketer.
Some of these things help to drive invites. Some of the things also help to drive signups, but we didn’t really manage to influence new paying customers which we got from this channel, which I think proves that if you’re building a referral program, it makes sense to keep the focus and the main message about the inherent reasons for making recommendation. It’s a social transaction. It’s not a monetary transaction. People who make recommendations, they don’t want the people who receive their recommendations to come across as selfish and they only done it because of a personal gain. Don’t do it, we want to advise.
The second thing I learned is there’s no better time than the first one or two days of being a user of product to ask for recommendations. This graph lists invites sent and successful invite sent from the Pipeshare’s telephone program a couple of years back. As you can see, the first two days really are the best times for asking for recommendations. It kind of makes sense because that’s the time when people are most most engaged with the app. They’re clicking around. They’re starting to fall in love with all the things that they will like in the future, and they haven’t yet found the things which will annoy them in the future.
All right? One spreadsheet to go. Even if you’ve done steps one to five perfectly, you’ll probably end up with more ideas that your team can execute, and then if you have that then just people start doing the things which they like to do, which is kind of good, but hardly optimal. I’ve then found that ICE is something that … It is the third spreadsheet I’ve added to the process which helps team pick their battles, and it gives a shared language in the team. When we talk about, and they talk about a different project.
It’s a very simple spreadsheet. It just lists all ideas you can have. All the ideas you generated in the past five steps, and you assess the impact, like what’s the likely moving needle effect of a project or an idea? You look at confidence. How confident are you that this thing will happen? You look at effort. Of course, the easier something is, the better. Then you have an ICE score for every single idea, and then you pick the thing with the highest ICE score.
The trick here is confidence because it’s relatively easy to assess impact. It’s relatively easy to assess effort, but confidence is where I think millions are made or lost. Nothing should have more than one point in confidence if it’s just an idea. If it has worked elsewhere, it should be maybe two, and not only if somebody has created a prototype or made a small-scale test, a real-life test, should confidence be three or four or five. I’ve found that the more you work on the confidence or that aspect, the more you work on prototype and testing, the more you can trust the results of this exercise, right?
We looked at the six things that help you think about marketing, hopefully. We’ve looked at the three spreadsheets. We’ve looked at the picture of two cute animals. That’s it from me. Thank you.
